Leveraging the cloud to build businesses at scale

The cloud is a mature market, but there’s rapidly accelerating demand.

The public cloud -- and Infrastructure-as-a-Service (IaaS) -- will continue to grow as a dominant way in which businesses operate in 2020. However, the reasons that organisations leverage the public cloud is shifting as organisations increasingly look to the cloud as a highly strategic resource.

Analyst firm, Gartner, predicts that through the year, public cloud revenue will grow by 17% -- an incredible amount given that it's a mature technology and therefore coming from a high base.

The reasons that the public cloud has seen such wide-scale interest is threefold -- it promises rapid scalability, better stability than can be achieved with in-house technology, and the ability to develop and deploy solutions quickly. The public cloud is a DevOps' paradise, in other words.

"The expectations of the outcomes associated with cloud investments, therefore, are also higher," Gartner research vice president, Sid Nag, said of the research in a release[1]. Adoption of next-generation solutions are almost always 'cloud-enhanced' solutions, meaning they build on the strengths of a cloud platform to deliver digital business capabilities."

One other key trend we see in the public cloud is increased consolidation among providers. Between 2017 and 2018, the top five public cloud providers grew their overall market share from 73% to 77%[2]. 2019's numbers will be available mid-year, but that growth rate can be expected to continue, and within that, Alibaba Cloud has seen the greatest rate of growth, outperforming the market by increasing its revenue by almost 93% as well as increasing its overall share from 5.3% to 7.7%.

The reason for this uptick in demand for large cloud providers is strategic; organisations can gain access to additional innovation that is not available from smaller public cloud providers.

Sheer innovation drives results

One of the reasons that organisations are relying on big public cloud providers is because the need for rapid scaling is unprecedented and addressing this requires a new level of innovation. Alibaba Cloud, for example, is leveraging its expertise in scalability and reliability to help organise the biggest events worldwide:

1)   11.11 Global Shopping Festival. China's biggest online shopping event generated $1 billion in gross merchandise volume in just the first minute and eight seconds last year[3]. Over 200,000 brands, across 78 countries in the world, participated in the event. Historically, retailers have struggled with big spikes in traffic on sales events -- Black Friday in the US, for example, has caused Website outages for 40% of retailers in the past three years[4]. An outage of even a second during 11.11 Global Shopping Festival would have represented a catastrophic loss of revenue, and so Alibaba Cloud's rapid scalability was heavily relied upon to handle the sudden spike in demand and ensured zero downtime during the 24-hour sales event.

2)    The 2020 Tokyo Olympic Games. As the Olympics increasingly moves from television broadcasting to a mixed-media approach to engage with audiences, the need for a highly scalable, flexible, and reliable cloud solution has also increased. OBS Cloud, the innovative broadcasting solution that operates on Alibaba Cloud, helps to transform the media industry for the digital era. Set to be in place for Tokyo 2020, the OBS Cloud aims to offer all the necessary cloud components, in specialized configurations, that can support the extremely demanding content production and delivery workflows of the broadcasting of the Olympic Games. Furthermore, the data demands created around the Olympics is expected to escalate significantly thanks to the ability to track athletes with 3D Athlete Tracking (3DAT) and provide 8K and virtual reality broadcasting options.

As Alibaba Group CMO, Chris Tung, said in an interview: "We want to keep driving innovations, upgrade the Games digitally, and find better cost-effective ways to run the games. We want host cities to get all those benefits for athletes, as well as for spectators to experience something more relevant and enjoyable."[5]

Alibaba Cloud's ability to deliver this kind of data-driven experience with big events has come from its massive investments in R&D. For example, it has committed over $15 billion in a global research program in areas that included data intelligence and artificial intelligence[6].

That investment, and the expanded capacity for Alibaba Cloud services to provide more than capacity by offering a developer's environment, it becomes clear why we're seeing the interest in public cloud services consolidate towards the larger players. Not only are these platforms able to host a business' core processes and data, and rapidly scale as needed to ensure there's no outage, but in applying intelligence to the platform, businesses are able to drive deeper competitive advantages and provide their customers with a richer and more compelling experience.

As Chad Meley, VP of marketing at Teradata said in a 2020 predictions piece "public clouds will aggressively … offer high-value solutions optimised for their clouds and integrated with other components"[7]. Previously, organisations had turned to the public cloud for the efficiencies that it provided -- the ability to reduce maintenance costs and achieve a higher level of uptime. But in 2020 and beyond, public cloud providers such as Alibaba Cloud will become more attractive because of the data-driven insights, analytics, and competitive advantages that they're able to offer through the platform.

"As predictive analytics take precedence in all business decision making, organisations are shifting towards computing options that deliver faster compute, analytics and business intelligence. Organisations moving to the Cloud expect an infrastructure that will meet ever-changing demands. So a scalable, distributed set up is always in demand. This is true for Australian organisations that are looking to control their capital expenses and to expand overseas," said Raymond Ma, General Manager of Alibaba Cloud Australia and New Zealand.

For more information on Alibaba Cloud and IaaS solutions, click here.

[1] https://www.gartner.com/en/newsroom/press-releases/2019-11-13-gartner-forecasts-worldwide-public-cloud-revenue-to-grow-17-percent-in-2020

[2] https://www.theregister.co.uk/2019/07/29/cloud_wars_top_providers_gartner/

[3] https://www.forbes.com/sites/sergeiklebnikov/2019/11/11/alibabas-1111-singles-day-by-the-numbers-a-record-38-billion-haul/#14db0a922772

[4] https://www.retaildive.com/news/will-retailers-avoid-black-friday-website-outages/567985/

[5] https://www.cmo.com.au/article/670429/alibaba-group-cmo-shares-vision-behind-its-olympic-games-partnership/

[6] https://www.cnbc.com/2017/10/11/alibaba-says-will-pour-15-billion-into-global-research-program.html

[7] https://www.eweek.com/cloud/predictions-2020-what-s-going-to-happen-in-cloud-computing