The future is now for the infrastructure services market. Instead of building clouds to compete with AWS and Azure, IT outsourcers, telcos and technology vendors continue to shut down these services and transition to the managed third party cloud model. In many cases, they are using M&A to try and accelerate these plans. And this is happening on a global basis.
The numbers for hyperscale cloud speak volumes. But a closer look reveals not just how fast the big clouds are growing, but how efficient the scaling is. Economies of scale, innovation and improved operational efficiency continue to flow down to the bottom line. Meanwhile, the customers and deals are getting bigger and bigger – adding a certain degree of lumpiness to what has been a somewhat predictable growth trajectory.
The transition in the sector has been underway for a while now, but there are signs that another phase is already starting to kick in. Managed third party cloud services are building into the value-add layer and integrating with traditional infrastructure. And the hyperscale platforms are enabling new technology platforms as we have seen with VMware Cloud on AWS.
The sector is changing fast, but it is important to keep in mind just how early in the game it is. The projected future growth for cloud is enormous and data centre operators continue to acquire plots of land to build supporting infrastructure, while the clouds are developing various products and services to make it easier for organizations to migrate infrastructure to cloud. The land grab is on and the impact continues to reverberate across the entire ecosystem.