As the multi-billion-dollar economy is set to soar even further, we see tech giants compete feverishly to gain a chokehold in the ever-expanding cloud market share.
In a world rapidly rehabilitating from the pandemic, 2021 saw several enterprises loosening their purse strings to adopt the best in cloud infrastructure. The enterprise cloud market reached a whopping $ 180 billion spends, which is a bump of around 37% to the year before. Gartner estimated that the cloud market size may reach an astronomical $ 480 billion in the current year. Amazon Web Services (AWS), the online cloud platform, still holds the greater share of the pie of 33%, besting Microsoft at 21%, Google at 10%.
[box type=”info” align=”” class=”” width=””]Total spending in the public cloud market was at an all-time high of around $ 50 billion, a significant jump of around 36% for the previous year[/box]
Without looking deeper into the service offerings, a recent report suggested that in the fourth quarter, total spending in the public cloud market was at an all-time high of around $ 50 billion, a significant jump of around 36% for the previous year. Although the leaderboard hasn’t changed significantly, indicating that the battle for a greater market share will continue and grow even more interesting. Will Amazon continue to lead by a significant margin? If one observes the trend, the growth of competitors indicates that Amazon may find it harder to stay on the top, given the growth of its competitors in the recent quarter. Overall, 8 of the largest companies still hold approximately 80% of the market.
Cloud computing in the new normal
Microsoft, Google and Alibaba have reported significant returns in the recent past, which might suggest a difference in the leaderboard. Microsoft reported a $ 22 billion revenue in 4Q, yet its recent acquisition of Activision Blizzard has come under scrutiny. Google’s cloud business has grown at around 45%, yet it doesn’t catch up to the speed of Azure or AWS. Barring Alibaba’s earnings, all the three US giants have reported and claimed their stake in the pie. The three US giants and the Asian leader are likely to grow rapidly with innovation, automation and integration. Other players like Oracle are creeping up the ladder, as analysts highly rate its cloud database as the best for mission-critical applications.
Why does AWS still hold an upper hand?
A glance, at the vision of the founder Jeff Bezos, is enough to see why the firm still outruns some of the fastest-growing firms like Microsoft and Google. He has equated AWS to the utility companies requiring heavy infrastructure spending that existed back in the 1900s. Traditionally, it was seen that companies always hunted for large physical storage spaces which are often turned out to be an excessive and redundant expenditure. Offering the ‘pay for what you use’ model for its clients, the model of AWS, deems economical for large and small firms with no upfront cost to build the storage and much less need to estimate usage. This scalability and adaptability of the AWS model based on customer’s usage, has greatly benefited upstarts as well as large firms, particularly during the disruption in the pandemic.
Gartner estimates that AWS is five times the size of 14 of its competitors a decade ago. Despite some anti-trust concerns. AWS has also led due to its competitive pricing ever since its launch. Netflix and Airbnb are just a few amongst the million users to contribute to its lion’s share. To host its growing clientele, it was reported that the firm spent an estimated $ 3.5 billion on a cluster of data centers in Virginia in the decade prior to the pandemic.
AWS India’s Puneet Chandok believes that the new normal will require greater agility to scale up and down, giving the greater drive for adopting the cloud. He estimates that SMEs will drive the business in the current year. Perhaps, this race is likely to heat up within India, as L&T and Microsoft recently signed an MoU for cloud offerings in the regulated sector. Last year, Nasscom estimated that India would need 20 lakh cloud professionals by 2025, indicating that India could be central for any of these computer giants to maintain its lead.
– Anupama Sughosh
