News

Cloud Research Shows Rise of Hyperscale Operators, Led by AWS

• By David Ramel
• 04/14/2017

Synergy Research Group published a new report detailing the rise of hyperscale operators, who are grabbing up cloud market share at an increasing rate, led by Amazon Web Services Inc. (AWS).

The company has been tracking the cloud computing space with a steady stream of reports that typically place AWS at the forefront of various metrics, such as this recent infrastructure report.

Now, its latest report tackles the concept of "hyperscale operators." Those organizations, Synergy said, "typically have hundreds of thousands of servers in their datacenter networks, while the largest, such as Amazon and Google, have millions of servers."

Synergy has identified 24 such hyperscale operators and has tracked their capture of increasingly large segments of the cloud computing space. These segments include: infrastructure services encompassing Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and hosted private clouds; and hosted Software-as-a-Service (SaaS).

"In 2016 those [hyperscale] companies in aggregate accounted for 68 percent of the cloud infrastructure services market ... and 59 percent of the SaaS market," the company said in a post this week. "In 2012 those hyperscale operators accounted for just 47 percent of each of those markets."

The 24 hyperscale operators identified by Synergy (it didn't list them all) reportedly run nearly 320 large datacenters in their aggregate networks, with many having multi-national presences. "The companies with the broadest datacenter footprint are the leading cloud providers -- Amazon, Microsoft and IBM. Each has 45 or more datacenter locations with at least two in each of the four regions (North America, APAC, EMEA and Latin America)," the company said.

Synergy said the tremendous resources available to hyperscale operators will likely enable them to keep their grip on market shares. "The scale of infrastructure investment required to be a leading player in cloud services or cloud-enabled services means that few companies are able to keep pace with the hyperscale operators, and they continue to both increase their share of service markets and account for an ever-larger portion of spend on datacenter infrastructure equipment -- servers, storage, networking, network security and associated software," the company said.

In a PDF summary of its research, the company listed the following predictions for the next five years:

• Worldwide markets for cloud services will continue to grow at impressive rates -- IaaS, PaaS, SaaS hosted private cloud.
• This will pull through increased spend on public/hyperscale datacenter infrastructure; and crimp spend in on-premises IT.
• Hyperscale providers will continue to increase their share -- of service markets; of overall IT budgets; of spend on datacenter infrastructure.

"Hyperscale operators are now dominating the IT landscape in so many different ways," said Synergy exec John Dinsdale in this week's post. "They are reshaping the services market, radically changing IT spending patterns within enterprises, and causing major disruptions among infrastructure technology vendors. Our latest forecasts show these factors being accentuated over the next five years."