Cloud adoption could benefit Microsoft and peers
Earlier in this series, we discussed how increased hybrid cloud adoption could benefit Microsoft (MSFT). As reported by Reuters, Home Depot spokesman Stephen Holmes stated that “our philosophy here is to be cloud agnostic, as much as we can.” Home Depot uses Microsoft (MSFT) Azure as well as Alphabet’s (GOOG) Google Cloud Platform. According to Reuters, higher multi-cloud or hybrid cloud usage indicates that rather than restricting themselves to a single cloud provider, organizations are preferring to work with more than one cloud provider to build their applications.
This trend indicates that leading cloud players such as Amazon (AMZN), Microsoft, Alphabet, and IBM (IBM) could continue to benefit from cloud adoption. Amazon’s, Microsoft’s, Alphabet’s, and Intel’s (INTC) recent earnings results exceeded analysts’ expectations.
As reported by Reuters, Canalys analyst Daniel Liu stated that the “cloud market will keep growing faster than most of the traditional information technology segment, as the market is still in the developing stage.”
A $12 billion market
According to Synergy Research, cloud infrastructure service revenue grew 40% to $12 billion in calendar 3Q17. As the above presentation shows, Amazon continues to lead the cloud space. Explaining Microsoft’s, Google’s, and IBM’s position in the cloud space, Synergy Research analyst and research director John Dinsdale stated that “Microsoft and Google too deserve plaudits for the growth rates they are achieving, while IBM is gaining market share in its sweet spot of hosted private cloud services. It is becoming increasingly difficult for cloud providers outside of the leading pack to make an impression on the market share rankings.”