Earnings, AWS, cloud growth, cloud exits, APAC
It was a busy week with the start of earnings season and more developments on the strategic side.
Amazon was first out of the gate in infrastructure services and posted another strong quarter. It is still growing at a 40% y/y rate and is expanding its infrastructure to support existing customer growth and geographic expansion on a global basis.
It is no secret that Amazon’s growth has had far-reaching impact. It has pushed managed hosters to the managed third party cloud model and forced service providers of all shapes and sizes to get out of the public cloud business. This past week, GoDaddy confirmed it would leave the cloud server market for the second time and shutter its offering. But GoDaddy’s move was less about the public cloud market and more about product line rationalization and going after the diversity of use cases and profiles in the market. We discuss in more detail.
There were a number of strategic developments across the sector. ProfitBricks in Germany is another cloud provider that has also experienced challenges in the market and this past week confirmed that United Internet would take over full ownership of the business. Meanwhile, there was yet more activity in managed third party cloud with Ensono picking up a Microsoft-focused cloud consulting and managed services shop. On the SMB side, word is that Web.com is changing directions on its strategic evaluation process and SiteLock, a vendor supporting SMB-focused hosters, added to its capabilities with the purchase of Patchman. Finally, the telco market has been at the centre of a number of different divestitures, but there is still acquisition activity focused on hosting and managed services and this past week we saw Cincinnati Bill acquire managed services provider and hoster OnX.
The growth of cloud in Asia was another prominent theme this past week and colocation providers benefitted. Tencent expanded in Germany with Interxion and an unnamed cloud provider is working with GDS in Shenzhen. Meanwhile, Amazon’s earnings report touched on its plans to expand AWS in Hong Kong and IBM is working on more new data centres, which includes an expansion in Sydney, Australia.
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