2011–2021 A decade of public cloud
The 2010s are over!
Gartner recently published its “Magic Quadrant for Cloud Infrastructure and Platform Services” for the year 2021, bringing the 2010–2020 period to a close and marking the entry into the new 2021/2030 decade.
An opportunity to look back and measure the progress of the Cloud industry against these publications.
Back to 2010
Who remembers the ancestor of this Quadrant, which we wait and browse every year as we wait for the result of the trifecta? In 2010, it was called “Magic Quadrant for Cloud Infrastructure as a Service and Web Hosting ” and included no less than 20 players!
The five leaders in the quadrant at the time were Savvis (later bought by CenturyLink), AT&T, Rackspace, Verizon, and Terremark (bought by Verizon the following year). They have all quickly disappeared from the radar since then, and have even left the IaaS market altogether.
Nevertheless, some of them are familiar: SoftLayer and IBM are already there, but it is above all AWS (still “Amazon” on the Quadrant!) that is already showing itself to be the most visionary (but far from being the most capable of delivering), and this will be the only year in which it will not be at the very top right of the Quadrant.
Gartner’s analysis of Amazon at that time is worth a look, judge for yourself:
“[Amazon] is a thought leader; it is extraordinarily innovative, exceptionally agile, and very responsive to the market. […] Amazon is a price leader, but it charges separately for optional items that are often bundled with competitive offerings. Prospective customers should be careful to model the costs accurately, especially network-related charges.”
Magic Quadrant for Cloud Infrastructure as a Service and Web Hosting, Gartner, December 2010
Still relevant 10 years later! It should be noted that the FinOps discipline, still unknown at the time, was already in the making and had a bright future.
The other two major hyperscalers we know today arrived later. Unlike AWS, these two first focused on the public cloud through PaaS:
- Windows Azure was announced in 2008 before being GA in 2010 and positioning itself on IaaS from 2012 with its first virtual machine services
- Similar development for GCP, which announced Google App Engine in 2008 before positioning itself in IaaS a few years later at the end of 2013 with Compute Engine.
Both will arrive in the Quadrant at the bottom right before joining AWS at the top: quickly in 2013 for Microsoft and only in 2018 for GCP. This late entry of Google among the leaders also illustrates the difficulty that Google has in establishing itself on the market as a credible player.
For example, in 2019, the report states:
“Google demonstrates an immaturity of process and procedures when dealing with enterprise accounts, which can make the company difficult to transact with at times”
Magic Quadrant for Cloud Infrastructure as a Service, Worldwide, Gartner, December 2019
A subject still relevant in 2021 when its long-term presence in the industry continues to raise questions.
2012–2017: the emergence of a market
Nothing and no one can escape it, the Public Cloud is making its mark in all sectors, on all continents, and for all service models (IaaS, SaaS, PaaS). Gartner estimates that the public cloud market will grow by 23% between 2020 and 2021, reaching 332 billion dollars this year, 82 billion of which will be for IaaS alone.
The emergence of the market can be seen at the beginning of the decade in the first quadrants, with many players and candidates launching themselves into the market that AWS has cleared. In the four years between 2012 and 2015, no less than 24 different names will be analyzed by Gartner, while Alibaba, Oracle, and Tencent, present in the last edition, have not yet joined the arena.
Many of these early winners will throw in the towel and switched to other models, such as OVH, VMware, and Rackspace. Others will be bought out: Terremark and Softlayer will end up with IBM, CSC with HP.
Ironically, Rackspace, a historical player in private and public clouds through its significant contribution to OpenStack as a founding member and major maintainer, will even end up focusing on the stacks of its former competitors Azure and VMware in the early 2020s.
It was also in the mid-2010s that the revenues of the Cloud divisions began to be shown separately in quarterly financial publications, putting an end to years of suspense about the presumed profitability of this industry against a backdrop of price wars.
Amazon started 2015 with flattering figures that would continue to be verified year after year: AWS was largely profitable (with very comfortable margins) and would continue to contribute to the group’s future good results, regularly accounting in recent years for more than half of Amazon’s profits for only about 15% of its revenues.
A refocusing will take place in 2017/2018 in two ways:
- Gartner is pushing AWS and Microsoft back in its Quadrant, as they have risen too high, too fast, leaving little room for possible progression.
- Alibaba and Oracle, both still present today, join the Quadrant at this time. 2017 will be the last Quadrant in which all the challengers will be present: the following year, 8 competitors will disappear, i.e. more than half of the companies analysed by Gartner the previous year.
The leaders are then far away and the barrier to entry is high. The market is about to complete its consolidation: “Winner takes it all” (or almost).
After 2018: maturity?
At the midpoint of the decade, the trifecta that we have seen for the past five years is already in place. In 2018, Google, AWS, and Microsoft will all find themselves in the top right-hand quarter of the leaders for the first time.
Since then, the pack has been split in two: in addition to the American hyperscalers comfortably installed in the top right quadrant, the bottom left quadrant of “niche players” brings together the group of pursuers in 2 categories:
- The 20th century glories IBM and Oracle back in the game
- The new Chinese players Alibaba and Tencent (which came last in 2020)
These 7 actors have been following each other for the past four years in a hierarchy that seems complicated to change, especially when you get closer to the top of the ranking.
Today, AWS and Azure seem to be indisputable as their adoption by companies, for different reasons, remains a fundamental trend. Google is slow to catch up in terms of profitability even though GCP has a recognized technology brand and stack.
Here are a few criteria that could eventually upset the established order:
- Reliability (availability & security)
Although the breakdowns that emerge in CSPs are often limited in time and impact, security concerns are nevertheless emerging. They concern Azure in particular after a few complicated months in 2021 (successive faults in Cosmos DB, AD, ACI).
Gartner has been alerting its customers to these aspects of Microsoft for three years (2019, 2020, 2021).
The poor relation today in terms of services provided to users. Although CSPs regularly make announcements concerning their greenhouse gas reduction or green electricity generation objectives, few offer their customers the ability to monitor their carbon footprint.
Azure and Google have recently provided specific services on this subject but the silence from AWS today is deafening.
CSPs require a significant investment in terms of technology watch and skills. Services are multiplying and expertise in the market is limited and in demand. The choice of a CSP could be influenced by the ability to find the right human resources in the market.
Setting up a public cloud is very expensive. In this respect, not all the members of the Quadrant in 2021 are in the same boat: What can the future hold when Oracle, for example, “invests as much in one year as AWS does in one week in the last quarter of 2020”?
See you in 10 years to see what the Quadrant of 2030 will look like!