Cloud computing services continue to grow, as more organizations discover the benefits of hybrid cloud solutions. The worldwide cloud infrastructure services market grew significantly in the first quarter of 2017, up by 42 percent year-on-year to reach $11.4 billion, according to the latest market study by Canalys.
Once again, Amazon AWS maintained its dominance in the sector, holding a stable global market share of 31 percent. It was followed by its strongest hyperscale rivals - Microsoft, Google and IBM.
Microsoft grew 93 percent and Google was up 74 percent compared to the same quarter a year ago. These growth rates were faster than those of AWS and IBM, which grew 43 percent and 38 percent respectively.
Public Cloud Service Market Development
"Competition for enterprise customers is intensifying among leading cloud service providers, which are investing heavily to secure key national and global accounts," said Daniel Liu, research analyst at Canalys.
Timing is crucial, as many large accounts are assessing, formulating and executing strategies to move existing workloads and infrastructure to the cloud, and develop new types of workloads as part of digital transformation initiatives.
Cloud players are therefore looking to the channel to expand their reach, especially into mid-market opportunities. According to the Canalys assessment, the business partner channel has become integral to winning in the enterprise, with top cloud players focusing on channel expansion plans.
AWS has an established channel program that is growing and is cited by the company as helping to win key global clients. Microsoft’s growth in Q1 2017 demonstrates the benefit of having a huge enterprise client base and converting it to Azure.
Many of the leading enterprise vendors are building on Azure Stack, Microsoft’s latest cloud initiative, to provide customers with hybrid solutions.
Third-placed Google has revamped its partner program as it strives to catch up. It has made progress toward meeting the technology and feature requirements of large enterprise customers. But to rival the others public cloud leaders, it needs to demonstrate its enterprise readiness.
Outlook for Multi-Cloud Environments
Moreover, to achieve this potential upside, Google will need to sustain investment in both technology and go-to-market capabilities, and continue to highlight key customer wins in 2017 and beyond.
Go-to-market strategy -- including both customer and channel partner engagement -- will ultimately determine vendor success in this segment. Larger enterprises will adopt a multi-cloud strategy to distribute risk. In order to challenge AWS, Canalys believes that other cloud vendors will need deep financial resources to continue to participate and advance in this highly competitive market.