As Frank Sinatra once crooned, it was a very good year. While he definitely wasn’t talking about cloud computing, 2017 was a year the cloud really became a standard way of computing — and it was a very good year.
It took long enough. As someone who has been watching this space for a decade, in the early days there was a lot of resistance from hardened old school IT pros, who weren’t about to trust their valuable data with some random vendor. When these random vendors turned to be some of the biggest tech companies in the world, that story changed.
From that point forward, it wasn’t so much a matter of trust (another song), but getting your data and applications to the cloud. Some companies like GE decided to rip off the band-aid and close most of their data centers, while moving much of their software to the cloud. But it wasn’t just a couple of companies, it was the beginning of a significant shift in the way companies run their businesses.
That led to numbers like Microsoft hitting a $20 billion run rate across all its cloud properties including Office 365 and Azure with the majority of that revenue coming its SaaS properties. Consider that just a few years ago, Microsoft was just dabbling in the cloud. Now it’s a major part of its business.
It was a year we saw Salesforce hit $10 billion in revenue, and set its sights on $20 billion. They were the fastest software ever to reach $10 billion, a goal that many thought was unattainable when Chairman and CEO Marc Benioff set it several years ago, but there was steady quarter-to-quarter rise and its most recent quarter, it announced $2.68 billion. They want to get to $20 billion by 2021. That’s just four years from now.
Meanwhile AWS held steady as the cloud infrastructure leader with a run rate over $18 billion in revenue and a vast marketshare advantage over its rivals. Google was well back in the pack, but growing at a rate of over 70 percent. We saw Alibaba making a number of agreements with western companies to grow its market outside of China.
Can they keep it going
With so much action and so much growth, it’s reasonable to ask if the segment can keep it going in 2018. If you consider that the cloud took so long to take off, and finally reached a kind of tipping point in 2017, chances are that the trend will continue in 2018.
For all of the gaudy revenue numbers we are seeing, there is still a ton of room for the market to grow even more for several years. We may see some sorting out and some combining, but the market itself should continue to grow for some time.
And that means good times should continue for cloud computing in 2018.
Photo: Bart Everson on Flickr. Used under CC by 2.0 license.
