A Morgan Stanley report predicts Amazon Web Services will reach $24 billion in annual revenue within the next decade, and will be the defacto IT shop for... everybody.
In a post at Barron's, Tiernan Ray shares some details of the report, which predicts that between 3% and 17% of traditional IT spending could be going to AWS by then. In total, the report's authors see the enterprise cloud space as a $152-billion market by then.
The Morgan Stanley reports make the following predictions:
On-premises server growth will slow because of the cloud. (Inevitable, yes. But cloud providers themselves still need to buy servers. Morgan Stanley predicts 20% growth in servers for this sector.)
Private clouds will also eventually be migrated to AWS, creating "headwinds" for the virtualization market.
Storm clouds on the horizon for IT outsourcing as the cloud model gains traction. (Outsourcers are recognizing this, and getting into the cloud game themselves. IT outsourcing may actually grow, but will grow as smaller cloud service engagements, versus big data center management deals.)
The AWS model is extremely compelling. I'm aware of a company that was able to launch its business with a monthly IT bill of $80, covering a range of processing and storage services. That's huge.
But anyone that's been following the IT space long enough is familiar with the never-ending string of predictions of one company or one technology type taking over the world.
IBM ruled the IT world in the 1960s and 70s, selling mainframes into most of the digitized world at that time. It was accused of being a monopoly.
Then the paradigm shifted away from back-end computers and terminals and toward PCs back in the 1980s and 90s, many vendors rode the wave, but a single company, Microsoft, ruled the PC realm -- to the point where it was being accused if being a monopoly. But the ground keeps constantly shifting beneath the technology world, and whatever "monopoly" Microsoft had during this run has been draining away into the cloud and mobile space. In recent years, Apple eclipsed Microsoft, with hegemony over the mobile space. But that is being encroached upon by Android-enabled players (Microsoft itself isn't going down without a fight here, either.)
And IBM remains a giant in the game, with a lot of cloud centers, programs and capabilities it is extending to its huge enterprise base.
And, oh, by the way, there's also Google, which also has its eye on the enterprise cloud space, and is even willing to provide lots of services at no cost.
The bottom line is no one is going to get into a $152-billion market space without the fiercest competition imaginable. There are a lot of choices, and that's good news for customers. Ten years is a long time off, and something we haven't even thought of yet may emerge at that point. Besides, if someone does monopolize the space in a big, overbearing way, well, government regulators on both sides of the Atlantic are likely make being the sole cloud provider to most of the world's businesses may be more trouble than it's worth.