Executive Summary
Hyperscale cloud remains the driving force behind the Internet infrastructure ecosystem. In the second half of 2020, the sector quickly came back from the pandemic-driven lows and by early 2021, there were signs that acceleration was potentially on the horizon. Coming out of 2Q21, there is more evidence that this growth acceleration is starting to take hold. The performance is coming primarily from the very top of the category. There has been some sluggishness coming out of APAC and Alibaba Cloud was the most directly impacted. As a result, our total market aggregate number has come down a bit even as we have dialed up our projections for the likes of AWS and Google Cloud.
Future growth is going to come from all directions. The cloud market is increasingly global and few if any domestic competitors stand in the way of the hyperscalers. They are entering new markets around the world, fueling local adoption and quickly attaining a position of dominance. Cloud is no longer about raw compute and storage infrastructure. Organizations on the cloud are using the plethora of value-add products and services at their disposal and this is boosting existing customer growth at significantly higher margins. Cloud adoption has always been incremental and somewhat conservative. But that label is quickly being shed amid the pandemic as organizations rethink and revisit traditional models and double down on cloud. An urgency to drive more efficiency, re-architect for a cloud-centric world and shift CapEx to OpEx, is at the centre of very conversation. Needless to say, the public cloud stands to gain from this.
Hyperscalers continue to benefit from the massive economies of scale they have built. Pricing
has never been more aggressive, growth has promoted innovation and product development and global expansion continues unabated. The end user benefits directly, and at the same time, the hyperscalers continue to become more profitable.
Most importantly, all the clouds recognize this is the early stage of a tectonic shift in the IT infrastructure landscape. Nobody is trying to pocket profits or look for a lucrative exit. Hyperscalers see the big picture and are actively re-investing. The virtuous cycle of putting profits back into the business and fueling more innovation and growth is in motion and does not look to slow any time soon.
This report provides comprehensive growth rate projections and total revenue estimates for the world’s nine hyperscale cloud platforms on a five-year basis. Included are geographic splits and
a total market summation. This latest version also features a refresh of our hyperscale cloud region and interconnection node tracking. Hyperscale cloud is projected to reach ~$526b in value in 2026, with a five-year CAGR of ~35%.
