Google has claimed that the number of its cloud deals exceeding $1 million has ‘more than doubled’ over the past 12 months in what it called a ‘strong’ year – yet remained reticent in disclosing details over run rates.

The company’s fourth quarter and fiscal year results, published late yesterday, saw Google’s ‘other’ revenues – of which Google Cloud is a part – hit $6.49 billion (£4.99bn) for the most recent quarter, representing a 30% increase from this time last year. Indeed, this quarterly figure was a 39% uptick from Q318. Total yearly revenues across the business went up 23% to $136.8bn.

“Google Cloud closed out [a] strong year with momentum across the business,” Google CEO Sundar Pichai told analysts in an earnings call. “Our focus on helping customers digitally transform their business is paying off.”

Here’s what we know from the call:

• Google has ‘more than doubled’ the number of both its $1 million cloud deals and multi-year contracts signed, while the number of blockbuster $100 million deals has also risen
• Google’s cloud arm saw the most new employees in this quarter for both technical and sales roles
• More than five million paying customers have signed up for collaboration tool G Suite

Yet responding to an analyst question, Google chief financial officer Ruth Porat did not go into more specific detail on Google’s cloudy revenues. “In terms of growth, cloud does continue to deliver sizeable revenues growth driven by [Google Cloud Platform] and GCP does remain one of the fastest-growing businesses across Alphabet,” said Purat, before emphasising the deals already outlined.

The biggest news by far from the most recent quarter was the departure of Google Cloud CEO Diane Greene after three years in the role, with Oracle veteran Thomas Kurian taking over. As Greene put it in her farewell letter, upon taking over in 2015 Google Cloud had ‘two significant customers and a collection of startups’, with the enterprise push ongoing.

Some have argued this push has not been fast enough, from analysts to former employees. In October Amir Hermelin, formerly product management lead at Google Cloud, argued the company’s two biggest mistakes during his tenure were dallying over the enterprise market and focusing too much on Amazon and Microsoft.

As Hermelin and Greene both noted, however, Google’s focus on machine learning was where it could differentiate. “There is an important long-term investment that lays the groundwork for our future computing needs, primarily to accelerate machine learning across our businesses – but also to support the opportunities we see in cloud, search, ads, and YouTube,” Pichai told analysts.

Nevertheless, a clear theme from the earnings call was around clearing the fog of obfuscation around its ‘other’ revenues. Amazon gives its AWS revenues clearly, as does Alibaba for Alibaba Cloud, while Microsoft gives percentage increases if not total specifics around Azure.

According to Synergy Research, in its figures analysing all the major cloud players for the most recent quarter, Google holds 7% market share alongside IBM. Amazon continues to hold more than one third (34%) of the market, with Microsoft a clear second on 15% and Alibaba on 5%. Amazon, Microsoft, Google and Alibaba all increased market share over the past 12 months – though Synergy noted IBM’s focus differs given its strength in hosted private cloud services rather than public IaaS.

“Q4 tops off a banner year for the cloud market with the annual growth rate actually nudging up from the previous year, which is an unusual phenomenon for a high-growth market of this scale,” said John Dinsdale, a chief analyst at Synergy Research.

“The rate at which the market leaders continue to expand is really rather impressive,” added Dinsdale, noting this continued performance has forced the analyst firm to review and increase its five-year market forecast. “Inevitably there will be a few road bumps along the way, but these will be minor relative to the factors that continue to drive the market.”

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If your organisation is either focusing on DevOps or employs plenty of developers, make sure you keep an eye on their workloads – or face an exodus.

That’s the primary finding from IT management software provider SolarWinds. In its latest report, which polled 336 DevOps, developer and web product manager professionals (WPMs) in the US and Canada, many workers across sectors are fed up with troubleshooting being the mainstay of their daily work.

Troubleshooting remained the most disliked component of their roles, and respondents warned that if they had to continue doing it without any signs of job advancement, they would leave their current jobs. Almost half (48%) of those polled said troubleshooting app issues was one of their three most regular tasks, while this number went up (53%) for DevOps respondents who cited it as the most frequent task.

On average, DevOps and WPMs spend less than a quarter of their time proactively optimising performance of their environments. This may be bad enough, but less urgent, more long-term tasks are being put aside. Without troubleshooting, the research argues, professionals would be able to prioritise building product roadmaps, or managing and deploying apps.

“Today’s technology professionals play an unquestioned role in driving innovation for their businesses. Application development and the end user’s experience are inextricable from business growth,” said Joe Kim, SolarWinds EVP and global chief technology officer. “Yet this survey shows this push towards innovation is minimised in favour of reactive troubleshooting tasks, which are growing due to the need for comprehensive monitoring and visibility into these applications.

“Tech professionals need to be armed with comprehensive tools that enhance visibility into cloud applications and enable them to spend less time monitoring and troubleshooting, and more time creating opportunities to move their businesses and careers forward,” added Kim. “Otherwise, businesses run the risk of a demotivated DevOps team.”

As regular readers of this publication will recognise, a cultural change is necessary in order to get DevOps initiatives off the ground. Writing for CloudTech in December, Annie Andrews, head of technology at Curo Talent, noted the disparity. “The goal of DevOps is to help deliver software quickly, robustly and efficiently. However, it is often misinterpreted as simply a need to deploy new technological tools to meet this goal,” wrote Andrews. “In practice, DevOps relies more on cultural acceptance than the integration of new tools.

“Of course, the organisation change can be supported by a collection of improved software development practices, but organisations cannot rely only on these tools,” Andrews added. “Ultimately, it starts with a change to people’s mindsets.”

You can read the full report here (email required).

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Amazon Web Services (AWS) remains the benchmark for Amazon’s profit lines and continues to improve.

The company announced revenues for AWS of $7.43 billion (£5.68bn), an increase of 45% from this time last year, with AWS revenues comprising more than 10% of Amazon’s overall sales for the quarter, up from 8.4% the year before. AWS made $2.18bn after expenses for Q4, giving it a full year profit of almost $7.3bn, or almost three quarters (72.4%) of Amazon’s overall profit for 2018.

AWS was mentioned a mere 58 times in the quarterly highlights with 11 of the 44 bullet points devoted to it. Amazon chief financial officer Brian Olsavsky told analysts that AWS “maintained a very strong growth rate and continued to deliver for customers.”

Naturally, November’s re:Invent comprised the majority of the news for the most recent quarter. The most potentially game-changing was AWS Outposts, an offering bringing AWS on-premises launched as part of an extended partnership with VMware. Machine learning and blockchain were also on the agenda, with AWS noting the sheer breadth of its portfolio as a market differentiator.

Other news included the acquisition of cloud disaster recovery and backup provider CloudEndure at the start of January, the launch of a new security offering which aimed to further mitigate S3 misconfigurations, as well as moves away from Oracle, as tweeted by Andy Jassy himself.

It’s worth noting here that while AWS continues to grow solidly with a 45% clip, Microsoft remains the quicker growing of the major cloud providers. While Redmond does not give out specific Azure figures, the company said in its filing earlier this week its revenues went up 76% compared with the previous year, at the same clip as the last quarter.

Don’t expect this to be a particularly poor performance from AWS, however. As Synergy Research, a long-time observer of the cloud infrastructure space, noted in October, given the size and continued growth of the market the ‘law of large numbers’ meant 100% growth rates cannot be maintained.

In terms of Amazon however, the mood was slightly different. Amazon’s ‘days of blockbuster growth appear to be ending’, in the words of Jeremy Bowman, writing for The Motley Fool. “Its eCommerce growth was actually worse than the 20% overall clip because that was juiced by 45% growth in AWS,” wrote Bowman.

“Amazon’s online sales are essentially growing at the pace of the industry,” Bowman added. “That may be the clearest sign yet that increasing competition from retailers such as Walmart and Target are having an impact on Amazon’s growth.”

As regular readers of this publication will know, certain retailers – Walmart included – have been ensuring their cloud infrastructure is not beholden to a competitor. Albertsons, which announced a move to Microsoft earlier this month, said it moved because of its ‘experience with big companies, history with large retailers and strong technical capabilities, and because it [wasn’t] a competitor.’ Yet speaking to CloudTech 451 Research analyst Jean Atelsek warned about this impression, saying it ‘hadn’t seen definitive evidence’ of this shift.

New AWS customers over the past quarter, meanwhile, included Ellie Mae, Korean Air, and Santander’s Openbank. There was one new customer announced alongside the financials in a sporting theme. With the Six Nations rugby union starting on Friday night, the championship is reported to be using AWS for analytics, machine learning, and deep learning services.

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Microsoft’s investor relations team is evidently not frightened about repeating itself when it comes to financial announcements season. “Microsoft Cloud drives record fourth quarter results,” the company proclaimed in July; “Microsoft Cloud strength powers record first quarter results,” it tooted in October; and now, “Microsoft Cloud strength fuels second quarter results.”

Given the figures, there are plenty of reasons for Microsoft to stress the same message. The company’s Q219 report saw total revenues of $32.5 billion (£24.7bn), an increase of 12% on this time last year. Of the key revenue buckets, productivity and business processes – which focuses more on software – broke $10bn at a 12% lift on last year, while intelligent cloud, focused more on infrastructure, hit $9.38bn at a 20% uptick.

Azure itself – for which Microsoft does not disclose specific financials – went up 76% compared with the previous year, exactly the same as the previous quarter’s figure.

In prepared remarks to analysts, CEO Satya Nadella made reference to its recent slew of retail-based customers, saying Azure was ‘front and centre’ at the recent National Retail Federation (NRF) event, where the partnership with Kroger was announced. Regarding general strategy, it was a continuation of the theme the chief executive forged at Ignite back in September around making Microsoft’s customers tech companies in their own right.

“These results speak to us picking the right secular trends in large and growing markets, many of which are still in their infancy, as well as focused innovation and execution,” said Nadella. “Leading companies in every industry are partnering with us to build their own digital capability to compete and grow. This is creating a broad opportunity for everyone, including our ecosystem.”

Nadella also focused specifically on cybersecurity and discussed the importance of a Zero Trust environment – something of which regular readers of this publication will be more than aware. In terms of specific security offerings issued this quarter, the start of this month saw two new products for Microsoft 365, its enterprise-focused suite, launched around identity and threat protection and compliance.

Responding to an analyst question around how the big customer deals break down looking specifically at Azure, Nadella said he internally compared it to relationships with OEM partners in the PC era, noting the mix required between infrastructure for compute, then data on top sprinkled with AI.

“We definitely see that path… where they’re adopting the layers of Azure,” said Nadella. “But it doesn’t stop in Azure. If you take Walgreens Boots Alliance, it was Microsoft 365 as well as Azure. In many cases, it’s Dynamics 365 – any IoT project on Azure leads to a Dynamics field service project in most instances.

“So we’re seeing the breadth and depth of our cloud offering, which is what we are really architected to have real synergies in the context of what our customers want to achieve, and that’s what we are seeing,” Nadella added.

Despite all figures going in the right direction Microsoft’s performance fell just short of Wall Street expectations. Shares fell as much as 4% in the immediate aftermath of the announcement, according to CNBC.

You can read the full financial statement here.

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SAP broke €20 billion in yearly cloud and software revenues in 2018, hitting or exceeding its raised outlook metrics in the process – and the company wants more, targeting €35bn in total revenue by 2023.

The Q4 2018 financial results saw total cloud and software revenues hit €6.3 billion (£5.5bn), representing 85% of total revenues that quarter. Naturally this statistic is somewhat obfuscatory – as regular readers of this publication will recognise, many of the largest cloud providers do it – but other stats are available. New cloud bookings for the whole of 2018 hit €1.8bn, a 25% increase on the previous year, while CEO Bill McDermott said cloud revenue grew 40% in Q4, and 38% across the full year.

Speaking to analysts in an earnings call, McDermott put the figure of ‘cloud users’ SAP holds at 180 million, and was bullish at the company’s progress, particularly after the acquisition of Qualtrics for $8 billion first announced in November.

“SAP has only winning businesses in the portfolio,” said McDermott. “Every strategic asset in the company is growing. And looking back, the belief was enterprise customers would only want to rent software. But SAP embraced the software as a service business model early on and we’re growing the cloud faster than competition – and that includes Oracle, Salesforce.com and Workday to name a few.”

Chief financial officer Luka Mucic noted that public cloud, or software and platform as a service gross margin, improved solidly during 2018. “Looking forward, we expect to realise the benefits from our platform convergence in the first half of 2019 with further acceleration in the second half,” he said. “This will set us up with full scalability going into 2020 and beyond.”

McDermott joked that he might sign his emails off in future with ‘XO’, another reference to the Qualtrics acquisition. SAP sees the research management software provider as a key piece in their jigsaw to combine operational data (O), from their side, with experiential data (X) from Qualtrics.

“This is the only strategy for SAP as we look at our bright future,” added McDermott. “And we know it’s where the world is going. Experienced management is the future and SAP owns it.”

You can read the full Q4 statement here (pdf).

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The battle for retailers’ cloud dollars continues apace, with grocer Albertsons the latest organisation to pledge its allegiance to Microsoft.

According to a CNBC report, Microsoft has signed a three-year deal to make Azure Albertsons’ preferred public cloud. The retailer, who owns the Safeway and Vons supermarket chains, will deploy the Microsoft 365 suite to employees as well as explore projects involving artificial intelligence, the report added.

Albertsons has been active in piloting technology projects in recent months. In May, BoiseDev reported the company was ‘experimenting with Amazon Go-like technology’, while earlier this month Coinstar announced new machines where users could buy bitcoin at selected Safeway and Albertsons stores.

This makes Albertsons the fourth major retailer since July to sign up with Microsoft for a strategic cloud partnership. In August, it was announced Walmart had made Microsoft its preferred cloud provider in a five-year deal, while this month has seen Kroger and Walgreens Boots Alliance partner with Microsoft.

Kroger’s partnership focuses around ‘redefining the customer experience’, as the companies put it in a press release. Two pilot stores in Ohio and Washington are set to be equipped with smart technology systems, powered by Azure, with the aim to improve customer experiences through digital, connected shelf displays. The companies are also putting together what they call ‘retail as a service’ (RaaS), a commercial offering aimed at other retailers.

For Walgreens, the pharmaceutical firm is embarking on a migration similar to Albertsons, rolling out Microsoft 365 to its staff, as well as moving the ‘majority’ of its infrastructure onto Azure. Albertsons will also continue to run some workloads in its own data centre infrastructure, per CNBC.

Analysis

The cumulative effect has led many in the industry to put two and two together and assume that, due to its heavy retail presence, retailers want to house their cloud infrastructure away from industry leader Amazon Web Services (AWS).

In the case of Walmart, it was blatant. In 2017, it was reported that Walmart had insisted partners and vendors move away from AWS if they wanted to retain their business. As columnist David Auslander – who for full disclosure is now at Azure but was working for Cognizant at the time of the article – wrote for CloudTech at the time, Microsoft and Google ‘might be the only clear winners’ in the Walmart-AWS row.

Albertsons’ approach appears to be subtler, but still noting this aspect. CIO Anuj Dhanda told CNBC the company went with Azure because of its ‘experience with big companies, history with large retailers and strong technical capabilities, and because it [wasn’t] a competitor.’

Yet a note of caution needs to be sounded before going full-steam ahead with this trend. Analyst firm 451 Research, which regularly conducts a Voice of the Enterprise survey focusing on IT trends and spending at large organisations, said it ‘hasn’t seen definitive evidence’ and that the Walmart case, with Microsoft and Google continuing to fuel the narrative, may have clouded people’s judgement.

“It’s easy to get the impression that retailers are fleeing AWS,” Jean Atelsek, digital economics unit analyst at 451 Research told CloudTech in an email. “Microsoft’s big cloud partnership with Walmart last summer seems to be the example that everyone wants to universalise to the entire cloud space. However since a lot of retailers also sell through/on AWS, they’re less likely than Walmart to see Amazon (and by extension AWS) as the devil.”

It’s worth noting here that AWS still has a panoply of leading retail customers, with Ocado, River Island and most notably Under Armour all on board. Indeed, the largest retailer on AWS’ books is arguably itself. In November AWS chief executive Andy Jassy wrote on Twitter that Amazon’s consumer businesses were moving fully off Oracle’s data warehouse and onto Amazon Redshift. The move came after Oracle co-founder Larry Ellison repeatedly noted how Amazon was a paying customer when speaking at events or to analysts.

Ultimately, while Albertsons’ move to Microsoft reinforces a trend, it’s a more general one around IT, Atelsek added. “What this really reflects is the diversification we’ve seen throughout IT, not only into different public clouds – multi-cloud – but also in corporate data centres [with] hybrid,” she said. “Many of the big retailers have armies of in-house engineers and developers to maintain an edge in adapting their IT to evolving customer expectations.

“No doubt the challenge from Amazon as an online, and now brick-and-mortar retailer and distributor has added to this urgency. But cost engineering and platform capabilities will trump any perceived disadvantage of using a competitor’s cloud infrastructure, especially in segments with razor-thin margins such as groceries,” added Atelsek.

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While the enterprise push to public cloud continues apace, it does not hurt to hear of figures which puts the scope of the journey in perspective.

According to new figures from Ping Identity, only one in five enterprises polled said they have more than half of their IT infrastructure hosted in the public cloud. Three quarters (75%) in comparison have a hybrid approach.

Perhaps not surprisingly, the key aspect holding these organisations back is security. 43% of the 300 US-based respondents said it was the biggest obstacle to cloud adoption, while 37% said it was the biggest barrier to software as a service (SaaS) adoption.

There are plenty of reasons to be fearful. More than a quarter (27%) of those polled admitted they have experienced a breach of customer identity data stored either in a public cloud, on-premises or SaaS app provider's cloud. As a result, 71% said they were spending more on protecting customer identity data on a yearly basis.

When it came to specific security tools, multi-factor authentication was cited by nine out of 10 respondents as an effective control. Yet only 60% of firms polled said they used it. Identity federation and biometric authentication were also seen as key methods, but adoption was low at 34% and 22% respectively.

Even though the new year is only less than a month old, research has shown continued enterprise concern around security in the cloud. According to NetEnrich, large enterprises were 'eagerly adopting cloud infrastructure, applications and services', albeit with three quarters (72%) noting security was their top priority for this year.

"Safeguarding customer, proprietary and partner data is more important than ever for enterprises seeking to build trust and transition to a more hybrid IT infrastructure," said Richard Bird, Ping Identity chief customer information officer. "It's imperative that IT professionals understand the value and effectiveness of the right security controls for their organisations before taking a blanket approach to protecting their data."

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Confluent, a provider of open source software based on Apache Kafka, has raised $125 million (£96m) in a series D funding round putting it at a valuation of $2.5 billion.

The funding round was led by Sequoia Capital – whose other recent runners have included Snowflake and Cohesity – with participation from Index Ventures and Benchmark.

The company sits in a very interesting position when it comes to cloud and open software. Apache Kafka, originally brought about by LinkedIn before being donated to the Apache Software Foundation, is based around stream processing and building real-time data pipelines – in essence streamlining business processes. Enterprises using Kafka to streamline their systems include eBay, The New York Times and Walmart.

Confluent was founded in 2014 to provide what the company calls ‘the most complete distribution of Kafka’ and, like many platform providers of this ilk, earn clients through management and facilitating ease of use. Indeed, the founders of Confluent – Kreps, Neha Narkhede and Jun Rao – were part of the LinkedIn team which originally developed Kafka.

Over the past couple of months, however, interest around the positioning of Kafka – and Confluent – has intensified. During the most recent re:Invent in November, Amazon Web Services (AWS) launched Amazon Managed Streaming for Kafka in public preview.

Confluent responded two weeks later by announcing license changes for components of its platform. Users could still download, modify and redistribute the code, but not – looking closely at the big cloud vendors – use it to build software as a service.

As Kreps put it at the time: “The major cloud providers all differ in how they approach open source. Some of these companies partner with the open source companies that offer hosted versions of their system as a service. Others take the open source code, bake it into the cloud offering and put all their own investments into differentiated proprietary offerings.

“The point is not to moralise about this behaviour; these companies are simply following their commercial interests and acting within the bounds of what the license of the software allows,” Kreps added. “But we think the right way to build fundamental infrastructure layers is with open code. As workloads move to the cloud we need a mechanism for preserving that freedom while also enabling a cycle of investment, and this is our motivation for the licensing change.”

Confluent is not the only company to have gone down this route. MongoDB altered its conditions last year, as did Redis Labs. Perhaps unsurprisingly, in the case of Redis Labs, pre-license change code was forked under a project titled GoodFORM – ‘free and open Redis modules.’

The way Confluent has gone about its license change will presumably prevent any dissention from the open source community on the level of Redis et al. Yet many outlets and analysts have remarked how 2019 will be a vital year for open source development as the continued rise of cloud takes hold. This publication speculated as such following the news of IBM acquiring Red Hat, with the hyperscalers ‘holding all the cards.’

Regardless, the funding is certainly an affirmation of what Confluent is doing. Kreps said the move built upon a ‘truly fantastic’ 2018, with subscription bookings growing 3.5x year on year, and outlined future possibilities.

“Across virtually every industry, businesses are realising that in the world we are entering, every company is a software company,” wrote Kreps. “In order to compete in this new world, modern businesses need to take their own software architecture seriously.

“We think the architecture for these modern companies centres around streams of events that they can combine seamlessly with their stored data to create intelligent, real-time applications that serve customers, analyse operations, and react continuously to the ever-evolving state of the business and world,” Kreps added.

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Transitioning to the cloud is not so much taking a fresh plot of land and building up from there, but more trying to renovate an existing property. For larger organisations with sprawling IT outfits, it can be particularly complicated even once the bulk of the work has been done, with on-premise systems here, public cloud workloads there, and private cloud in between.

What’s more, organisations are realising that one size may not fit all just for cloud, but for public cloud. Take Netflix as a key example. Industry media tried to storm up a brouhaha last year when it was reported the streaming company, famously an Amazon Web Services (AWS) house, was using Google Cloud for certain workloads. Yet Netflix told this publication at the time there was ‘no change’ in its relationship with AWS and that it had been using Google for ‘a while’.

Rather than any great revelation, the Netflix story simply emphasised the IT needs of fast-paced organisations today. But as cloud complexity gets more important, so does the need to secure and monitor it.

Cloud management platforms (CMPs) are therefore becoming a very hot property in the industry. Like any technology subset, it can take time before industry validation. Gartner, which defines a CMP simply as ‘integrated products that provide for the management of public, private and hybrid cloud environments’, recently released its first Magic Quadrant in the area.

“What it’s telling IT organisations is that cloud management platforms have come of age, and here are the key players in that space,” explains Dan Murphy, CMO of Embotics, which is placed as a leader in the Quadrant. “For Embotics, and in particular our vCommander solution and cloud management in general, it means we are now essential technology, something that every large IT organisation needs – especially those that are adopting hybrid IT.”

It may be prudent here to explore just what an entangled enterprise IT stack looks like. Their infrastructure is likely to be a mix of on-premise and cloud. They may have had the vision of a connected Internet of Things (IoT) setup a decade ago – but back then it was all managed in the data centre, before moving to virtualised environments until the toes were dipped into the cloud.

Cloud management platforms are now essential technology, something that every large IT organisation needs – especially those that are adopting hybrid IT

In other words, it’s a mess – and a good CMP is able to manage everything along simultaneously while still providing value added services to end users. “Enterprises have set objectives to embrace public cloud services and lower costs. The IT department’s role is changing in this model to provide governance and enablement across hybrid IT,” said Murphy. “Many organisations believe public cloud is strategic, but they’ve also got a legacy infrastructure of on-premise applications to manage.”

As a result, CMPs have to be equipped with a variety of features, from provisioning and orchestration, to cost management, to cloud migration and backup. Murphy says many IT organisations end up serving as a ‘broker’. “Using an analogy of leasing a company car, instead of saying an employee can select any car, we’re saying ‘go to this dealer, and you can choose any car under this budget and with this safety rating,’” he explains. “That’s what we see an evolving role to be – ‘these are resources that have been curated by IT, and the organisation in general and here’s what you can choose from’, versus giving people the keys to the castle or in this case unrestricted and ungoverned access to the public cloud.”

This mentality has ensured that the conversation is changing not just between lines of business and IT, but within IT itself. From having dedicated security, networking and VMware experts, IT has become more of an enabling group which aims to give as frictionless access as possible to the technology – bearing in mind employees simply want the tools to do their job properly – but to also provide governance. This is again where CMPs can come into play; being tools which can help IT in this new, fleshed-out role.

Ultimately, the Gartner Magic Quadrant for Cloud Management Platforms gives an optimistic view of the landscape and where these companies sit. Yet there is naturally also a word of caution. Increasingly, it feels as though that AWS, Microsoft Azure and Google hold all the aces, and wherever they go, others follow. Murphy argues that in these areas – keeping up with R&D, and exploring concepts such as serverless computing – some vendors will fall away. “Embotics has always been at the forefront of innovation and we are committed to providing a management platform that enhances hybrid IT operations now and as new technologies emerge,” he adds.

Editor’s note: This article is in association with Embotics.

The collaboration software market continues to go up, with cloud-based collaboration growing more quickly and ‘strong’ growth expected for at least the next five years.

That’s the verdict of analyst firm Synergy Research in its latest note which argues cloud collaboration continues to ‘drive and disrupt’ the $45 billion-rated overall collaboration market.

Total worldwide third quarter revenues from collaboration, including on-premise, hosted and cloud-based solutions, hit almost $11 billion, with Synergy expecting Q4’s total to be ‘substantially higher.’

The research focused on the unified comms (UC) market – an area which only accounts for one tenth of the overall collaboration space but one with continued clear potential for growth. Of the different buckets which comprise UC, teamwork applications are considered by far the quickest growing. Synergy noted Slack as a ‘particularly noteworthy’ company as it more than doubled in size year on year.

This can be compared with Synergy’s figures released at the start of the year which priced the total cloud market at $250 billion, with 32% annual growth. Unified comms as a service (UCaaS) saw a 20% uptick, with RingCentral, Mitel, and 8×8 cited as key vendors. Perhaps surprisingly given its saturation, IaaS and PaaS continued to be the strongest growing area at 50%. Previous years saw its growth at more than 100%, but given the size of the market and the ‘law of large numbers’, as Synergy put it, this was not seen as a major surprise.

“Collaboration continues to be a somewhat fragmented market with many disruptive and high-growth companies targeting specific technology areas. That being said, the overall trend is quite clear in that traditional on-premise sales are shrinking and being replaced by cloud-based communication services,” said Jeremy Duke, founder and chief analyst at Synergy.

“There is now wide adoption of these new emerging cloud services and our forecasts show that they will continue to grow strongly over the next five years,” added Duke.

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