Global spending on cloud Services surpasses $300 billion, report

Cloud Services have become an integral part of business operations for many large companies and in 2020 the industry earned an estimated revenue of over $300 billion globally.

According to data presented by TradingPlatforms.com, global public IT cloud services market revenue for 2020 was at $312.4B – a 34% Increase from 2019.

In 2016, global spending on public IT cloud services was just under $100B. In 2021 that figure has ballooned to a healthy $312.4B after experiencing a 34% increase from 2019’s $233.4B revenue. In the 4 year period from 2016-2020 revenue from spending on cloud services grew at an impressive compound annual growth rate (CAGR) of 36.31%.

Of the three main types of cloud services, Software as a Service (SaaS) still accounts for the largest share of total revenue with a 63% share. In 2020 SaaS revenue amounted to $197.6B which is a 33% increase from 2019’s $148.5. S From 2016-2020 SaaS revenue grew at a CAGR of 34.1%

Infrastructure as a Service (IaaS) held the second-largest share of the revenue accounting for 21.5% of total revenue. IaaS experienced the largest growth among the three main types of cloud services with a 37% increase in revenue from $49B in 2019 to $67.2B in 2020. From 2016-2020 IaaS had a staggering CAGR of almost 40%.

Platform as a Service (PaaS) revenue accounts for just 15% of total revenue and experienced a 32.6% increase from $35.9B in 2019 to $47.6B in 2020. PaaS experienced a CAGR of 42.42% from 2016-2020, the highest out of the three main types of cloud services despite experiencing the lowest YoY growth.

Rex Pascual, editor at Trading Platforms, commented: “The cloud services industry was already gathering strong momentum prior to the outbreak of the COVID-19 pandemic in 2020. Lockdowns across the world resulted in many businesses rapidly shifting to cloud-based services giving the industry its highest YoY growth to date. Expect the industry to sustain this growth as many more businesses see the value in the adaptability of cloud services even in a post-pandemic world.”

www.tradingplatforms.com

Shopify expands partnership with Google Cloud to enable global growth

Google Cloud and Shopify, a global commerce company, have announced an expanded partnership that will enable Shopify’s more than 1.7 million merchants to have access to Google Cloud’s technology across a broader set of regions.

And, by leveraging Google Cloud’s power-efficient resources globally, Shopify is working to reduce its overall carbon footprint while delivering a better experience for merchants and their consumers.

In 2020, Shopify merchants generated nearly $120 billion in gross merchandise volume, as more businesses moved online in response to the COVID-19 pandemic and accelerated shifts in consumer behavior.

 As the demand for ecommerce continues to increase, Shopify’s expanded partnership with Google Cloud will bring data processing and storage closer to merchants in more regions, to further improve store speed and performance.

In 2020, Shopify’s revenue increased 86% year-over-year and Black Friday sales grew 75% from the previous year.

The demand for independent, direct-to-consumer shopping is only increasing, and this extended partnership between Shopify and Google Cloud will mean small- and medium-sized businesses globally will have even more access to world-class infrastructure to effectively handle all levels of traffic.

As a part of this partnership, Shopify will leverage Google Cloud’s global infrastructure to reduce latency and give shoppers more personalized, engaging experiences, including:

Google Cloud’s network of 25 regions and 76 availability zones around the world provides lower latency and higher reliability, allowing Shopify to provide a fast, highly-available service to merchants around the world.

Google’s Global Virtual Private Cloud (VPC) will make it easier for Shopify to write and deploy applications that span multiple regions.

In-country disaster recovery will help Shopify maintain business continuity across the globe.

Google Cloud’s services will assist Shopify in meeting various regulatory, security, and compliance requirements, which vary region-to-region and country-to-country. 

The cleanest cloud in the industry, Google Cloud is helping Shopify reduce its carbon footprint and achieve the company’s sustainability goals.

Additionally, Shopify will join Google Cloud’s Partner Advantage program, enabling the two companies to partner on joint go-to-market initiatives, bringing Shopify’s ecommerce platform to more businesses around the world.

“Our partnership with Google Cloud will mean that more Shopify merchants around the world have access to competitive computing technologies that would otherwise only be available to enterprise brands,” said Farhan Thawar, VP of Engineering, Shopify. “We know that during the COVID-19 pandemic from mid-March to mid-Sept, 84% of consumers have shopped online. Improved store speed and performance will give our merchants a competitive edge by allowing them to better serve buyers where they are, and it will do so in the most energy efficient way possible through Google Cloud.”

“Shopify is trusting Google Cloud to help the company scale across the globe, allowing its merchants to handle peak traffic at any time of the year,” said James Lambe, Managing Director, Google Cloud. “Over the last three years, we’ve worked with Shopify engineering to ensure its business can scale as it continues to experience rapid growth. We’re thrilled to continue on this journey together.”

www.shopify.com

www.cloud.google.com

[Column] Setumo Mohapi: Finding the right cloud strategy for your business

2021 will be the year defined by business’ attempt to recover, build better resilience and restructure their operations following a tumultuous year of change as a result of the global pandemic.

The ability to adapt to the new world of work and the additional challenges that now lie ahead in 2021 will be the defining factor for those who will maintain business success – and those who won’t.

Although companies had previously set long term goals for their digital transformation, the pandemic has accelerated the adoption of digital solutions to ensure business continuity and sustainability.

Hybrid cloud has provided enterprises with a trusted and capable foundation to adapt to changing market needs.

In a hybrid cloud landscape, there are five key reasons that amplify the case for adoption:

Hybrid cloud brings agility, business resilience and continuity to the fore

Agility has always been a crucial outcome for most if not all enterprises. The ability to innovate and respond to changing market conditions is vital. Yet the speed, scale, and intensity of the impacts of Covid-19 has exposed certain deficiencies that may not have been considered. In our experience, it is often the case that the infrastructure and services requirements for transformation of the end-to-end network are understated when planning deployments of cloud solutions. The hybrid network that supports hybrid cloud deployments and services must not be the single point of weakness for organisations that require the full-stack capabilities to support agile, yet resilient businesses. The hybrid network must be programmable, flexible and allow for methods of consumption and billing that are standard in the cloud world. 

Hybrid cloud brings security and compliance complexities

As distributed workloads become the standard, and the security attack surface expands and potentially becomes as dynamic as the dynamic hybrid intelligent infrastructurte in the network and across the hybrid cloud environment, the overall response to the new security challenges must be equally up to the task. From conceptualisation and design of IT interventions, integration of OEM solutions, and finally, full-stack operations within the enterprise, organisations have to adopt the mantra  of secure by design, covering cloud, infrastructure, access, application and data security enabling business continuity seamlessly.  In this respect, embedded security moves from being a cost centre to being the critical transformation enabler under shared organisational responsibility.

Hybrid cloud is a driver for cost efficiency                                    

A more efficient total cost of IT operations is the biggest driver of hybrid cloud adoption, and it’s easy to see why. The shift to a distributed workforce model has meant people require access to both data and applications in new, different, and often complex ways – and organisations want to enable that in not only a cost-efficient manner but in a high-performance environment too. SD-WAN has emerged as a more cost-effective way of connecting to the cloud but it’s critical to note that optimising traffic flows across multiple connectivity options requires proper architecture and ongoing analysis and management.

Hybrid cloud simplifies internal operations through automation

It is complex to implement, but hybrid cloud ultimately simplifies internal operations through automation and streamlines the management of IT resources. This increases overall efficiency by reducing the time spent by IT teams on managing supporting infrastructures. To take advantage of hybrid cloud, understanding exactly what works in any given scenario, as well as how and where it can fulfil the needs of a particular business model is crucial. Mixing public and private cloud leverages the best of both worlds, each for different reasons and of course, different workload priorities.

Hybrid cloud offers business and IT leaders the chance to meet changing business demands head- on. While continuity and business resilience are fundamental, improving customer experiences and growing revenues still features highly on the list of business objectives.

You don’t have to go it alone

The role of partners also brings to light not only how much organisations rely on their partners’ skills and expertise, but how they drive greater efficiencies through the provision of integrated and flexible intelligent platforms and automation, led by cloud solutions. With more and more enterprises shifting a majority of their IT infrastructure to various third parties, customers can now fully benefit from the guidance and strategic counsel offered by vendors that are specialising across the OEM ecosystem.

“We believe that no two clouds are the same, and as such that no two implementations or approaches should be identical. Each cloud offering must be developed to serve a specific need and to answer a specific question.”

Setumo Mohapi is the Chief Go-to-Market Officer for Dimension Data