Agriculture's Digital Transformation Enabled by IoT Apps

The global agricultural sector is currently evolving, as applications for the Internet of Things (IoT) technology disrupts more traditional methods of farming. With use cases that target several different segments of the market already available, new solutions are being created to evolve more segments.

The fact that there is no single, specific problem experienced by all farmers and ranchers has led to the development of a variety of different solutions, notably including water usage concerns from the government and projected population growth over the next three decades.

Agriculture IoT Market Development

By 2024, over 2 million farms and 36 million cattle will be connected, according to the latest worldwide market study by ABI Research. There's a significant upside opportunity for IoT apps within the agricultural market -- specifically connected agriculture in field crops, tree crops, and livestock.

For field and tree crops, the primary driver for the introduction of connectivity and the IoT is not only to irrigate sufficiently but also to limit excess water application for usage efficiency and to align with government regulation.

For livestock, it is about collecting data relating to the health of the animals, including birthing activities, as well as knowledge of their whereabouts.

Across all agriculture sectors, the benefits are improved yields, a higher quality product, and greater insight for farmers to more efficiently manage their operations.

Hi-tech systems involving drones can help to enable future farming methods, but a drone’s primary function is to provide high-level aerial imagery, including strategic analysis of large areas of farmland. While this is useful, it is time-consuming and can lack granular information.

"Ground-based sensor-based systems are more insightful and cost-effective for focusing solely on monitoring soil under crops and animal behavior. This is exactly the information farmers need to map out their plan of action to secure the optimum yield," said Harriet Sumnall, research analyst at ABI Research.

The technologies that will power IoT in connected agriculture will heavily rely on gateways and low-power wide area products. LoRa is increasing finding preference in supplier solutions, particularly for sensor-to-node connections.

The cost of connected agriculture system depends upon the number of sensors, with vendor pricing strategies ranging from a single upfront fee and an inclusive subscription to a data management platform (as with Sensoterra), to a zero upfront cost but a data subscription-only model (as with CropX). The former may be preferable for large farms, and the latter better for smaller ones.

Outlook for Connected Agriculture Applications Growth

The reasons for adopting IoT in agriculture are universal – cost reduction, improved productivity, and better profit margins – but the specific prompts in terms of readiness to adopt new applications can be more pragmatic and localized.

For example, in North America, the political climate is proving challenging for the immigrant workforce required by the agricultural sector, and more automation could make up for this lack of manual labor. And, in Europe, farmers are notably younger than elsewhere in the world and are more naturally receptive to adopting new technologies.

"In general, however, there is a lack of education among farmers about the benefits of connected agriculture. This is a vital issue that IT vendors must continue to be active in remedying if Agricultural IoT is to succeed,” Sumnall concluded.

Digital Payments Reach $6.7 Trillion in B2B Transactions

Globalization has removed several barriers for companies to conduct business abroad. However, exposure to foreign exchanges remains a challenge. The fees involved in international money transactions can make the process onerous, particularly to small organizations that lack financial expertise.

Meanwhile, incumbent banks have typically been resistant to re-invest in new technologies within the business-to-business (B2B) payment sector. However, they now face new competition from non-bank start-ups that offer less-expensive services by using automated processes, reducing the need for intermediaries.

Digital Payments Market Development

According to the latest worldwide market study by Juniper Research, B2B transactions processed by pureplay digital payment operators will reach $14 trillion by 2023 -- that's up from $6.7 trillion in 2018.

Juniper analysts found that traditional banks can struggle to quantify a return-on-investment from the implementation of digital technologies to replace or augment their existing methods. As a result, they are heavily reliant on manual processes and legacy IT suppliers.

Conversely, new entrants -- such as Modulr and Soldo -- have entered the digital payments space without the burden of legacy systems. They use innovative real-time payments technology that integrates with their customer's accounting software, thereby reducing the costs involved.

In their latest research, Juniper assessed 15 vendors; comparing the relative level of their capabilities and offerings in the digital payments sector. According to Juniper, the five leading vendors include ACI Universal Payments, FIS, VocaLink Mastercard,  Fiserv and Finastra.

First-ranked ACI Universal Payments recently acquired SpeedPay, a U.S. bill payments company, from Western Union and post-integration will augment its portfolio with financial payments direct to customers.

The research found that established financial services firms are already seeking ways to redress the balance through remedial measures -- citing the ongoing implementation of SWIFT gpi, a new standard for cross-border payments, as a key innovation.

Outlook for Digital Payments Application Growth

Juniper also concluded that in the medium term, measures such as SWIFT gpi Link, which is currently at the proof of concept stage, will reduce systemic inefficiencies and improve eCommerce transparency by using blockchain platforms to initiate and complete online transactions.

According to the Juniper assessment, banks are increasingly likely to introduce digital currencies, equivalent in value to, and redeemable in, fiat currencies, to accelerate the processes.

Big Data Analytics Revenue will Reach $274.3 Billion

Actionable insights from data help to fuel the Global Networked Economy, which drives demand for new technologies. Revenues for big data and business analytics (BDA) solutions are forecast to reach $189.1 billion in 2019 -- that's an increase of 12 percent over 2018.

According to the latest worldwide market study by International Data Corporation (IDC), BDA revenues will maintain this pace of growth throughout the 2018-2022 forecast period, with a five-year compound annual growth rate (CAGR) of 13.2 percent.

By 2022, IDC expects worldwide BDA revenue will be $274.3 billion.

Big Data Analytics Market Development

"Digital transformation is a key driver of BDA spending with executive-level initiatives resulting in deep assessments of current business practices and demands for better, faster, and more comprehensive access to data and related analytics and insights," said Dan Vesset, group vice president at IDC.

IT services will be the largest category of the BDA market in 2019 ($77.5 billion), followed by hardware purchases ($23.7 billion), and business services ($20.7 billion). Together, IT and business services will account for more than half of all BDA revenues throughout the forecast and will be among the categories with the fastest growth.

BDA-related software revenues will be $67.2 billion in 2019, with end-user query, reporting, and analysis tools ($13.6 billion) and relational data warehouse management tools ($12.1 billion) being the two largest software categories.

According to the IDC assessment, The BDA technology categories that will see the fastest revenue growth will be non-relational analytic data stores (34 percent CAGR) and cognitive or AI software platforms (31.4 percent CAGR).

In terms of deployment, more than 70 percent of BDA software revenues in 2019 will go toward on-premises solutions. However, revenue for BDA software delivered via the public cloud will experience strong growth over the five-year forecast (32.3 percent CAGR) and will represent more than 44 percent of the total BDA software opportunity in 2022.

The industries currently making the largest investments in big data and business analytics solutions are banking, discrete manufacturing, professional services, process manufacturing, and federal or central government.

Combined, these five industries will account for nearly half ($91.4 billion) of worldwide BDA revenues this year. The industries that will deliver the fastest BDA growth are securities and investment services (15.3 percent CAGR) and retail (15.2 percent CAGR). Retail's strong growth will enable it to move ahead of the federal or central government as the fifth largest industry in 2022.

Outlook for Big Data Analytics Applications Growth

On a geographic basis, the United States will be the largest country market by a wide margin with nearly $100 billion in BDA revenues this year. Japan and the UK will generate revenues of $9.6 billion and $9.2 billion respectively this year, followed by China ($8.6 billion) and Germany ($7.9 billion).

The fastest growth in the BDA market will be in Argentina and Vietnam with five-year CAGRs of 23.1 percent and 19.4 percent, respectively. China will have the third fastest growth rate with a 19.2 percent CAGR, which will enable it to become the second largest country for BDA revenues in 2022.

From a company size perspective, very large businesses will be responsible for nearly two-thirds of all BDA revenues throughout the forecast. Small and medium businesses will also be a significant contributor to BDA revenues, with nearly a quarter of the worldwide revenues coming from companies with fewer than 500 employees.

Why Legacy IT Vendors Seek 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 marginalize the remaining applications for on-premises data centers.

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 organizations. 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 organizations 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.

"Organizations 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 organizations, 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 optimization of an organization’s IT infrastructure and operations. This vendor coexistence model is the multi-cloud market reality.

Connected Wearables Shipment will Reach 239 Million

Wearable technology adoption has reached a turning point in developed markets across the globe. Berg Insight released its latest findings of the connected wearables market. Shipments of connected wearables reached 116.8 million worldwide in 2018.

Growing at a compound annual growth rate (CAGR) of 15.4 percent, total shipments of smartwatches, smart glasses, fitness & activity trackers, smart clothing, mobile telecare and medical devices as well as other wearable devices are forecasted to reach 238.5 million units in 2023.

Wearable Device Market Development

Bluetooth will remain the primary connectivity option in the coming years. A total of 67.7 million of the wearables sold in 2023 are forecast to incorporate embedded cellular connectivity, mainly in the smartwatch and telecare or medical device categories.

The connected fitness & activity tracker segment is led by Chinese Xiaomi, which has been successful with its Mi Band fitness tracker. Fitbit is still among the largest vendors in the segment, along with Huawei and Garmin.

Berg Insight now estimates that shipments in the segment reached 65 million units in 2018. This product category is now facing fierce competition from smartwatches that in most cases include activity tracking features.

Apple entered the connected wearables market in Q2-2015 and quickly became the leading smartwatch vendor. In 2018, Apple accounted for almost half of the total 45.5 million smartwatches sold during the year.

"Apple continues to hold a firm grip on the smartwatch market and is at the forefront of innovation in the industry," said Martin Bäckman, industry analyst at Berg Insight.

The competition has responded with increasingly capable and attractive devices from Wear OS vendors including Fossil, LG and Huawei, as well as from consumer electronics vendors betting on other platforms such as Fitbit and Samsung.

The smartwatch segment is expected to surpass fitness & activity trackers to become the largest device category within wearable technology, in terms of shipments, in 2021.

"Technology advancements, increased consumer awareness and wide availability of devices in different price segments will enable smartwatches to reach shipments of 117.7 million units in 2023," concludes Bäckman.

Sales of smart glasses and head-mounted displays have so far been modest, but promising use cases in professional markets as well as in niche consumer markets will enable it to become a sizeable connected wearable device category in the next five years.

A number of vendors including Daqri, ODG, Epson, Google, Microsoft, Kopin and Vuzix are active in the segment. Standalone VR headsets from companies such as Oculus and HTC aimed for the consumer market are gaining traction and accounted for a large share of the total 1.5 million devices shipped in the segment during 2018.

Outlook for Wearable Device Application Growth

Berg Insight forecasts that shipments of smart glasses and head-mounted displays will reach 11.9 million units by 2023. Annual shipments of medical devices and mobile telecare/mPERS devices are forecasted to grow from 1.8 million devices in 2018 to 6.9 million devices in 2023. The segment includes wearables such as cardiac rhythm management devices, ECG monitors and mobile telecare devices.

Finally, annual shipments of wearables not covered by the above product categories -- such as authentication and gestures devices, smart rings, wrist-worn computers and scanners, smart jewelry and connected prosthetics -- are predicted to grow from 3 million units in 2018 to reach 13.0 million units in 2023.

Why Savvy Retailers Adopted Artificial Intelligence

The emergence of online shopping created a significant disruption for traditional retailers. Some have met this challenge by attempting to offer a compelling omnichannel experience, where the physical retail and online channels merge through the use of solutions that benefit busy shoppers.

While this approach has improved the overall customer experience, more retailers must embrace a digital transformation agenda. They can further adapt their business models in the face of forward-thinking competition. And, that's now driving the momentum to leverage Artificial Intelligence (AI).

Retail AI Market Development

According to the latest worldwide market study by Juniper Research, global spending by retailers on AI services will reach $12 billion by 2023 -- that's up from an estimated $3.6 billion in 2019. Juniper expects over 325,000 retailers to adopt AI technology over the forecast period.

According to the study findings, AI use by retailers will unlock efficiencies across back-office operations. Advanced analytics employed in functions, such as demand forecasting and automated marketing, will make retailers more agile and improve profit margins.

Juniper forecasts that retailers will face an AI adoption race, where AI-equipped retailers -- which have adopted systems as early movers -- will displace slower moving retailers, by offering superior service at optimized price points.

Furthermore, the use of machine learning in demand forecasting will prove to be a key market for AI vendors, with associated service revenues reaching $3 billion by 2023 -- that's up from $760 million in 2019.

The analyst claimed that demand forecasting will be essential to enable an effective omnichannel experience and drive higher margins. This will mean the number of retailers using AI-enabled demand forecasting will more than triple between 2019 and 2023.

"With the rise of collect-in-store and one-off events such as Black Friday, understanding demand and supply chains are more crucial than ever with AI playing the central role," said Nick Maynard, senior analyst at Juniper Research.

Outlook for Retailer AI Application Growth

The research also found that smart checkout applications, powered by AI technologies such as computer vision, will have a role in the convenience area -- leading to annual transaction volumes of over 1.4 billion by 2023, compared with just 42 million in 2019.

While Amazon is currently highly visible with its 'Go' in-store retail model, China is forecast to be the primary driver of future growth. This prediction reflects the rapidly advancing Chinese market, as well as the backlash Amazon has had recently due to its cashless payments model.

Private Cloud Computing Deployment Growth will Surge

According to the latest worldwide market study by International Data Corporation (IDC), vendor revenue from sales of IT infrastructure products for cloud computing environments -- including public and private cloud -- grew 28 percent year-over-year in the fourth quarter of 2018 (4Q18), reaching $16.8 billion.

For 2018, annual spending on public and private cloud IT infrastructure totaled $66.1 billion, slightly higher (1.3 percent) than forecast in Q3 2018. IDC also raised its forecast for total spending on cloud IT infrastructure in 2019 to $70.1 billion – that's up 4.5 percent from last quarter's forecast – with year-over-year growth of 6 percent.

Cloud IT Infrastructure Market Development

That said, quarterly spending on public cloud IT infrastructure was down 6.9 percent in Q418 compared to the previous quarter but it still almost doubled in the past two years reaching $11.9 billion in 4Q18 and growing 33 percent year-over-year, while spending on private cloud infrastructure grew 19.6 percent reaching $5.75 billion.

Since 2013, when IDC started tracking IT infrastructure deployments in different environments, public cloud has represented the majority of spending on cloud IT infrastructure and in 2018 – as IDC expected – this share peaked at 69.6 percent with spending on public cloud infrastructure growing at an annual rate of 50.2 percent. Spending on private cloud grew 24.8 percent year-over-year in 2018.

In 4Q18, quarterly vendor revenues from IT infrastructure product sales into cloud environments fell and once again were lower than revenues from sales into traditional IT environments, accounting for 48.3 percent of the total worldwide IT infrastructure vendor revenues, up from 42.4 percent a year ago but down from 50.9 percent last quarter.

For the full year 2018, spending on cloud IT infrastructure remained just below the 50 percent mark at 48.4 percent. However, spending on all three technology segments in cloud IT environments is forecast to deliver slower growth in 2019 than in previous years.

Ethernet switches will be the fastest growing at 23.8 percent, while spending on storage platforms will grow 9.1 percent. Spending on compute platforms will stay at $35 billion but still slightly higher than expected in IDC's previous forecast.

The rate of annual growth for the traditional (non-cloud) IT infrastructure segment slowed down from 3Q18 to below 1 percent but the segment grew 11.1 percent quarter-over-quarter. For the full year, worldwide spending on traditional non-cloud IT infrastructure grew by 12.2 percent, exactly as forecast, as the market has started going through a technology refresh cycle, which will wind down by 2019.

By 2023, IDC expects that traditional non-cloud IT infrastructure will only represent 40.5 percent of total worldwide IT infrastructure spending -- that's down from 51.6 percent in 2018. Note, this share loss and the growing share of cloud environments in overall spending on IT infrastructure is common across all regions.

"The unprecedented growth of the infrastructure systems market in 2018 was shared across both cloud and non-cloud segments," said Kuba Stolarski, research director at IDC. With new on-premises public cloud stacks entering the picture, there is a distinct possibility of a significant surge in private cloud deployments over the next five years."

Outlook for Global Cloud IT Infrastructure Growth

All regions grew their cloud IT Infrastructure revenues by double digits in 4Q18. Revenue growth was the fastest in Canada at 67.2 percent year-over-year, with China growing at a rate of 54.4 percent.

Other regions among the fastest growing in 4Q18 included Western Europe (39.7 percent), Latin America (37.9 percent), Japan (34.9 percent), Central & Eastern Europe and Middle East & Africa (30.9 percent and 30.2 percent, respectively), Asia-Pacific excluding Japan (28.5 percent), and the United States (15.5 percent).

Long-term, IDC expects spending on cloud IT infrastructure to grow at a five-year compound annual growth rate (CAGR) of 10.9 percent, reaching $99.9 billion in 2023 and accounting for 59.5 percent of total IT infrastructure spend. Public cloud data centers will account for 68.3 percent of this amount, growing at a 10.4 percent CAGR. Spending on private cloud infrastructure will grow at a CAGR of 12 percent.

Digital Twin App Revenue will Reach $13B by 2023

A Digital Twin is a virtual representation of a connected physical product, process or service across its whole lifecycle. The virtual replica uses operational real-time data to enable the detection of issues and advance learning. It's also used in simulation scenarios for the physical model counterpart.

Digital business enablers, such as big data, machine learning, artificial intelligence, software analytics and cloud solutions, as well as the growing demand for sensors to capture and process data, have been significant drivers for the adoption of Digital Twin applications.

Digital Twin Market Development

According to the latest worldwide market study by Juniper Research, revenues from Digital Twin applications will reach $13 billion by 2023. Recent market growth is estimated at $9.8 billion in 2019 -- with an average annual growth rate of 35 percent during the forecast period.

The research found that increased deployments of advanced sensors to capture data, and technological advances such as machine learning, artificial intelligence and high-performance computing are expanding the advantages of using Digital Twins.

Juniper ranked the companies within the market and identified those that have supported their Digital Twin offerings by combining in-house Industrial IoT expertise and close collaboration with other market participants. The leading Digital Twin suppliers include General Electric, Siemens, IBM, PTC, Microsoft and Bosch.

Juniper analysts also found that advanced Digital Twin operations will help human workers to focus on maximizing productivity in areas that the technology cannot address, such as customer service.

The new research forecasts that Digital Twin revenues from manufacturing will reach an estimated $4.5 billion in 2023 -- that's up from $1.4 billion in 2019. Manufacturing, as the fastest growing sector, will account for over 34 percent of the total Digital Twin revenue in 2023.

Outlook for Digital Twin Application Growth

Two other sectors leading growth in net incremental Digital Twin application revenues over the forecast period are Transportation by $2.5 billion, plus Energy and Utilities by $1.1 billion.

"In future, we will see numerous trials combining IoT, Digital Twin and AI to justify time and investment in deploying the technology within and between enterprises. This holds true for multi-location operating industries such as supply chain," said Elson Sutanto, principal analyst at Juniper Research.

Augmented Analytics Turns 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 utilize 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, analyze data, and create customized reports and visualizations.
• Leveraging a data monetization 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.

Why Channel Partners Drive 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 percent year-on-year -- increasing its share of the total market from 6 percent in 2017 to 8 percent in 2018.

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

Hyperscale Cloud Market Development

Canalys reports that hyperscale cloud infrastructure services are in a period of sustained growth, with spending up 46 percent 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 percent 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 percent ($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 percent 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 percent, 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 percent 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 percent of respondents think there is huge potential to working with Google Cloud, while 22 percent 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 percent 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.