Study: AWS, Google Cloud, Azure Will Seize More of Enterprise IT Spend

The cloud services industry is expected to increase at a 24 percent compound annual growth rate through 2024, according to Everest Group, with hyperscalers such as Amazon Web Services (AWS), Google Cloud, and Microsoft Azure capturing more of the business IT spend.

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Enterprises, on the other hand, will continue to seek a wide vendor portfolio in order to prevent vendor lock-in, solve data security and governance problems, develop new consumption and commercial models, and capitalize on suppliers’ particular capabilities, stated Everest Group.

In their business environment, more than 90% of enterprises now use one or more public clouds. COVID-19 has expedited enterprise migration to the public cloud, with the majority of businesses benefiting from business continuity throughout the pandemic. Hyperscalers intend to take advantage of this development by expanding their offerings beyond infrastructure services to include full-stack capabilities, allowing them to dominate enterprise IT spending.

Hyperscalers are enticing customers with “next-generation” services such as artificial intelligence (AI), machine learning (ML), the Internet of Things (IoT), natural language processing (NLP), augmented reality (AR) and virtual reality (VR), blockchain, and other technologies. In addition, prominent hyperscalers are changing their business models to attract businesses, such as increasing financial and technical assistance, giving A-team personnel for professional services, and providing extensive training resources.

Corporate readiness to work with both hyperscalers and non-hyperscalers, on the other hand, would demonstrate the strategic significance of private cloud, multicloud, and traditional infrastructure in running their end-to-end enterprise IT environment, according to Everest Group. Non-hyperscalers will remain significant, with companies frequently opting for non-hyperscalers due to their particular characteristics.

About This State of the Market Study

Everest Group’s new study, ‘Cloud Hyperscalers: A Critical – But Not the Only – Building Block of Enterprise IT,’ has these and other conclusions. This State of the Market study takes a deep dive into the worldwide IT cloud services market, offering data-driven insights into the overall market.

The study assesses cloud service trends and demand drivers, examines hyperscaler offerings, and explains how hyperscalers have evolved from providing infrastructure services to now delivering services across the whole business IT stack, making technology consumption easier.

Enterprises believe hyperscalers have their sweet spots but other options are also needed to run their end-to-end enterprise IT landscape, according to Everest Group research. Non-hyperscale cloud vendors and IT service providers can capitalize on the advantages they have to offer enterprises, including the following:

Some Takeaways for Non-Hyperscale IT Service Providers

According to Everest Group study, enterprises think hyperscalers have their sweet spots, but they also require alternative solutions to operate their end-to-end corporate IT environment. Non-hyperscale cloud suppliers and IT service providers can take use of the benefits they have to offer businesses, such as:

  • Innovative Commercial Models – For on-premise deployments, most non-hyperscale providers have changed their pricing strategies. As a result of this shift, businesses are rethinking their infrastructure procurement strategy and seeing these suppliers as essential and viable partners.
  • Easier consumption models – Cloud hyperscalers have taught vendors to make ‘as-a-service’ consumption a fundamental component of their strategy. As a result, clients are receptive to the concept of a “local cloud” that may operate independently or be expanded into a hybrid edge-to-local distributed cloud architecture.
  • Product innovation – Infrastructure suppliers are introducing new service offerings not to compete with cloud hyperscalers, but to demonstrate their ability to assist customers in establishing a digital business. Enterprise-grade security, workload-specific computing, a single pane of administration, and transparent billing are among the advances. Some non-hyperscalers are also developing ‘software only’ platforms that aren’t linked to their infrastructure and may be used in any hosting environment, giving clients more freedom. Furthermore, many companies are boosting their open-source adoption to not only decrease costs but also to deliver a market-standard product.
  • Enterprise context and consulting skills – Enterprise technology transformation initiatives are complicated, necessitate sophisticated consulting abilities, and demand a mix of technical and vertical experience. This skill set has been created by IT service providers, but hyperscalers, on the other hand, have a limited grasp of the enterprise IT ecosystem.
  • Deep industry knowledge – Service providers have in-depth industry expertise and a greater understanding of industry-specific issues, which would allow them to better meet the needs of certain businesses.
  • Strategic client relationships – Enterprises would regard service providers as reliable partners. Their partnership has seen many technological shifts throughout the years. The ability of service providers to execute has been demonstrated.
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