Spend on cloud infrastructure services reach $26.3bn

07 August 2019 | Natalie Bannerman

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Cloud infrastructure services spend grew by 37.6% year-on-year in Q2 of 2019, totalling $26.3 billion.

According to the latest research from Canalys’ Cloud Channels Analysis service, the same cloud service providers leading the market remain unchanged. Amazon Web Services (AWS) is still domination, growing its market share by 36.1% resulting in revenues of $8.3 billion and a market share of 31.5%.

Microsoft Azure is in second place growing by 63.6% to just under $5 billion in revenue increasing its marketing share to 18.1%. While Google Cloud now holds approximately 9.5% of the market, followed by Alibaba Cloud with 4.6%.

“In 2019, the battle for cloud migrations is set to intensify between the major cloud providers,” said Alastair Edwards, Canalys chief analyst. “The cloud providers’ channel strategies are increasingly important for tactical advantage and growth, particularly as more customers adopt multi-cloud.”

As part of the report, Microsoft said that the migration of Azure is one of its top strategic priorities as well as a number of Azure incentives, with a focus on partner-managed services, marketplaces and consumption. Conversely, AWS is focusing on Windows workload migration while at the same time recruiting new global partners, implementing partner initiatives aimed at ISVs and MSPs helping to convert Windows workloads to AWS.

 

“Microsoft remains the leader in the cloud channel, backed by its established Cloud Solution Provider programme,” continued Edwards. “But recent missteps, including having to reverse unpopular changes to partner benefits, show the challenges Microsoft faces to balance cloud growth with the increased costs of serving partners. Cloud rivals that are not weighed down by legacy partner structures have an opportunity to exploit these challenges as they focus on partner recruitment.”

Additionally, Google Cloud launched its Partner Advantage programme in July as it prepares for a global channel drive to drive Google Cloud Platform growth among enterprises across six key verticals: finance, public sector, retail, healthcare, manufacturing, and media and entertainment. At the same time, IBM has the opportunity to reinvent its cloud business after completing the acquisition of Red Hat in July 2019. The acquisition will strengthen the company’s position to both partner and enterprise customers as they adopt hybrid IT models.

“Businesses are turning to partners to help them define the right clouds for different workloads, to manage and secure their complex multi-cloud environments, as well as overcome the challenges of cloud governance, cost control, compliance and integration,” added Daniel Liu, Canalys research analyst. “Without comprehensive commitments to the channel, vendors will be unable to maintain their current rapid growth rates.”