2021 was another stellar year for anything cloud-related. Migration to the public cloud continued in full force. According to Gartner, spending on public cloud services was on track to reach $396 billion by year’s end, a 26% increase from the previous year. And the trend is set to continue with an expected 21.7% hike in 2022. What does this growth look like on the ground? How did it impact business in the past year, and what can it reveal about the future of the cloud market?
Trend 1: More data centers
On the ground, we can clearly see the major players rushing to grow their offering. They're opening new data centers to house the influx of new customers who need data storage, computing and accompanying services.
In 2021 we saw several new regions deployed by the three major providers . And looking ahead to the future: maps they published indicate the trend is real. AWS plans on opening 8 new regions, to add to 25 active regions (+32%). Azure will add 16 regions to their 47 (+34%). GCP has plans for 10 new regions, on top of 29 existing regions with at least 3 availability zones (+34%).
Call it a growth spurt - or just generating supply to meet demand. But the business case for public cloud services is clear and evident.
Trend 2: New neighborhoods
Historically, data centers have been clustered in North American and Western Europe. But new regions are popping up to serve more emerging markets in South America, the Middle East and Southeast Asia.
Cloud providers are investing heavily in Asia and the Middle East. All three providers have data centers planned in the Arabian Peninsula. More centers are planned in China, Indonesia, Israel, India, Japan, Australia and New Zealand.
This demonstrates perfectly how the cloud market is truly global. Access to services is not limited to traditional markets and players, and mobility within it is growing - with opportunities ripe for businesses on nearly every corner of the globe.
Trend 3: Technology for all
Besides the physical expansion (new data centers and new regions,) 2021 saw many new services offered. The main difference from past offerings is that these services tend to target more niche areas.
Cloud providers continue to offer storage and basic computing, but they’re opening up an entire vault of advanced technological services to businesses across the globe, including abilities that before were only available to enterprises.
Businesses can now easily train and implement computer vision models, they can use comprehensive machine learning platforms and apply voice recognition to make support center voice interactions faster and more secure. They can develop and deploy apps faster, and can offer semantic search capabilities to end-users, based on intent, not just key works.
Other new services include advanced spelling support to promote accuracy and personalization for customers conversing with chatbots.
The list goes on and on, but the trend is clear. The public cloud in 2022 will have more services for businesses of every shape, size and business model.
Trend 4: No major shifts in market share
There were no major changes in 2021. And in 2022, the three major players, AWS, Azure and GCP will continue to dominate the public cloud market (in that order.) These providers are all investing huge amounts of capital in growing and expanding their business through new regions and services. The stakes are high, and it would take an enormous investment to try and make a small dent in the current business landscape.
Some public cloud providers on the sideline, in the mix to shake up the current hegemony are IBM and Oracle. Or perhaps Alibaba will be able to break out of the Chinese market to impact the global public cloud arena. But right now, there are no signs of change. AWS, Azure and GCP will continue to dominate the public cloud.
So what's the bottom line that emerges from these four trends, in terms of business and risk in the future?
Cloud downtime will continue to challenge businesses
Cloud dependency will continue to dominate the business landscape. Companies will embrace the affordability of cloud computing, the access to every conceivable technological advancement, the state-of-the-art security, and the ability to scale fast. But greater dependency introduces a growing risk factor that needs to be acknowledged.
Heavy reliance on 3rd party IT services means companies are at the grace of their providers. This new risk factor should not cause alarm nor fear. Downtime can be damaging to a business, but it’s certainly manageable.
Businesses need to set up their infrastructure to suit their uptime needs. They can include redundancy across regions or carriers, and build a contingency plan. These may all carry big price tags, but they must be considered to promote business continuity.
On top of that, parametric cloud downtime insurance provides a complement to these approaches and surety in a world where much is uncertain. Downtime coverage ensures there are funds to deal with the damages of a cloud downtime.
The parametric model pre-assesses cloud exposure and potential damages, so businesses don’t require proof of damage or a lengthy claims process at a time where time and resources are stretched thin. Rapid payouts can address revenue loss, customer churn, lost productivity, or any other damages caused by a cloud downtime event that interrupts their business.
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