Cloud Facts, Analytics and Trends 2017

How Cloudification Makes Enterprises Great Again

Cloud – a Retrospective Look

Just a decade ago, only the largest enterprises could afford cloud solutions. Quoting a famous entrepreneur Marc Andreessen, back in 2000 running a basic internet app in the cloud would cost approximately $150,000!

Cloud could have never truly happened without technological advances, which allowed to lower the cost of cloud services. The massive production of cheap storages, the global spread of the broadband and increased computing powers are the three main pillars of the cloud computing. At the same time, as the technologies advanced, new business requirements emerged, bringing us to the age of big data and cognitive computing. With the enormous amounts of data produced and processed daily, today’s enterprise environment calls for fast decisions and acceleration of business processes. Microsoft, Amazon, Google and IBM – all the largest industry players had to rethink their global strategies to bring us the cloud technologies, as we know them today.

The Answer Lies In the Cloud

Cloud has already transformed the way we think about business, computing, and data. Cloud service is not about moving from your own data center to a cloud server, not anymore. By making the cloud a primary focus of their services, technology giants introduced a variety of faster, cheaper, and more efficient cloud solutions, serving different purposes.

At least 93% of organizations in some way are currently using cloud services. According to the State of the Cloud Report 2017 by Interop ITX, most companies name scalability, higher performance and better or faster access to technology resources among the Top 3 benefits offered by the cloud services. According to the recent Intel’s Cloud Security Report, remaining cloud security concerns are being put down. However, the lack of talents and specialists of a relevant level is a far more significant issue.

According to the Gartner’s 2016 Report, the cloud might become “one of the most disruptive forces of IT spending since early days of the digital age”, with the cloud market seeing an enormous increase of IT expenses to $1 trillion by 2020.

As for 2017, all recent reports predict a continuous exponential growth of the cloud services market for this year, with just the global public cloud market reaching $146 billion in 2017 and $236 billion by 2020, growing at a 22% yearly rate.

Largest Cloud Deals by End of 2016

By bringing many benefits in comparison to traditional IT methods, cloud computing successfully wins both large companies and SMBs from almost all industries, namely those from telecom, healthcare, finance, banking, biotech, and marketing.

The figures speak for themselves: cloud services attract multi-million budgets, with some recent examples following:

• HP has recently entered a 6-year contract with Microsoft for Azure, Dynamics 635, and Office 365 services. According to Jon Flaxman, HP COO, “We have chosen Microsoft Dynamics as our CRM solution for our direct selling, partners, and services. This brings us a cloud-based solution that delivers a more effective and efficient collaboration engine across our business.”
• U.S. Army signed a $62 million contract with IBM last year. Quoting Lt. Gen. Robert Ferrell, U.S. Army CIO, “Cloud computing is a game-changing architecture that provides improved performance with high efficiency, all in a secure environment.”
• Evernote, a popular productivity app with 200+ millions customers, has recently completed the migration of a terrific 5+ Petabytes of data and its entire infrastructure to Google Cloud Platform, quoting “Rather than pouring resources into the day-to-day maintenance of equipment and software… we can now focus more of our time and energy into responding to customer needs”. The migration resulted in “increased uptime, security improvements, and faster delivery of new and innovative features”.
• The latest breaking news was Snap signing a huge $2 billion contract for 5 years with Google and another $1 billion contract with Amazon as a backup of their business operations.

While large companies can afford to invest multi-million budgets in the cloud, affordability has become a really important driving factor, allowing the cloud giants to attract even the smallest companies. Today, the cloud is an efficient and cost-effective way for the startups to quickly setup all required infrastructure without the need to invest huge efforts and costs.

Largest Cloud Providers 2016-2017

Today, the cloud market is more or less evenly split among the four largest cloud providers, running almost head-to-head and each having unique offerings and multiple Fortune500 companies among their clients.

• Amazon AWS Platform, a current IaaS leader, has seen an almost 50% increase of AWS revenue over 2016, totaling to $13 billion. Being the first to offer public cloud services over a decade ago, Amazon currently dominates the market and continues to add multiple services to its offerings at an increasing rate.
• Microsoft Azure Cloud Platform. Having announced the global strategy shift back in 2014, in just two years Microsoft paved its way to becoming one of the leading cloud providers. In 2016, Microsoft has doubled its Azure revenue with an almost 93% year-over-year growth. Microsoft is already dominating in SaaS cloud offerings for the global enterprise market, by providing a smooth workflow with Office 365, Dynamics 365 (an ERP and CRM bundle) and other products. Microsoft is also rapidly growing in the IaaS and PaaS segments, having a tough competition with other cloud service providers.
• IBM Cloud closes the lead with their private hybrid cloud model and cloud revenue up by 35%, reaching $13.7 billion. IBM shows a different approach, as they strive to fuse cloud with AI. Watson, IBM’s powerful AI running in the cloud, is envisioned as their ultimate solution for ubiquitous cognitive computing, soon to be present everywhere in our daily lives.
• Google Cloud Platform, despite being more appealing for SMBs, follows the rival platforms closely. Alphabet does not disclose their revenue numbers as openly, showing Cloud under “other revenues” segment along with hardware, Google Play, and other services. However, the most recent news are very optimistic for Google Cloud. The recent deal with Snap allowed Google to win its largest client so far.

Despite being overshadowed by the Top 4 giants, companies such as VMware, Oracle, Salesforce and others, grow stronger in the cloud domains as well at the expense of the smaller providers.

As businesses successfully adopt cloud for their needs, new innovative solutions emerge, powered by the cloud computing. Serverless Computing (FaaS), Blockchain, Artificial Intelligence and IoT will be setting IT Industry trends in 2017 and beyond. The cloud market is booming today and it’s only the beginning.

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