Channel now a "catalyst" for cloud service provider growth


The channel is fast becoming the "catalyst for continued growth" for cloud service providers, the latest research from Canalys has revealed, as enterprises increasingly opt for multi-cloud ad hybrid IT models.

According to the data, global cloud providers appear to be reaching a "critical point" in their growth strategies as organisations seek the best cloud platforms for running specific applications, AI, analytics or general-purpose compute.

Many businesses are also preferring to invest in more than one cloud service provider in order to spread their risk, Canalys found.

"This balancing creates a huge demand for channel partners to provide consulting, migration, integration and management services across multiple platforms," commented Daniel Liu, research analyst at Canalys. "The channel is becoming a new catalyst for continued growth of hyperscale cloud service providers, particularly as competition intensifies."

Illustrating this risk-spreading trend, Canalys highlighted Microsoft's win over AWS to secure the US Defense Department's JEDI cloud contract, said to be worth $10 billion over ten years.

As more organisations opt for this approach, the research firm added that success will "increasingly be defined" by the technology alliances that cloud service providers generate, well as developing relationships with key channel categories.

"Microsoft has built new partnerships with Oracle, VMware and most recently SAP, which gave it greater credibility with enterprises as core applications are migrated to the cloud," said Alastair Edwards, chief analyst at Canalys.

Similarly, Google has also positioned itself to be more relevant to enterprise partners – particularly vertically-aligned systems integrators - by focusing on specific applications and verticals, as well investing considerably in internal sales and partner resources.

"The largest systems integrators are investing in partnerships and building business practices with all three of the top cloud providers – AWS, Microsoft and more recently Google Cloud – recognising that their customers want support across all the major platforms," Edwards added. "Other channel partners are increasingly doing the same."

Canalys' market data also revealed that the worldwide cloud infrastructure services market grew 37% in Q3 2019 to reach $27.5 billion.

AWS retained its position at the pop of the market despite slowing growth of 35% and a market share slip to below 33%. Second-placed Microsoft's registered a 59% increase, with Azure increasing its market share to 17%. Google Cloud also registered growth, up 69%, to solidify its presence among the global cloud frontrunners, Canalys said.

Daniel Todd

Dan is a freelance writer and regular contributor to ChannelPro, covering the latest news stories across the IT, technology, and channel landscapes. Topics regularly cover cloud technologies, cyber security, software and operating system guides, and the latest mergers and acquisitions.

A journalism graduate from Leeds Beckett University, he combines a passion for the written word with a keen interest in the latest technology and its influence in an increasingly connected world.

He started writing for ChannelPro back in 2016, focusing on a mixture of news and technology guides, before becoming a regular contributor to ITPro. Elsewhere, he has previously written news and features across a range of other topics, including sport, music, and general news.