Story image

Cloud infrastructure services market booming; AWS leads way

09 May 16

A ‘dramatic’ shift in data center expenditure from on-premises to service provider deployments shows no immediate signs of slowing, but it's having a major impact on the IT industry including the channel.

Canalys estimates worldwide expenditure on cloud infrastructure services – which includes IaaS and PaaS delivered as part of hosted private and public clouds – was up 53%, to US$8.2 billion, in the first quarter of 2016, with total spend forecast to exceed US$38 billion by year end.

By 2020 the cloud infrastructure services market is expected to reach US$190 billion.

Matthew Ball, Canalys principal analyst, says the push by Amazon, Microsoft, Google and IBM Softlayer to offer data center capacity to businesses is having a major impact on the IT industry.

“Over 50% of servers in 2016 will be shipped to data centers providing cloud infrastructure services,” Canalys says.

However, Canalys says there are typically low-margin and increasingly white box deals, which is affecting vendors and channel partners that sell compute and storage.

“These data centers are scaling rapidly and operated by an increasingly consolidated number of providers,’ Ball says.

“The top four providers accounted for nearly 60% of the total market in Q1, up from just over 45% two years ago, with Amazon leading the way with 30%.

“This move is supported by virtually every software company prioritising the development of their offerings for the cloud.”

Canalys says challenges remain with the massive capital required to sustain cloud data centers expected to cause many providers to leave the market, leading to rapid consolidation.

“These investments are possible in an environment when capital is plentiful, and interest rates are incredibly low, but this will not always be the case,” warns Canalys.

“A significant chunk of cloud use is driven by loss-making, venture-backed Silicon Valley start-ups, whose future looks questionable as investors become more cautious. And the ongoing uncertainty as to whether data in the cloud can be kept hidden from the US and other government agencies will keep many enterprises wary of storing data in the public cloud.”

Google says ‘circular economy’ needed for data centres
Google's Sustainability Officer believes major changes are critical in data centres to emulate the cyclical life of nature.
How to keep network infrastructure secure and available
Two OVH executives have weighed in on how network infrastructure and the challenges in that space will be evolving in the coming year.
52mil users affected by Google+’s second data breach
Google+ APIs will be shut down within the next 90 days, and the consumer platform will be disabled in April 2019 instead of August 2019 as originally planned.
How Fujitsu aims to tackle digitalisation and the data that comes with it
Fujitsu CELSIUS workstations aim to be the ideal platform for accelerating innovation and data-rich design.
QNAP launches a new hybrid structure NAS
"By combining AMD Ryzen processors with a hybrid storage structure and 10GbE SFP+ connectivity, the system packs performance into a compact 1U frame."
Ramping up security with next-gen firewalls
The classic firewall lacked the ability to distinguish between different kinds of web traffic.
Platform9 aims to allow enterprises to run Kubernetes instantly
Snapfish, HPE, and Juniper use Platform9’s hybrid cloud solution to deliver a modern cloud infrastructure-as-a-service experience.
Opinion: A data centre manager's Christmas wish list
In this time of merriment and cheer there is one thing everyone is not-so-secretly waiting for: Presents.