Telcos must do more to grab cloud market share

25 Jan 2018
00:00
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Synergy Research Group revealed that the global cloud market grew 24% annually for the period ending September 2017.

The researcher said that of the six cloud services and infrastructure market segments, operator and vendor revenues, IaaS and PaaS services had the highest growth rate at 47%, followed by enterprise SaaS at 31% and hosted private cloud infrastructure services at 30%.

Data suggested that 2017 widened the gap between spending on cloud versus on hardware and software used to build public and private clouds. It noted that 2016 was the year in which spending on cloud services overtook spend on cloud infrastructure.

John Dinsdale, a chief analyst and research director at Synergy Research Group, noted that in 2015 cloud became mainstream and by 2016 it started to dominate many IT market segments.

“Major barriers to cloud adoption are now almost a thing of the past, with previously perceived weaknesses such as security now often seen as strengths. Cloud technologies are now generating massive revenues for cloud service providers and technology vendors and we forecast that current market growth rates will decline only slowly over the next five years,” he concluded.

The researcher noted eight vendors that stood out among the 2017 market segment leaders.

Figure 1: Movers and shakers in 2017 cloud market

Source: Synergy Research Group

Over the period Q4 2016 to Q3 2017, total spend on hardware and software to build cloud infrastructure approached $80 billion, split evenly between public and private clouds, though spend on public cloud is growing more rapidly.

Infrastructure investments by cloud service providers helped them to generate over $100 billion in revenues from cloud infrastructure services (IaaS, PaaS, hosted private cloud services) and enterprise SaaS – in addition to which that cloud provider infrastructure supports internet services such as search, social networking, email, e-commerce and gaming.

Meanwhile UCaaS, while in many ways a different type of market, is also growing strongly and is driving some radical changes in business communications.

Carriers, for their part, are not standing still either. According to Gartner, communications services providers (CSPs) worldwide face profound challenges to master the shirt from traditional telco network-based to cloud-based service delivery across several functional and technical domains.

Gartner research director Martina Kurth said “CSPs are embarking upon an evolutionary path that unifies cloud instances of SDN/NFV, OSS/BSS (e.g. Paas/SaaS/Iaas) and enterprise IT. Coupled with microservices, container based service design principles and cloud integration services, CSPs endeavor to create synergies between their various cloud domains and drive flexibility and agility across their cloud deployments.”

Gartner predicts that vendors which are well positioned in the end-to-end Telco Cloud stack market, are also likely to take market share in corresponding future network and/or IT technology markets such as digital technology platforms and ecosystems, Data/AI, IoT and 5G.

Gartner says a fully integrated, interoperable, cloud and virtualization telco stack will pave the evolutionary technology adoption path from SDN/NFV to network slicing to 5G and IoT in the future.

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