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AWS, Microsoft and Google surge in cloud as channel role increases

16 May 2017

The battle between cloud service providers is heating up, with the reseller channel now an increasing focus for the top cloud players – and likely to ultimately determine vendor success, says Canalys.

The technology market analyst firm estimates the worldwide cloud infrastructure services market hit US$11.b billion in the first quarter of 2017 – a 42% on the same period last year.

While Amazon’s AWS continues to dominate, holding steady at 31% share of the global market thanks to its 43% growth, its strongest hyperscale rivals are on stronger growth trajectories, with Microsoft up 93% year on year, and Google up 74%.

IBM, which holds fourth spot in the market, was up 38%.

Daniel Liu, Canalys research analyst, says competition for enterprise customers is intensifying, with leading cloud service providers investing heavily to secure key national and global accounts.

“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,” Liu says.

But a new battle is starting to play out, with the cloud providers looking to the channel to expand their reach, especially into mid-market opportunities, with the channel ‘integral’ to winning in the enterprise according to Jordan De Leon, Canalys senior analyst.

Recent times have seen top cloud players working to expand their channel, with AWS establishing a channel program and Google revamping its partner program.

“[Google] has made progress toward meeting the technology and feature requirements of large enterprise customers,” De Leon says. “But to rival the others, it needs to demonstrate its enterprise readiness and enhance its credibility.

“To achieve this, it needs to sustain investment in both technology and go-to-market and continue to highlight key customer wins,” he says.

Canalys says Microsoft’s growth is being bolstered by having a ‘huge’ enterprise 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,” Canalys says.

“Go-to-market strategy, including both customer and channel partner engagement, will ultimately determine vendor success in this segment,” De Leon says.

“Larger enterprises will adopt a multicloud strategy to distribute risk. Ultimately to challenge AWS, vendors will need deep financial resources to continue to participate and advance.”

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