Skip to main content

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.

Popular posts from this blog

Digital Transformation Spending Reaches $1.8 Trillion

Ongoing investment in business technology will remain on track, despite concerns about the global economic outlook which continues to evolve in 2022. Enterprise CIOs and CTOs are focused on operational profitability and digital business growth goals that are enabled by strategic IT initiatives. Global spending on the Digital Transformation (DX) of business practices, products, and organizations is forecast to reach $1.8 trillion in 2022 -- that's an increase of 17.6 percent over 2021, according to the latest market study by International Data Corporation (IDC). Many anticipated DX investments will sustain this pace of growth throughout the 2021-2025 forecast period, with a five-year compound annual growth rate (CAGR) of 16.6 percent. Digital Transformation Global Market Development "IDC expects to see aggressive DX technology investment growth in 2022 following a minor slowdown during the pandemic period," said Craig Simpson, senior research manager at IDC . "As orga

Flexible Working: Why Company Culture Matters

The main reasons for the Great Resignation are obsolete leadership, fearful middle managers, and a toxic culture that hinders employee engagement. Perhaps that's why some organizations are still struggling with the consideration and development of a flexible working model.  They're incapable of evolving to a more enlightened approach to work where employees are treated with respect. They're stuck in a bygone era of the 20th-century industrial revolution where 'shareholder value' tops all other values, and where spreadsheets and financial data analysis drives all key decision making. We should not be surprised that 76 percent of human resource (HR) leaders now feel that hybrid work challenges an employee's connection to organizational culture, according to a recent survey by Gartner. A 2022 poll of HR leaders reveals the most challenging aspect of setting their hybrid strategy is adjusting the current organizational culture to support a hybrid workforce. In fact,

Energy Sector IoT Cybersecurity Gains Momentum

The electric distribution industry continues to invest in digital transformation projects. Advanced Metering Infrastructure (AMI) technology is becoming a driver for connected electricity meters, which will reach an installed base of 1.3 billion by 2027. AMI growth is prompting utilities and energy suppliers to revisit their IT infrastructure security and device management operations, according to the latest worldwide market study by ABI Research. Energy Infrastructure Security Market Development Digitization of traditional electricity grids and the modernization of the aging energy infrastructure is among the top concerns for utility operators and governments worldwide. Security for last-mile energy consumption applications was frequently overlooked. "However, the introduction of AMI, smart metering, and grid digitization is steadily increasing spending for secure management services, assisting implementers to transition to IT (information technologies) and OT (operational techno