Information Technology

Public Cloud Market Growth

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<p style="text-align: justify;">Gartner Inc. announced the forecast value of the public cloud market, "Worldwide end-user spending on public cloud services is forecast to grow 20.7% to total $591.8 billion in 2023, up from $490.3 billion in 2022".</p><p style="text-align: justify;">While the world economy is facing inflationary pressures and macroeconomic conditions, the growth of the public cloud demonstrates continuous growth and is expected beyond.&nbsp;</p><p style="text-align: justify;">The three largest cloud providers leading the <a href="https://www.crn.com/news/cloud/aws-vs-microsoft-vs-google-cloud-q3-2022-earnings-face-off" target="_blank" rel="noopener">public cloud markets</a>, AWS (Amazon Web Services), Google Cloud, and Microsoft Azure, were recently addressed with their robust earnings for the quarter in financial reports of Q3 2022. AWS grew 27% year over year, reporting net sales of $20.5 billion for Q3 2022.&nbsp;</p><p style="text-align: justify;">Google Cloud was reported with $6.9 billion in revenue, 37% year over year. Microsoft's cloud business grew by 20%, $20.3 billion. The market is predicted to continue with growth in double digits towards 2030.</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">The reasons for the expected continuous growth of public clouds are described with five trends:</p><p><strong>Spread of Cloud-first Strategy</strong></p><p>The spread of the cloud-first strategy into enterprises and public sectors, which provides priority to considering the cloud as an IT infrastructure, which enables them to shorten the deployment and migration period for projects moving from conventional IT to the cloud environment</p><p><strong>Partnerships</strong></p><p>Partnerships with more system integrators and consulting companies have increased with their cloud services capabilities, enabling public cloud providers to reach further markets</p><p><strong>Start-ups</strong></p><p>The start-ups with entrepreneurs running small businesses have increased dramatically over the past decade. Cloud computing services are in high demand in this sector due to factors such as cost savings and business flexibility. Start-ups are growing rapidly and have natural compatibility with adopting cloud services, which operate in a secure environment without the need for proper infrastructure.</p><p><strong>Adoption of Cloud Services</strong></p><p>A growing trend of cloud services in emerging countries brings new growth opportunities to the global market. Emerging countries such as Central Europe, the Middle East, and Africa, Latin America, etc., are steadily adopting cloud computing.</p><p>The growing need for cost-effective solutions is also expected to benefit the market. In addition, companies are rapidly shifting to high-tech technologies, including cloud computing services, which expect to sustain the market's growth prospects for the following years.</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">Today, cloud computing became a granted model across companies and industries in which programs and applications can be accessed simultaneously from multiple devices and servers. Cloud computing technology has become a shift in IT history, bringing newer and faster ways to deliver online applications, infrastructure solutions, and emerging technologies such as AI/ML.&nbsp;</p><p style="text-align: justify;">On top of those innovations, rising energy costs also become a tailwind for public cloud providers. More enterprises have been running IT workloads in their own data centers. They are being under the pressure of rising energy costs and encouraged to optimize their operating costs by moving their IT workloads onto the cloud.</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;"><span style="font-size: 10pt;"><em>This article was contributed by our expert <a href="https://www.linkedin.com/in/tatsuorii/?external_page=LPC.Immersive&amp;external_control=ViewProfileLink&amp;external_app_instance=690d24e3-e8ba-4866-893e-685263a5862a&amp;external_page_instance=&amp;experiment=displayLinkedInDataPrebind" target="_blank" rel="noopener">Tatsu Orii </a></em></span></p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><h3 style="text-align: justify;"><span style="font-size: 18pt;">Frequently Asked Questions Answered by Tatsu Orii</span></h3><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">1. What percentage of companies are moving to the public cloud? </span></h2><p style="text-align: justify;">Assumed 30%+ in 2022, according to Gartner&rsquo;s report. Our new digital workloads will be deployed on the cloud-native platform from 30% in 2021 to 95% by 2025, said Gartner Inc.</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">2. What are the major challenges for the public cloud?</span></h2><p style="text-align: justify;">&ldquo;Cloud engineer shortages&rdquo; and &ldquo; lack of cloud computing knowledge&rdquo;.</p><p style="text-align: justify;">While public cloud services provide various benefits for users, such as scalability of server resources, automation, flexibility, and agility, users need to take control of their digital workloads, which they migrate onto the cloud.&nbsp;</p><p style="text-align: justify;">And specialized knowledge and skillsets are often required on the user side. In addition, more variety of services by the public cloud providers continues to be expanded year by year. And those specifications are also frequently updated.&nbsp;</p><p style="text-align: justify;">In recent years, IT system departments have been facing challenges of engineer shortages who have the right skillsets and knowledge of cloud computing.</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">3. What are the factors considered while selecting public cloud services?&nbsp;</span></h2><ul style="text-align: justify;"><li style="list-style-type: none;"><ul><li>Cloud services performance, including end-to-end solutions, usability, latency, stability, and easiness of migration</li><li>Pricing, including frequency of price reduction and credit programs being provided</li><li>Post-sales support (e.g., Enterprise support, developer support in AWS)</li><li>Sales relationship with customers</li><li>Brand image</li></ul></li></ul><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">4. What are the advantages of public cloud computing?</span></h2><p style="text-align: justify;">Public cloud computing services provide advantages such as:</p><ul style="text-align: justify;"><li style="list-style-type: none;"><ul><li>Scalability to change the sizing of server capacities</li><li>Cost advantage, low initial costs/low maintenance costs</li><li>Agility to build an infrastructure and deploy IT workloads</li><li>Availability of the latest technologies such as AI/ML, IoT</li><li>High standard of security</li></ul></li></ul><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p>
KR Expert - Tatsu Orii