A few years ago there were many prophets for whom the cloud would end up completely displacing the computing processes of enterprise data centers. That was an exaggeration, but it stuck with people who only read short sentences. In the past it is easy to think that the two models will coexist as far as is predictable today, with an abundance of hybrid formulas. Still, demand for commonly called public cloud services (IaaS) is skyrocketing: Spending in that category has grown 35% in the third quarter, reaching a global total of $ 49.4 billion.
The acceleration is tangible: in 2020, the turnover of public cloud providers was 142,000 million and this year it will not be far from 200,000 million. It is not difficult to imagine the reasons: remote work and education, new processes that cannot be accommodated in the local infrastructure of companies, increasing use of specific applications from previously remote vertical sectors, such as banking and administration.
Europe spends 23% of the world market, but cannot compete in supply
A central feature of this market is its high concentration. Amazon Web Services (AWS) leads the pack, with a 32% share and 39% year-on-year growth. Its pursuer is Azure (Microsoft) with 21% and 50%. respectively. Google Cloud is not resigned to being third, but its share does not exceed 8%. First conclusion: 58% of the cake is eaten by three colossi, all of them American. The fourth is Chinese, Alibaba Cloud, with another 5%. The ten alternatives that follow add 21%, among them the French OVH, far in the table.
With this volume of business in hand, it is normal for the executives of the three companies – which are part of powerful corporations – to have a personal role in the IT market. The biggest by size, but still waiting to show his size, is Adam Selispky, who has just returned to AWS as CEO, taking over from Andy Jassy, promoted to head Amazon. More discreet, but no less famous, are Scott Guthrie and Thomas Kurian, visible heads of Microsoft and Google’s cloud business.
The intensity of the growth parallels the geographic expansion of the trio. This year, AWS has decided to open a data center in Aragon, while its competitors announce that they will install their own in Madrid; in the case of Microsoft through an agreement with Telefónica. Spain is no exception: it is a current investment of capital in infrastructures that combines several purposes. The first is to respond to the demand generated locally, especially acute in certain sectors with specific needs: healthcare, a priority for AWS, or financial, which is a priority for Microsoft. Google Cloud chooses to carve out a niche in hot applications such as data analytics, cybersecurity, and decarbonization.
Data sovereignty attracts investments in cloud computing to Europe
Therefore, AWS, Azure and Google Cloud have announced investment plans totaling $ 25 billion in the construction and equipment of some 300 new data centers around the world. In the face of such a deployment, any European initiative pales despite the continent accounting for 23% of global spending on IaaS.
An associated factor is what has come to be called data sovereignty: regulations – European, but also Asian – require that data generated in these countries reside exclusively in their jurisdiction, unless there are intergovernmental agreements. This induces the big three providers to rely on local partners, facilitating the realignment of a network of service providers in this transition to cloud computing.