Snowflake turned in second-quarter results, and it was good news for the company and the cloud computing industry in general.
Snowflake is a cloud computing company focused on helping other companies break down data silos, gain better insights from their data, and maximize its overall value. The company just posted its second-quarter results, reporting 83% year-over-year product revenue growth.
In addition to revenue growth, Snowflake posted 171% net revenue retention, owing to significant expansion of services offered to existing customers. The company also has 246 customers accounting for more than $1 million in product revenue.
“Sustained 80%+ product revenue growth in a quarter when the broader demand environment for software softened likely boosts investor confidence that Snowflake’s cloud data platform is viewed as a strategic (and durable) area of investment by enterprise customers,” Morgan Stanley analyst Keith Weiss wrote in a note to clients, according to Seeking Alpha. Morgan Stanley currently has an overweight rating on Snowflake’s stock.
According to Seeking Alpha, much of the cloud industry saw gains following Snowflake’s report. Competitors Datadog and MongoDB saw healthy gains following their own results, while Amazon, Google, Microsoft, and Oracle all saw gains as well. Salesforce was the outlier, falling 5.5%.
As organizations continue to migrate to the cloud, clearly understanding usage and costs is proving to be a significant challenge.
Unlike on-premise infrastructure, most cloud providers use a pay-as-you-go model, allowing for a low barrier-to-entry and easy scalability. Unfortunately, that model can also lead to significant challenges accurately predicting how much cloud computing will ultimately cost.
According to Anodot’s State of Cloud Cost Report, almost 50% of IT executives say it’s proving difficult to control cloud costs, while respondents say that gaining visibility and understanding both usage and costs is a top challenge. Similarly, 88% cite optimization and reduced spending on existing cloud deployments as extremely or very important.
Interestingly, despite these concerns, 60% of those polled plan to migrate more workloads to the cloud in the coming year.
Anadot highlights the importance of organizations carefully tracking their cloud usage to better understand their needs and associated costs:
Unless costs are managed carefully, it’s quite easy to lose track of what’s being used—especially for organizations with large development teams that move quickly and tend to try new things. Misconfigurations, over-provisioning, and forgotten resources that have been provisioned but abandoned are the bane of cost management for DevOps teams. Unfortunately, for many organizations, the surprise costs only show up when the monthly invoice arrives.
Understanding cloud cost visibility is not a new challenge. In fact, AWS recently took steps to lower customers’ bills following years of complaints and a reputation for surprise bills, artificially high fees, and hidden costs.
With 60% of organizations planning to increase their cloud deployments, cost visibility is something that will need to be addressed sooner rather than later.
ServiceNow CEO Bill McDermott has called cloud computing the “pervasive computing theme of the 21st century.”
The cloud computing market is experiencing major growth, due in no small part to the pandemic and the rise of hybrid work. All three of the top providers are experiencing major growth, with no signs of it slowing down. According to McDermott, cloud computing’s success is because of its “pervasive” and transformative nature.
“It simplifies everything. Everything’s on the mobile. Everything’s beautiful and easy to use,” McDermott told Yahoo Finance.
“It’s one platform that can single thread business across an entire enterprise, all functions of the business. So, it is a great unifier in a sense, because some people have very powerful Chief Information Officers, others have Chief Digital Officers, others have Chief People officers, others have these wonderful data managers,” McDermott added. “But to have one platform, that single thread, all of those powerful relationships to deliver great experiences is super exciting to us.”
While the economic downturn has many companies hedging their bets and cutting costs, McDermott believes the cloud computing market can continue growing, buoyed by companies’ digital first strategies.
“Ninety-five percent of CEOs have a digital first strategy. So, they’re leaning in to digital transformation. Because it’s the only way out. On one hand, it’s software as the great deflationary force,” McDermott said. “On another hand, if you can’t transform and recreate your business model, and innovate digitally, you lose the game. So, CEOs are very well aware of this. So, that tailwind is super strong.”
McDermott’s predictions are good news for the cloud market and underscore the opportunities available to cloud providers.
Supply chain issues may be negatively impacting Microsoft’s Azure cloud service, constraining the supply of available server resources.
Customers are reportedly having issues with the number two cloud provider, including an inability to subscribe to new services. The Information ran a piece claiming Microsoft is running out of server capacity, and The Register says the problem may lie in the broader supply chain issues that have plagued the computer industry since the beginning of the pandemic.
According to the reports, even if customers in UK South and UK West can sign up for subscriptions, they cannot deploy compute solutions. Capacity in Washington State appears to be impacted as well.
One likely explanation is the effort Microsoft is exerting to help the Ukrainian government, with the company moving its IT operations to the cloud and helping to combat Russian cyberattacks.
These various factors, in combination with general supply chain constraints, are pushing Azure’s capacity to the limit.
Microsoft told The Register it was experiencing “unprecedented” demand, adding that it would use capacity restrictions as needed to cope with the issue.
“With this surge, coupled with macro trends impacting the whole industry, we’ve taken steps to address customer increases in capacity while also expediting server deployment in our datacenters. Our priority remains ensuring business continuity for customers. In addition to managing and planning for growth, we actively load balance as needed.
“If it does become necessary to put capacity restrictions in place, we will first restrict trials and internal workloads to prioritize growth of existing customers,” a Microsoft spokesperson said in a statement.
Interestingly, at least some customers say these constraints are nothing new and have been a long-term problem for the cloud provider. One thing is certain: If Microsoft wants to build on the momentum it currently has, and continue to gain ground on AWS, it will need to address its capacity issues one way or another.
The latest report from CloudBees is bad news for the cloud industry, with many companies still not fully securing their supply chain.
Supply chain attacks have become increasingly common, with hackers viewing them as a high-reward attack vector. Rather than trying to compromise individual targets, a single, successful attack against a vendor whose software or APIs are used by thousands of companies can yield far greater results.
Unfortunately, many companies have yet to fully secure their supply chain, according to CloudBees. Of the C-suite executives surveyed, 93% believed they were well-prepared for an attack. A deeper dive, however, showed a different story.
A whopping 45% of execs say they are only halfway through the process of securing their supply chain, with only 23% nearly done. Even worse, a disturbing 64% say they don’t know who they would turn to first in the wake of an attack.
“We discovered that as software becomes the primary source of customer experience and value, supply chain security is getting the attention it deserves and at the proper levels in the organization,” writes Prakash Sethuraman, Chief Information Security Officer, CloudBees. “However, this study reveals gaps that indicate supply chain security is not well understood, nor are systems as robust or comprehensive as they should be.
“Bottom line, the results reinforce the concept that software supply chain security needs to go beyond “shift left” to “shift security everywhere” — with automation. The software you are developing must be as secure as possible, but it doesn’t stop there. The delivery process itself must be protected, and you have to be able to detect and instantly mitigate problems in production to consider your software supply chain as secure.”
Microsoft has partnered Next Pathway to help companies speed up their migration from legacy data warehouses to Microsoft Azure.
Cloud adoption is progressing faster than ever, but many companies are still stuck on legacy data warehouses, struggling to find the best way to migrate their data. Microsoft and Next Pathway have partnered to use the latter’s software to help companies make the transition.
Next Pathway has developed a suite of tools that companies can use to analyze their current data and workloads, as well as translate, test, and migrate complex workloads, including SQL, ETL pipelines/workflows, Stored Procedures, and other code types. The company’s technology can also translate legacy ETL pipelines to Azure Data Factory (ADF).
“We are pleased to partner with Next Pathway and provide our customers with a faster and more efficient migration path to Microsoft Azure,” said Zia Mansoor, Worldwide Vice President Data and AI.
“At Next Pathway we are continuously innovating to make it easier, and faster for our customers to migrate to the cloud. We are extremely excited to be working with Microsoft”, said Chetan Mathur, Chief Executive Officer at Next Pathway.
Microsoft and Oracle are partnering to integrate their cloud platforms, providing customers with a powerful multicloud option.
Oracle and Microsoft have announced Oracle Database Service for Microsoft Azure, a way for Azure customers to easily access Oracle Database services in Oracle Cloud Infrastructure (OCI). The new service builds on a partnership dating back to 2019.
“Microsoft and Oracle have a long history of working together to support the needs of our joint customers, and this partnership is an example of how we offer customer choice and flexibility as they digitally transform with cloud technology. Oracle’s decision to select Microsoft as its preferred partner deepens the relationship between our two companies and provides customers with the assurance of working with two industry leaders,” said Corey Sanders, corporate vice president, Microsoft Cloud for Industry and Global Expansion.
The service will allow customers to connect their Azure subscription to OCI. The service will automatically configure everything necessary to integrate the two platforms, providing a familiar Oracle Database Services dashboard combined with Azure terminology and the benefit of Azure Application Insights monitoring.
“There’s a well-known myth that you can’t run real applications across two clouds. We can now dispel that myth as we give Oracle and Microsoft customers the ability to easily test and demonstrate the value of combining Oracle databases with Azure applications. There is no need for deep skills on either of our platforms or complex configurations—anyone can use the Azure Portal to harness the power of our two clouds together,” said Clay Magouyrk, executive vice president, Oracle Cloud Infrastructure.
The partnership between Microsoft and Oracle should help both companies leverage their respective benefits in their quest to gain more of the cloud market.
Microsoft is upping its efforts to target government and public sector clients and help them transition to the cloud.
Microsoft has been rolling out customized versions of its cloud platform in an effort to target specific markets. One such example is Azure Space, which the company launched in late 2020. Microsoft has now announced Microsoft Cloud for Sovereignty.
“Governments are obligated to meet specific requirements for varying data classifications including data governance, security controls, privacy of citizens, data residency, sovereign protections and compliant operations following legal regulations like the GDPR (General Data Protection Regulation),” writes Corey Sanders, Corporate Vice President, Microsoft Cloud for Industry and Global Expansion Team. “The Microsoft Cloud for Sovereignty — offering governance, security, transparency and sovereign technology — combined with strategic partners can support the digital transformation of government customers unlike any other cloud provider in the world.”
Government cloud contracts have become increasingly important to Microsoft as the company works to catch up with market leader AWS. The company acquired Impact Level 6 Pentagon certification in late 2019, giving it the ability to bid on classified contracts.
Microsoft and AWS have continued to compete with each other for lucrative government contracts, and Microsoft clearly wants to gain an advantage.
“Microsoft Cloud for Sovereignty is being built on the Microsoft public cloud to accelerate digital transformation while creating a customized experience adhering to government requirements,” Sanders adds. “Government customers will have the power of the public cloud, addressing low cost, agility and scale expectations, with the full breadth of capabilities like modern developer services, agile infrastructure, secure DevOps, open-source platforms, modern collaboration and low-code development. Additionally, Microsoft Cloud for Sovereignty customers will continue benefiting from Microsoft’s global security signals, analyzing over 24 trillion signals every day to identify and help protect against local attacks.”
The company has already been working with governments around the world to help build solutions that meet their needs.
“Institutions and critical national infrastructures need the modeling, building and management of resilient-by-design Secure National Clouds able to guarantee data integrity, availability and protection in line with country-systems guidelines,” said Gennaro Faella, Senior Vice President Innovation, Leonardo. “Thanks to our extended research and innovation capabilities we can leverage the best from Microsoft Cloud with our capabilities in the cyberspace and in protecting national assets. Our long-term collaboration comes together in a solution that helps ensure the sovereignty of data while at the same time benefiting from the innovation of the public cloud.”
Microsoft is clearly pulling out all the stops in its efforts to grow its cloud platform.
The UK is experiencing record heat, and it’s taking a toll on cloud servers and the websites they power.
According to The Register, the UK is experiencing a heat wave that has topped 104.5F. The country doesn’t usually see that kind of heat and is ill-equipped to deal with it. Google and Oracle’s data centers are taking a hit, with some machines being powered down to avoid permanent damage.
“There has been a cooling related failure in one of our buildings that hosts zone europe-west2-a for region europe-west2,” Google wrote in an advisory. “This caused a partial failure of capacity in that zone, leading to VM terminations and a loss of machines for a small set of our customers. We’re working hard to get the cooling back on-line and create capacity in that zone. We do not anticipate further impact in zone europe-west2-a and currently running VMs should not be impacted. A small percentage of replicated Persistent Disk devices are running in single redundant mode.
“In order to prevent damage to machines and an extended outage, we have powered down part of the zone and are limiting GCE preemptible launches. We are working to restore redundancy for any remaining impacted replicated Persistent Disk devices.”
Similarly, Oracle issued a statement of its own, blaming “unseasonal temperatures.”
“As a result of unseasonal temperatures in the region, a subset of cooling infrastructure within the UK South (London) Data Centre has experienced an issue,” the company wrote. “The relevant service teams have been engaged and are working to restore the affected infrastructure back to a healthy state. Our engineers expect redundancy to the impacted cooling infrastructure to be restored within the next 1-2 hours, after which services will begin to be recovered.”
Oracle later updated its statement to reflect an improvement in the situation.
“We’re continuing repair work on cooling systems in the UK South (London) datacenter to further reduce operating temperatures and mitigate service impact. Datacenter temperatures have reached workable levels and service team engineers are now able to begin working to restore the impacted services. Impacted services are monitoring the recovery process as affected service infrastructure is restored to an operational state.”
Given the effects of climate change, cloud providers will need to start planning for “unseasonal temperatures” and freak weather events if they plan to remain operational.
Microsoft has received permission to provide cloud services in Kuwait, a big win for the company as it continues to expand its cloud business.
According to Zawya, Microsoft received permission to deliver Azure, Azure Stack Hyperconverged Infrastructure, and Office 365 to businesses and organizations in Kuwait. The company received approval from the Communication and Information Technology Regulatory Authority (CITRA).
“In order to realize our digital ambitions and support the New Kuwait Vision 2035, it is crucial for government entities and private enterprises to adopt robust, secure cloud-based products and services to drive innovation. We have recognized the effort that Microsoft has made towards delivering these solutions, and we are confident that these and other technologies will unlock unprecedented opportunities for a cloud-first Kuwait,” said Eng. Salim Muthib Al-Ozainah, Chairman and CEO of CITRA.
Microsoft welcomed the news, emphasizing that CITRA’s endorsement added a trust factor to its operations in the country.
“Digital transformation plays a major role in moving the country of Kuwait forward, but this journey goes beyond just the technology – trust plays a major factor in the equation as well,” Alaeddine Karim, Microsoft Kuwait GM, said. “The permission granted to us by CITRA reinforces Microsoft’s position as a trusted technology provider and demonstrates our commitment to empowering organizations to innovate securely and accelerate digital transformation across the country.”
According to a new report, cloud shared infrastructure spending in 2022 is poised to surpass spending for non-cloud IT infrastructure for the first time ever.
Companies have been racing to embrace cloud computing, with the pandemic and remote work being a major accelerator. The top three providers have seen massive growth, but spending in the general market has continued at an impressive pace. According to IDC, shared cloud infrastructure spending will surpass non-cloud spending for the first time ever in 2022.
“Spending on shared cloud infrastructure reached $12.5 billion in the quarter, increasing 15.7% compared to a year ago,” the company writes. “IDC expects to see continuously strong demand for shared cloud infrastructure with spending expected to surpass non-cloud infrastructure spending in 2022 for the first time. Spending on dedicated cloud infrastructure increased 20.5% year over year in 1Q22 to $5.9 billion. Of the total dedicated cloud infrastructure, 47.8% was deployed on customer premises.”
As we covered yesterday, a report from Synergy Research Group shows that the top three providers — AWS, Microsoft Azure, and Google Cloud — accounted for 65% of what was spent on cloud computing in general in the first quarter of 2022. IDC’s report is further good news for the Big Three, as Synergy concluded they would continue to dominate the market for the foreseeable future.
According to new research, the top three cloud providers are extending their lead in the market, accounting for 65% of total cloud spending.
AWS is currently the market leader, although Microsoft Azure has been making significant gains, and Google Cloud has been establishing itself as a multi-cloud provider. While the overall market continues to grow at a whopping 34%, these three providers account for 71% of the cloud market share, according to Synergy Research Group.
As the cloud market has grown, the top three providers’ share of cloud market spending has grown as well. In the first quarter of 2022, global cloud spending was $52.7 billion, with the top three raking in 65% of that. In contrast, several years ago, the top three accounted for 52% of global cloud spending, demonstrating their growing dominance in the market.
According to Synergy, smaller companies will need to differentiate themselves by targeting niche markets in order to remain competitive.
“While the level of competition remains high, the huge and rapidly growing cloud market continues to coalesce around Amazon, Microsoft and Google,” said John Dinsdale, a Chief Analyst at Synergy Research Group. “Aside from the Chinese market, which remains totally dominated by local Chinese companies, other cloud providers simply cannot match the scale and geographic reach of the big three market leaders. As Amazon, Microsoft and Google continue to grow at 35-50% per year, other non-Chinese cloud providers are typically growing in the 10-20% range. That can still be an attractive proposition for those smaller providers, as long as they focus on regional or service niches where they can differentiate themselves from the big three.”
Oracle has beat its larger rivals to a significant milestone, becoming the first major cloud provider to open a cloud region in Mexico.
Cloud providers open data centers in various regions in an effort to improve the speeds and availability of their services to customers in those areas. Despite being in eighth place in the cloud market and well behind AWS, Azure, and Google Cloud, Oracle has managed to open a Mexico data region first in the state of Querétaro.
“We are excited to establish a cloud region in Mexico that will offer public and private organizations, as well as partners and developers, the opportunity to leverage OCI to grow their businesses,” said Maribel Dos Santos, senior vice president and general manager, Oracle Mexico. “The Oracle Cloud Querétaro region offers organizations a wide range of services, including access to emerging technologies, to help improve the customer experience and positively impact the country’s ecosystem of innovation.”
Oracle also took the opportunity to reaffirm its commitment to transitioning to renewable energy. The company plans to power all of its data centers with renewable energy by 2025, including the new Querétaro location.
AWS CEO Adam Selipsky is bullish on the cloud computing transition, telling CNBC’s Jim Cramer that “most of it’s still yet to come.”
Selipsky succeeded Andy Jassy as AWS CEO when the latter replaced Jeff Bezos as CEO of parent company Amazon. AWS is currently the market leader in cloud computing, but Selipsky believes there is still plenty of room for growth in the market.
“It’s possible that AWS could become the largest business at Amazon. Now, Amazon has other large and great businesses, and so it could take a while for us to get there,” Selipsky said in an interview on CNBC’s “Mad Money.”
“Essentially, IT is going to move to the cloud. And it’s going to take a while. You’ve seen maybe only, call it 10% of IT today move. So it’s still day 1. It’s still early. … Most of it’s still yet to come,” he added.
Selipsky’s comments echo those of his boss when he was still CEO of AWS.
“It’s still really early days,” said Andy Jassy, speaking about the cloud in 2019. “Sometimes we remind ourselves that even though it’s a $30 billion revenue run rate business growing 45 percent year-over-year, it’s the early stages of enterprise and public sector adoption in the US. Outside the US they’re 12 to 36 months behind depending on the country and industry.”
Amazon recently turned in its first quarterly loss since 2015. Meanwhile, AWS was a bright spot for the company, continuing to grow 36.5% year-over-year. Like many cloud providers, AWS greatly benefited from the pandemic-fueled drive to transition to the cloud.
If Selipsky is right, AWS’ best days are yet to come.
Forrester Research has named Google Cloud a leader in Document Analytics space, providing a prestigious boost to the cloud provider.
Google is currently the number three cloud provider in the world. CEO Thomas Kurian has made no secret of his desire to move into the number two spot in the next few years. As part of the expansion of its services and abilities, the company rolled out Document AI in late 2020.
According to Sudheera Vanguri, Document AI Head of Product, Forrester has named Google Cloud a leader in two of its recent reports: The Forrester Wave™: Document-Oriented Text Analytics Platforms, Q2 2022 and The Forrester Wave™: People-Oriented Text Analytics Platforms, Q2 2022 authored by Boris Evelson.
“Google Cloud’s strengths include document capture, image analytics, full ModelOps cycle capabilities, unstructured data security, and integration with Google Cloud’s augmented BI platform Looker,” Forrester says in The Forrester Wave™: Document-Oriented Text Analytics Platforms, Q2 2022 report.
Vanguri credits Google Cloud’s success to its close relationship with Google Research, which allows the company to “quickly to integrate bleeding edge technologies into our solutions.”
Forrester is one of the most well-respected names in business research. Naming Google Cloud a leader in the Document Analytics business is sure to boost Google cloud and Kurian’s ambitions.
Multiple reports are showing that Microsoft Azure is increasingly becoming a major threat to AWS in the cloud space.
AWS is the current market leader among public cloud providers, with Microsoft Azure in second place and Google Cloud in third. Despite AWS’s lead, according to the Flexera 2022 State of the Cloud Report, Azure usage has surpassed AWS in several instances, representing the first time this has happened in 11 years of Flexera’s reporting:
As in previous years, AWS, Azure and Google Cloud Platform are the top three public cloud providers. But for the first time, Azure has closed the gap with AWS, while other cloud providers have not shown much growth. For each public cloud provider, respondents specified whether they’re running significant workloads in that cloud, running some workloads, experimenting, plan to use it or had no plans to use it.
Interestingly, Azure took the lead in overall breadth of adoption among organizations:
Azure passed AWS for breadth of adoption among enterprises. Google Cloud Platform has the highest percentage for experimentation (23 percent) and Oracle Cloud Infrastructure has the highest percentage of plan to use (twelve percent), which could drive more adoption in future years.
Azure also scored a win among “enterprises running some or significant workloads on the platforms.” While Azure tied with AWS at 47% of organizations using it for significant workloads, it surpassed AWS among organizations using it for some workloads, at 33% vs 30%.
Of the top six cloud providers, Azure was the only one that saw its adoption rate increase year-over-year, coming in at 80% in 2022 vs 76% in 2021. In contrast, AWS adoption rates dropped in 2022 to 77%, down from 79% in 2021. Similarly, Google dropped from 49% to 48% and Oracle dropped from 32% to 27%. IBM Cloud’s adoption rate stayed steady at 25%, while Alibaba dropped from 13% to 11%.
While Flexera’s report is telling enough, it’s supported by a new report from Credit Suisse. According to Investing.com, Credit Suisse analysts outlined how “Azure has grown meaningfully faster than AWS” and, as companies transition to the cloud, “the full multi-year impact of Azure’s growth opportunity is still not properly reflected in consensus estimates.”
Overall, the two reports are excellent news for Microsoft and dovetail with previous reports demonstrating the growth potential of Azure.
Amazon Web Services (AWS) appears prepped for a major overhaul of its service if a job posting is any indication.
AWS is already the leading cloud provider in the world, but Microsoft and Google have been making major headway in recent years. AWS appears to be on the verge of something big, posting a job opening for a “Manager, Software Development, New Initiative.”
The description of the role is what’s of particular note:
AWS is looking for a software development manager to own a green-field network software project. We are launching an effort this year to completely re-imagine how the AWS network is managed. A key part of this project is building a suite of control plane services from the ground-up, which the network fabric teams will use to scale and manage the networks that they are ultimately responsible for. This role will own product definition, development, testing, and ultimately operation of these services, which are going to be critical to the growth of the AWS network, and Amazon as a whole.
As this is a green-field project that is just getting started, many decisions are yet to be made, about not only the software components this role will own, but also around the overall customer experience. By joining this effort early in the definition phase, you have an opportunity to shape how one of the largest networks on the planet is going to be operated for at least the next decade.
There’s little else to indicate what might be involved, but the post alone promises some big changes ahead.
The European Union (EU) is stepping up sanctions on Russia over its invasion of Ukraine, floating the possibility of prohibiting cloud providers from operating in the country.
Countries and companies around the world have imposed sanctions on Russia, in response to its actions, working to make its invasion of Ukraine as costly as possible. The sanctions have already taken a toll, with Russia possibly on the verge of running out of domestic storage as a result of tech companies pulling out of the country.
The EU is now looking to take measures even further, with plans to prohibit cloud providers from offering their services in-country, according to Reuters. As Reuters points out, it’s unclear how much the prohibition would impact Russia, since the major cloud providers have already pulled out of the country of their own accord.
Either way, the decision illustrates the challenges Russia is facing accessing technology and services countries now take for granted.
Just months after being spun off from Dell, VMware is reportedly in talks to be acquired by Broadcom.
Broadcom is a leading semiconductor firm based in the US. Its products are used in everything from home networking to smartphones to data centers. The company has increasingly been diversifying beyond the semiconductor industry, with a focus on enterprise software. According to Reuters that includes pursuing a deal to purchase VMware.
VMware helped pioneer the virtualization industry and leveraged that into becoming a cloud service provider. The company’s software helps power some of the biggest names in the business. The company was owned by Dell, before the latter spun it off in late 2021. Michael Dell maintained a 40% stake in VMware after the spin-off, potentially putting him in a position to benefit greatly from a sale to Broadcom.
According to Reuters’ sources, the negotiations are ongoing, with no deal imminent. There were also no terms of the negotiations disclosed.
The global cloud market is set to expand at a rapid pace, reaching $750 billion by 2027, thanks in large part to the growth of hybrid cloud options.
New research from SkyQuest Technology shows the cloud market is set to grow at an annual compound growth rate (CAGR) of 30.10% during the forecast period of 2020 to 2027. By 2027, the total market will be worth some $750 billion.
Cloud computing’s growth is being driven by a wide array of factors. The pandemic-fueled move toward remote and hybrid work has been a significant driving force, as has the cloud’s ability to help companies be more nimble and competitive.
Hybrid cloud, in particular, provides these benefits, giving organizations the ability to quickly adapt to changing demand. As a result, not only did hybrid cloud account for 25% of the market in 2021, but it will continue to be a growth driver.
In 2021, hybrid cloud segment held a significant share of more than 25% share in the global market. The segmental growth of the market is attributed to the certain advantages offered by hybrid cloud when compared with other deployment type. Using a hybrid cloud allows businesses to scale computer resources while also reducing the need to invest large sums of money to handle short-term spikes in demand, as well as freeing up local resources for more sensitive data or applications. Hence, this contributes to the segmental market growth.
Some of the biggest tech companies have already bet big on hybrid cloud options. IBM is one such company, announcing in late-2020 that it would split into two companies, with the core business focused on hybrid cloud computing.
IBM and AWS have signed a collaboration agreement to provide IBM’s significant software catalog as Software-as-a-Service (SaaS) on AWS.
AWS is the leading cloud provider in the world and, while not cracking the top three, IBM is nonetheless a significant player. The company recently announced its intentions to split, with the core of the company focused on hybrid cloud offerings. While they may be competitors, that isn’t stopping the two companies from working together to provide IBM’s breath of software and tools on the AWS platform.
The agreement will cover IBM’s software for AI, automation, data, security, and sustainable capabilities. The solution is cloud-native on AWS, and is built on Red Hat OpenShift Service on AWS (ROSA).
The two companies have also agreed to work together on “a broad range of joint investments,” all with the goal of making it easier for customers to use IBM solutions on AWS.
“As hybrid cloud continues to become the reality for our clients, IBM is ready and willing to meet them with a flexible and cloud-native software portfolio wherever they are in the cloud or in data centers,” said Tom Rosamilia, Senior Vice President, IBM Software. “By deepening our collaboration with AWS, we’re taking another major step in giving organizations the ability to choose the hybrid cloud model that works best for their own needs and workloads, freeing them up to instead focus on solving their most pressing business challenges.”
“Our collaboration with IBM allows joint customers to accelerate their modernization to the cloud and consume IBM services in a cloud native manner on AWS,” said Matt Garman, Senior Vice President of Sales and Marketing at AWS. “Through our multiyear agreement, AWS will work with IBM to offer a broad array of IBM Software as SaaS on AWS. In addition, we’ll be working together on stronger joint marketing and co-selling programs for customers.”