Rolling Thunder Forecast for Booming Cloud Market
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There is a broad consensus among industry analysts and the vendors they track that enterprise adoption of cloud services is booming. The only variable is the expected rate of growth.
Year-end estimates are trickling in, and market watchers note that broad adoption of AI and machine learning are fueling adoption of cloud, infrastructure, platform and software services. So, too, is the shift to cloud native services as the plumbing needed to shift workloads to the cloud gains momentum.
Among the bullish cloud forecasts is the biannual survey by market watcher IHS Markit (yes, they spell it "Markit"). IHS projects that the global "off-premises" cloud services market that includes infrastructure, platform and software services will surge at a 22 percent compound annual growth rate through 2021 to $343 billion.
Among the expected drivers is the embrace of AI and machine models increasingly being used to automate various aspects of IT operations along with operational analytics. Cloud service providers are "continually looking for ways to innovate by integrating machine learning and artificial intelligence techniques into their services," IHS notes in its cloud services forecast released on Thursday (Nov. 16)
"These techniques give providers a clear a way to differentiate themselves by building teams of highly skilled experts that most enterprises cannot duplicate."
As ever-greater volumes and types of data are stored in the cloud, potential enterprise customers also are gaining access to what vendors such as Nvidia (NASDAQ: NVDA) promote as supercomputing in the cloud. Touting the company's "GPU Cloud" this week at the SC17 conference in Denver, Nvidia founder and CEO Jensen Huang claimed the availability of the chipmaker's Volta architecture on the Amazon Web Service's (NASDAQ: AMZN) cloud and elsewhere means "you can rent yourself a supercomputer for three dollars" per hour.
These shifts were reflecting in major cloud vendors' most recent quarterly financial disclosures. Synergy Research estimated last month that the overall cloud market, which it defines as infrastructure and platform services along with hosted private clouds, is growing by more than 40 percent annually. AWS commands 35 percent of the market, and continues to gain market share. Cloud competitors such as Alibaba Group (NYSE: BABA), Google (NASDAQ: GOOGL) and Microsoft (NASDAQ: MSFT) continue to boost revenues and market share at a faster pace than AWS, but "the reality is that in this market Amazon remains bigger than its next five largest competitors combined," the market researcher asserted.
Intense competition among cloud providers also is expected to drive industry consolidation as well as cloud partnerships. For example, Rackspace announced this week is has completed a deal to acquire Datapipe, a managed services provider. Rackspace said the acquisition would bolster its managed hosting and private cloud services.
Among the growing list of cloud partnerships are several designed to take advantage of enterprise adoption of application containers and other micro-services. For example, Google, Pivotal and VMware (NYSE: VMW) announced a cloud partnership this summer whereby Pivotal's container service would run the Kubernetes container orchestrator on Google Cloud Platform as well as VMware vSphere.
