Video: More enterprise are going all-in with select cloud providers
Spending on public cloud computing services will grow by nearly a quarter this year, but more of that spending is going to a small number of vendors.
Worldwide spending on public cloud services will grow 21.4 percent this year to $186.4bn, up from $153.5bn in 2017, according to analyst firm Gartner.
Gartner said the fastest-growing segment of the market is cloud infrastructure as a service (IaaS), which it forecasts to grow 35.9 percent in 2018 to reach $40.8bn. The analyst firm said it expects the top 10 providers to account for nearly 70 percent of the IaaS market by 2021, up from 50 percent in 2016.
These rise of these so-called 'hyperscale' IaaS providers, like Amazon Web Services (AWS), Google, and Microsoft creates "enormous opportunities and challenges" for customer and other vendors, said Sid Nag, research director at Gartner.
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"While it enables efficiencies and cost benefits, organisations need to be cautious about IaaS providers potentially gaining unchecked influence over customers and the market," he said.
One opportunity of going all-in with one big cloud provider is that can be easier and (at least initially) cheaper to pick just one vendor (as ZDNet's Larry Dignan points out, this is the same model that many CIOs chose during the era of big enterprise software deployments).
But one challenge that could be looming is the issue of cloud lock-in: once companies have moved their applications and data onto one cloud platform, it's complicated and expensive for them to move away again.
Gartner said this will lead customers to demand easier ways to shift their apps and data between clouds, but whether they will get them is another matter.
"In response to multicloud adoption trends, organisations will increasingly demand a simpler way to move workloads, applications and data across cloud providers' IaaS offerings without penalties," said Nag.
According to Gartner, software as a service (SaaS) remains the largest element of cloud spending, with revenue expected to grow 22.2 percent to reach $73.6bn in 2018. Gartner expects SaaS to reach 45 percent of total application software spending by 2021, as it becomes the preferred delivery model for applications.
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Within the platform as a service (PaaS) category, the fastest-growing segment is database platform as a service (dbPaaS), expected to reach almost $10bn by 2021. Hyperscale cloud providers are increasing the range of services they offer to include dbPaaS.
Cloud spending is growing faster than the analyst firm previously forecast, but Gartner still expects growth rates to steady from this year on as cloud becomes a mainstream part of the wider IT spending mix.
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