When the public cloud grew up: A look back at growth in the 2010s

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For all the influence that public cloud services now have in the IT marketplace, it is easy to forget is how young they still are. From the inception of large public and private cloud providers in the late 2000s, growth has continued at a dramatic pace. MSDW spoke with cloud experts from throughout the market, taking a look back at the last decade and what it means for Microsoft Azure in the 2020s.

Data center and server spend goes down, cloud spend goes up

A recent report from the Synergy Research Group indicates that data center spending grew on average four percent per year throughout the last decade. By contrast, cloud expenditure was expanding at 56 percent, reaching $97 billion in 2019. Andy Lipnitski, IT director at ScienceSoft, a simulation software vendor, told MSDW that he sees these trends continuing:

We expect these trends to transcend into 2020 and beyond. Taking into account such advantages of the cloud as deployment agility, configuration flexibility, and the freedom to infinitely scale your business infrastructure, Microsoft Azure will see increased income from new customers migrating to the cloud, as well as from existing Azure users.

The drop in server and data center spending coupled with fast-growing cloud spending makes sense given some shifts in the way that technology is used. ISG technology analyst Blair Hanley Frank said:

This isn’t really an either-or proposition. Because hyperscale cloud providers can be more efficient with their server use, they don’t have to spend as much on hardware, even as the cloud business takes off. Meanwhile, enterprises are trying to elongate the lifecycle of their existing hardware while planning cloud transitions, so they want to also curtail any spending on new server hardware. 

According to Sean Roberts, general manager of public cloud at Ensono, all of the big public cloud providers are trying position their offerings more globally, often by adding availability zones. Microsoft, for instance, doubled the number of availability zones in the UK just within the last year, expanding its compute capacity in the region by 1,500 percent. Roberts said:

As more and more companies look to adopt a multi-cloud strategy, the big players in the space are learning they can’t own all the workloads. Microsoft is leading in this area with its announcement of Azure Arc, which allows their customers to bring Azure services and management to any infrastructure, including AWS and Google Cloud. I expect Microsoft to expand its offerings in this area to make it the ideal management plane for multi-cloud use.

A change in the way of thinking

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