All posts by David_H_Deans

How AI developers are driving new demand for IT vendor services

Preparing for the adoption of new technologies is challenging for many large enterprise organisations. That's why savvy CIOs and CTOs seek information and guidance from vendors that can assist them on the journey to achieve digital business transformation. Meanwhile, investment in artificial intelligence (AI) systems and services will continue on a high-growth trajectory.

According to the latest worldwide market study by International Data Corporation (IDC), spending on AI systems will reach $97.9 billion in 2023 – that's more than two and a half times the $37.5 billion that will be spent in 2019. The compound annual growth rate (CAGR) for AI in the 2018-2023 forecast period will be 28.4 percent.

Artificial intelligence market development

"The AI market continues to grow at a steady rate in 2019 and we expect this momentum to carry forward," said David Schubmehl, research director at IDC. "The use of artificial intelligence and machine learning (ML) is occurring in a wide range of solutions and applications from ERP and manufacturing software to content management, collaboration, and user productivity."

Artificial intelligence and machine learning are top of mind for most organisations today, and IDC expects that AI will be the disrupting influence changing entire industries over the next decade.

Spending on AI systems will be led by the retail and banking industries, each of which will invest more than $5 billion in 2019. Nearly half of the retail spending will go toward automated customer service agents and expert shopping advisors & product recommendation systems. The banking industry will focus its investments on automated threat intelligence and prevention systems and fraud analysis and investigation.

Other industries that will make significant investments in AI systems throughout the forecast include discrete manufacturing, process manufacturing, healthcare, and professional services. The fastest spending growth will come from the media industry and federal or central governments with five-year CAGRs of 33.7 percent and 33.6 percent respectively.

Investments in AI systems continue to be driven by a wide range of use cases. The three largest use cases — automated customer service agents, automated threat intelligence and prevention systems, and sales process recommendation and automation — will deliver 25 percent of all spending in 2019. The next six use cases will provide an additional 35 percent of overall spending this year.

The use cases that will see the fastest spending growth over the 2018-2023 forecast period are automated human resources (43.3 percent CAGR) and pharmaceutical research and development (36.7 percent CAGR). However, eight other use cases will have spending growth with five-year CAGRs greater than 30 percent.

Decision-makers across all industries are now grappling with the question of how to effectively proceed with their AI journey.  That's why the largest share of technology spending in 2019 will go toward services, primarily IT services, as firms seek outside expertise to design and implement their AI projects.

Hardware spending will be somewhat larger than software spending in 2019 as firms build out their AI infrastructure, but purchases of AI software and AI software platforms will overtake hardware by the end of the forecast period with software spending seeing a 36.7 percent CAGR.

Outlook for AI applications development growth

On a geographic basis, the United States will deliver more than 50 percent of all AI applications development spending throughout the forecast period, led by the retail and banking industries. Western Europe will be the second-largest geographic region, led by banking and discrete manufacturing.

China will be the third-largest region for AI spending with retail, state or local government, and professional services vying for the top position. The strongest spending growth over the five-year forecast period will be in Japan (45.3 percent CAGR) and China (44.9 percent CAGR).

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Public cloud revenue will reach $500 billion in 2023: The key factors driving it

The pace of cloud computing adoption will accelerate as more organizations explore hybrid IT strategies. CIOs and CTOs will fine-tune the mix of on-premises and managed cloud services for their user's varied applications and workloads.

Worldwide spending on public cloud services and infrastructure will more than double over the 2019-2023 forecast period, according to the latest market study by International Data Corporation (IDC).

With a five-year compound annual growth rate (CAGR) of 22.3 percent, public cloud spending is forecast to grow from $229 billion in 2019 to reach nearly $500 billion in 2023.

Public cloud service market development

"Adoption of public (shared) cloud services continues to grow rapidly as enterprises, especially in professional services, telecommunications, and retail, continue to shift from traditional application software to software as a service (SaaS) and from traditional infrastructure to infrastructure as a service (IaaS) to empower customer experience and operational-led digital transformation initiatives," said Eileen Smith, program director at IDC.

SaaS will remain the largest category of cloud computing, capturing more than half of all public cloud spending in throughout the forecast period. SaaS spending, which is comprised of applications and system infrastructure software (SIS), will be dominated by applications purchases.

The leading SaaS applications will be customer relationship management (CRM) and enterprise resource management (ERM). SIS spending will be led by purchases of security software and system and service management software.

Infrastructure as a service (IaaS) will be the second largest category of public cloud spending. IaaS spending, comprised of servers and storage devices, will also be the fastest growing category of cloud spending with a five-year CAGR of 32 percent.

Platform as a service (PaaS) spending will grow nearly as fast (29.9 percent CAGR) led by purchases of data management software, application platforms, and integration and orchestration middleware.

Three industries – professional services, discrete manufacturing, and banking – will account for more than one-third of all public cloud services spending throughout the forecast period. While SaaS will be the leading category of investment for all industries, IaaS will see its share of spending increase significantly for industries that are building data and compute-intensive services.

For example, IaaS spending will represent more than 40 percent of public cloud services spending by the professional services industry in 2023 compared to less than 30 percent for most other industries. Professional services will also see the fastest growth in public cloud spending with a five-year CAGR of 25.6 percent.

On a geographic basis, the United States will remain the largest public cloud services market, accounting for more than half the worldwide total through 2023. Western Europe will be the second largest market with nearly 20 percent of the worldwide total.

China will experience the fastest growth in public cloud services spending over the five-year forecast period with a 49.1 percent CAGR. Latin America will also deliver strong public cloud spending growth with a 38.3 percent CAGR.

Outlook for cloud service applications growth

Very large businesses will account for more than half of all public cloud spending throughout the forecast period, while medium-sized businesses will deliver around 16 percent of the worldwide total.

Small businesses will trail large businesses by a few percentage points while the spending share from small offices will be in the low single digits.

Moreover, all the company size categories – except for very large businesses – will experience spending growth greater than the overall market.

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How data and analytics benefits need to be driven by cultural change

Managing big data apps is a challenge for many IT organisations. Moreover, chief data officers (CDOs) and their data and analytics (DA) teams are not achieving the best balance required to deliver superior performance, according to the latest market study by Gartner.

"CDOs are generally focused upon the right things, but they do not have the right mix of activities," said Debra Logan, vice president at Gartner.

Data and analytics market development

The Gartner survey found that while the creation of a data-driven culture was ranked the number one critical factor to the DA team, there were conflicting rankings for technical and nontechnical activities (data integration and data skills training), and strategic and tactical activities (enterprise information management [EIM] program and architecting a DA platform).

While the implementation of a DA strategy was ranked the number three most-critical success factor by 28% of CDOs, another strategic activity – creating a data literacy program – was ranked only 12th.

This was despite the fact that, in the same survey, ‘poor data literacy’ was rated the number one roadblock to creating a data-driven culture and realising its business benefits.

"The low ranking of strategic activities can be explained because the majority of organisations are at maturity level 3 or higher for EIM and business intelligence and analytics," said Logan.

While the survey shows that information governance is important, especially master data management (MDM), CDOs should never lose sight of the business outcomes they are trying to achieve. Focusing exclusively on governance, even MDM, is not enough to succeed as a CDO.

A majority of CDO respondents rated machine learning (ML) and artificial intelligence (AI) as critical at 76% and 67%, respectively. 65% of respondents were using or piloting ML, while 53% were using or piloting AI.

However, a relatively small percentage of CDOs that were surveyed are already using or piloting smart contracts (18%) or blockchain (16%).

In terms of measuring the value of their organisation’s information and data assets, only 8% of CDOs were measuring the financial value of DA.

45% of CDOs reported they produce some data quality metrics – such as accuracy, completeness, scale and usage – while 29% said they measure the impact of key information and data assets on business processes, such as KPIs.

The Gartner survey also found that the majority of CDOs generated value from information assets to improve internal processes (60%) and increase the value of products and services (57 percent), with a focus on efficiency.

Outlook for DA applications innovation

Half of CDOs reported a focus on enhancing new offerings by innovating with information. Other means to realise value from information assets also lagged. 19% of CDO respondents were selling or licensing information via data brokers or online marketplaces and only 17% were selling or licensing to others for cash.

Overall, respondents using information and data assets to generate indirect economic benefits were more likely to report superior organisational performance when engaged in improving or developing new offerings, in increasing the value of their products or services, and in exchanging information with business partners for goods, services or favourable contract terms.

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How public cloud continues to drive demand for cybersecurity solutions

Ongoing investment in cybersecurity solutions continues to grow. According to the latest worldwide market study by Canalys, cybersecurity solutions for public cloud and 'as a service' accelerated in the first quarter of 2019. Those deployment models collectively grew 46 percent year-on-year.

These type of solutions accounted for 17.6 percent of the total cybersecurity market value — that's up from 13.8 percent in the same period a year ago. Virtual security appliances and agent solutions also grew significantly, up by 18.2 percent on an annual basis.

Cybersecurity solutions market development

Traditional security hardware and software deployments still dominate, representing almost 75 percent of the total market. Both deployment models continued to grow but at a slower rate of just over 8 percent. This growth highlights the ongoing transition in cybersecurity solutions, as organisations look to protect more data assets and workloads located in the public cloud.

Moreover, IT vendors have introduced new ways of doing business with channels and enterprise customers in terms of purchasing, consumption and servicing — as well as helping simplify security operations within increasingly complex IT environments.

The worldwide cybersecurity market reached $9.7 billion in terms of shipments in the latest quarter — that's up 14.2 percent from $8.5 billion in Q1 2018.

 

 

According to the Canalys assessment, enterprise IT investment in cybersecurity shows no sign of slowing down. "The security industry will be immune to the increasingly challenging macro-economic and political environment," said Matthew Ball, principal analyst at Canalys.

There's a troubling trend that has raised awareness about the ultimate cost of an inadequate defense to counter online criminal activity. Recent high-profile ransomware attacks have resulted in some organisations paying large sums to regain access to critical IT systems and their related data.

Strengthening security strategies across devices, infrastructure, perimeters and applications will continue to be critical. Increasing employee training and gaining more comprehensive cybersecurity insurance will also be important.

As new cyber threats appear in the online arena, more security software startups will likely emerge, adding to an already crowded market. Product differentiation will be key, but also offering customers a choice of deployment models and simplified licensing will be vital.

Outlook for cybersecurity solutions growth

The challenge for enterprise organisations in both the public and private sectors is to maintain pace with the evolving and diverse range of online security threats. Many think they're too small or not high-profile enough to be targeted, but online hackers will seek to exploit any IT vulnerabilities.

This threat landscape is creating opportunities for IT channel partners to expand their capabilities to provide more holistic cybersecurity offerings to assess, recommend, deploy, integrate and manage multi-vendor solutions and services incorporating several deployment models.

Overall, the channel represented 92.3 percent of the cybersecurity solutions shipment value in the first quarter of 2019.

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Why CEOs crave digital transformation results – and the greater impact on business growth

Digital transformation fuels upside market opportunities, and related growth goals are now the CEO's top business priority, according to the latest worldwide study by Gartner. Moreover, a growing number of CEOs will focus more on financial priorities – especially profitability improvement.

The annual survey of CEO and senior business executives in the fourth quarter of 2018 examined their business issues, as well as some areas of technology agenda impact. In total, 473 business leaders of companies with $50 million or more – and 60 percent with $1 billion or more – in annual revenue were qualified and surveyed.

Digital business market development 

"After a significant fall last year, mentions of growth increased this year to 53 percent, up from 40 percent in 2018," said Mark Raskino, vice president at Gartner. "This suggests that CEOs have switched their focus back to tactical performance as clouds gather on the horizon."

The survey results showed that a popular solution is to look in other geographic locations for growth. Responses mentioned other cities, states, countries and regions, as well as 'new markets' would also include some geographic reach — although a new market can also be industry-related, or virtual.

Twenty-three percent of CEOs see significant impacts arising from recent developments in tariffs, quotas and other forms of trade controls. Another 58 percent of CEOs have general concerns about this issue, suggesting that more CEOs anticipate it might impact their businesses in the future.

Another way that CEOs seem to be confronting softening growth prospects and weakening margins is to seek diversification — which increasingly means the application of 'digital business' to offer new products and revenue-producing channels.

Eighty-two percent of Gartner's survey respondents agreed that they had a management initiative or transformation program underway to make their companies more digital — that's up from 62 percent in 2018.

Cost management has risen in CEO priorities. When asked about their cost-control methods, 27 percent of respondents cited technology enablement, securing the third spot after measures around people and organisation, such as bonuses and expense or budget management.

However, when asked to consider productivity and efficiency actions, CEOs were much more inclined to think of digital business technology as a tool. Forty-seven percent of respondents mentioned technology as one of their top two ways to improve productivity.

According to the Gartner assessment, digital business planning must include the whole executive committee. However, the survey results showed that CEOs are concerned that some of the executive roles do not possess strong or even sufficient digital skills to face the future.

On average, CEOs believe that sales, risk, supply chain and human resource officers are most in need of more digital expertise. And, once all executive leaders are more comfortable with the digital sphere, new capabilities to execute on their business strategies will need to be developed.

Outlook for digital transformation skills development

When asked which organisational competencies their company needs to develop the most, 18 percent of CEOs named talent management, closely followed by technology enablement and digitalisation (17 percent) and data centricity or data management (15 percent).

"Datacentric decision-making is a key culture and capability change in a management system that hopes to thrive in the digital age. Executive leaders must be a role model to encourage and foster data centricity and data literacy in their business units and the organisation as a whole," Mr. Raskino concluded.

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Cloud IaaS revenue will top $150 billion in 2023, says Frost & Sullivan

Demand for cloud computing infrastructure as a service (IaaS) is expected to drive the current $45.6 billion market toward $150.7 billion by 2023 – that's a compound annual growth rate of 27 percent, according to the latest worldwide market study by Frost & Sullivan.

Enterprises are using cloud services for strategic benefits such as supporting digital transformation efforts rather than for tactical ones, like reducing IT infrastructure costs and the hardware or software maintenance burden.

This market shift has changed the way enterprises choose and manage their IT infrastructure, and led them to deploy applications across multiple infrastructures, from on-premises private cloud to public cloud (multi- and single-tenant), resulting in higher demand for IaaS offerings.

Hybrid multi-cloud market development

"As the mix of deployment models and best-of-breed cloud IaaS vendors becomes increasingly diverse, single-tenant IaaS will gain revenue share over multi-tenant services," said Maiara Munhoz, senior industry analyst at Frost & Sullivan.

Meanwhile, the emergence of cloud brokerage and cloud management platforms is boosting the trend of hybrid and multi-cloud deployment strategies, making managed cloud services providers key in supporting enterprises and their CIO or CTO requirements.

Frost & Sullivan analysts believe that managed service providers (MSPs) will support their customers with workload assessment and placement, workload migration, and hybrid cloud integration.

The North America region continues to be the most mature cloud IaaS market globally, followed by EMEA, but they are expected to gradually make room for the APAC and LATAM regions.

Some countries in APAC, such as Japan and Australia, are more mature, while India, China, Singapore, South Korea, and Hong Kong are fast-growing markets.

Outlook for cloud IaaS applications growth

Going forward, it will be essential for vendors of cloud computing IaaS to invest in integrated services, on-premises and in the public cloud. For further growth opportunities, vendors should:

  • Offer more advanced services in the cloud — such as containers and serverless architecture — and tools for enterprises to manage, analyze, and act on their data
  • Support hybrid deployment models, as enterprises realize that a single cloud or deployment model will not address all their application requirements
  • Partner with MSPs to deliver training, programs and features to support them
  • Invest in educating clients on cloud computing technology, as enterprises still need guidance on how to use cloud services to meet goals for business innovation and digital transformation

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How the combination of cloud and AI is influencing IT investment strategy

The pace of change from a traditional capital-intensive IT infrastructure model to a more flexible hybrid multi-cloud services model is influencing enterprise spending trends across the globe.

Worldwide IT spending is forecast to total $3.79 trillion in 2019 — that's an increase of just 1.1 percent from 2018, according to the latest global market study by Gartner.

IT infrastructure market development

"Currency headwinds fuelled by the strengthening US dollar have caused us to revise our 2019 IT spending forecast down from the previous quarter," said John-David Lovelock, vice president at Gartner. "Through the remainder of 2019, the US dollar is expected to trend stronger, while enduring tremendous volatility due to uncertain economic and political environments and trade wars."

In 2019, technology product managers will have to get more strategic with their portfolio mix by balancing products and services that will post growth in 2019 with those larger markets that will trend flat to down.

According to the Gartner assessment, successful IT product managers in 2020 will have had a long-term view of the changes made in 2019.

The data centre systems segment will experience the largest decline in 2019 with a decrease of 2.8 percent. This is mainly due to the expected lower average selling prices (ASPs) in the server market driven by adjustments in the pattern of expected component costs.

Moreover, the shift of enterprise IT spending from traditional (non-cloud) offerings to new, cloud-based alternatives is continuing to drive growth in the enterprise software market.

In 2019, the market is forecast to reach $427 billion; that's up 7.1 percent from $399 billion in 2018. The largest cloud shift has so far occurred in application software.

However, Gartner expects increased growth for the infrastructure software segment in the near-term, particularly in integration platform as a service (iPaaS) and application platform as a service (aPaaS).

"The choices CIOs make about technology investments are essential to the success of a digital business. Disruptive emerging technologies, such as artificial intelligence (AI), will reshape business models as well as the economics of public- and private-sector enterprises. AI is having a major effect on IT spending, although its role is often misunderstood," said Mr. Lovelock.

Outlook for AI applications spending growth

Gartner believes that AI is not a product, it is really a set of techniques or a computer engineering discipline. As such, AI is being embedded in many existing products and services, as well as being central to new development efforts in every industry.

Gartner’s AI business value forecast predicts that organisations will receive $1.9 trillion worth of benefit from the use of AI this year alone.

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Why legacy IT vendors are seeking cloud niche viability

Leading hyperscale cloud service providers continue to disrupt the traditional IT infrastructure vendor landscape, as more enterprise CIOs and CTOs expand their adoption of multi-cloud strategies that marginalise the remaining applications for on-premises data centres.

Legacy IT vendors that were reluctant to evolve their business model will now seek niche cloud market segments where they can differentiate their offerings. There's no viable growth path that's based upon hardware or software market status-quo assumptions. However, distinctive professional services are still a source of new opportunities.

Cloud computing market development

The worldwide public cloud services market is projected to grow 17.5 percent in 2019 to total $214.3 billion — that's up from $182.4 billion in 2018, according to the latest global market study by Gartner.

The fastest-growing market segment will be cloud system infrastructure services, or infrastructure as a service (IaaS), which is forecast to grow 27.5 percent in 2019 to reach $38.9 billion — that's up from $30.5 billion in 2018.

The second-highest growth rate of 21.8 percent will be achieved by cloud application infrastructure services, or platform as a service (PaaS).

"Cloud services are definitely shaking up the industry," said Sid Nag, vice president at Gartner. "At Gartner, we know of no vendor or service provider today whose business model offerings and revenue growth are not influenced by the increasing adoption of cloud-first strategies in organisations. What we see now is only the beginning, though."

Through 2022, Gartner projects the market size and growth of the cloud services industry at nearly three times the growth of overall IT services.

According to recent Gartner surveys, more than a third of organisations see cloud investments as a top three investing priority, which is impacting market offerings. Gartner expects that by the end of 2019, more than 30 percent of technology providers’ new software investments will shift from cloud-first to cloud-only.

This means that license-based software consumption will further plummet, while SaaS and subscription-based cloud consumption models continue their rise.

"Organisations need cloud-related services to get on-boarded onto public clouds and to transform their operations as they adopt public cloud services," said Mr. Nag.

Currently, almost 19 percent of cloud budgets are spent on cloud-related services, such as cloud consulting, implementation, migration and managed services, and Gartner expects that this rate will increase to 28 percent by 2022.

Outlook for cloud computing application growth

According to the Gartner assessment, as cloud computing continues to become mainstream within most organisations, technology product managers for cloud-related service offerings will need to focus on delivering solutions that combine experience and execution with hyperscale providers’ offerings.

This complementary approach will drive both the transformation and optimisation of an organisation’s IT infrastructure and operations. This vendor coexistence model is the multi-cloud market reality.

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How augmented analytics is turning big data into smart data

Smart data is generated by filtering out the noise from big data that's generated by media, business transactions, Internet of Things (IoT), and data exhausts from online activity. Smart data can uncover valuable commercial insights, by improving the efficiency and effectiveness of data analytics.

Furthermore, vast amounts of unstructured big data can be converted into smart data using enhanced data analytics tools that utilise artificial intelligence (AI) and machine learning (ML) algorithms.

Advancements in data processing tools and the adoption of next-generation technologies – such as augmented analytics used to extract insights from big data – are expected to drive the smart data market toward $31.5 billion by 2022.

Augmented analytics market development

Augmented analytics automates data insights gathering and provides clearer information, which is not possible with traditional analysis tools. Companies such as Datameer, Xcalar, Incorta, and Bottlenose are already focusing on developing end-to-end smart data analytics solutions to obtain valuable insights from big data.

"Markets such as the US, the UK, India, and Dubai have rolled out several initiatives to use AI and ML-powered data analytics tools to generate actionable insights from open data,” said Naga Avinash, research analyst at Frost & Sullivan.

Smart data will help businesses reduce the risk of data loss and improve a range of activities such as operations, product development, predictive maintenance, customer experience and innovation.

Frost & Sullivan’s recent worldwide market study uncovered key market developments, technologies used to convert big data to smart data, government programs, and the IT organizations applying data analytics. It also found use cases for smart data applications.

"The evolution of advanced data analytics tools and self-service analytics endows business users instead of just data scientists with the ability to conduct analyses," noted Avinash.

Technology developers can ensure much wider adoption of their solutions by offering in-built security mechanisms that can block attackers in real time. They could also develop new business models such as shared data economy and even sell data-based products or utilities.

Outlook for augmented analytics application growth

As an example of other application scenarios, various governments have already begun to use data analytics on 'open data' sets to solve issues related to smart city and municipal water crises. Other important growth opportunities for smart data solution providers include:

  • Employing augmented analytics and self-service data analytics tools, as they enable any business user to make queries, analyse data, and create customized reports and visualisations
  • Leveraging a data monetisation approach, as it allows businesses to utilize and bring value at every point in the data value chain
  • Adding new data analytics services to existing offerings, driven by enterprise CIOs and CTOs
  • Partnering with innovative smart data solutions providers (emerging startups) across the world. This will help companies enhance their implementation capabilities by leveraging open-source smart data solutions focused on enterprise data management and analytics
  • Collaborating with the government to address the digital transformation talent shortage and setting clear investment and data strategy goals

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How channel partners are driving hyperscale cloud growth

Hyperscale cloud service providers continue to leverage their low-cost advantage to drive growth. According to the latest worldwide market study by Canalys, Google Cloud was the fastest-growing cloud infrastructure vendor last year – up more than 90% year on year – increasing its share of the total market from 6% in 2017 to 8% in 2018.

The top four hyperscale cloud service providers accounted for 61% of the total market in 2018. Amazon Web Services (AWS) remained the leader on 32%, followed by Microsoft Azure with 17%, Google Cloud in third place with 8% and Alibaba Cloud with 4%.

Hyperscale cloud market development

Canalys reports that hyperscale cloud infrastructure services are in a period of sustained growth, with spending up 46% in 2018 to more than $80 billion. Expenditure is also forecast to surpass $143 billion in 2020.

More businesses are deploying a hybrid multi-cloud strategy, integrating multiple providers with their existing on-premises IT infrastructure. Canalys estimates 30% of cloud infrastructure services spend, just over $24 billion, went through the IT channel of distributors, resellers, service providers and systems integrators in 2018.

"AWS, Microsoft Azure, Google Cloud and Alibaba Cloud are all increasing channel investment to raise their profiles, as competition for enterprise customers increases and workload cloud migration diversifies," said Alastair Edwards, chief analyst at Canalys.

The channel will play a vital role for the cloud service providers, in terms of boosting their customer reach, from both a sales and technical perspective. But each of the hyperscale cloud service provider titans current partner reach, engagement and program maturity differs — with Google Cloud trailing both AWS and Microsoft Azure in all areas. Alibaba Cloud is further back, behind the leaders.

 

 

Canalys estimates the top three providers represented 65% ($16 billion) of the channel's total cloud infrastructure services business in 2018. Microsoft manages one of the largest channel ecosystems in the technology sector and its Cloud Solution Provider (CSP) program is the most mature among the cloud titans, according to the Canalys assessment.

Approximately 74% of revenue from Azure is estimated to come via its partners, which is by far the highest percentage in the sector. In contrast, AWS channel business accounts for around 15%, though its reach is growing rapidly, AWS having recruited over 35,000 partners to date, with hundreds a month wanting to join its partner program.

Canalys estimates that Google Cloud's channel business accounts for just over 25% of its $7 billion cloud infrastructure revenue. In spite of Google Cloud's rapid growth, its channel reach is relatively small, though it is trying a differentiated approach by being more focused on specific applications and verticals.

An estimated 13,000 partners have joined its partner program, of which just over 100 have achieved the highest-tier Premier Partner status, while less than a third of those have achieved a Specialization Partner designation.

Outlook for cloud channel application growth

In a recent Candefero channel survey, 20% of respondents think there is huge potential to working with Google Cloud, while 22% said they will work with other cloud service providers instead. Cloud computing service channel partners will continue to align with the market leaders.

That said, 44% of partners were intrigued to know more about partnering with Google. Their new leadership brings the experience of working with the largest enterprise customers. But to date, Google has not captured the broader channel where AWS and Microsoft are being more proactive.

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