Story image

Channel partners growing in importance for cloud services

07 Feb 2019

There’s no surprise that the global cloud infrastructure market had another booming quarter in Q4 2018.

According to new data from Canalys, spending surged 46 percent to reach almost US$23 billion, while total outlay on cloud infrastructure in 2018 surpassed $80 billion - up from $55 billion in 2017.

Canalys principal analyst Matthew Ball says this makes it one of the most important sectors in the IT industry, not just by the rate of growth but also its expanding size.

In terms of the cloud service providers, Amazon Web Services (AWS) maintained its dominance in Q4 2018 with an unchanged 32 percent share of the market. Meanwhile somewhat further back was Microsoft Azure, although the company did manage to grow its share to 16 percent from 14 percent a year earlier.

Google Cloud reached 9 percent market share for the first time, while Alibaba Cloud retained its 4 percent share. The top 10 cloud service providers was rounded out by IBM, Salesforce, Oracle, NTT Communications, Tencent Cloud and OVH.

“Cloud infrastructure services provide the core components needed to support businesses’ digital transformation initiatives around building new customer experiences, deploying IoT to transform processes, using big data and analytics for better insights, and embedding machine learning and AI for automation,” says Ball.

“Market dynamics have changed over the last 12 months, with more businesses opting for multi-cloud and hybrid-IT environments to use the strengths of different cloud service providers and deployment models dependent on application and data requirements, compliance, cost and performance.”

Canalys chief analyst Alastair Edwards says channel partners are benefitting from this huge growth in the market, with roles like understanding customer requirements, recommending services, deployment and integration, as well as simplifying the billing and management of multiple cloud services growing in importance.

“Cloud service providers are placing greater emphasis on building channel programs to support the growing network of partners beyond the largest systems integrators, especially as they extend to mid-market and SMB customers,” says Canalys Edwards.

“Canalys expects the share of cloud business handled by or with channel partners to increase in 2019. Cloud service providers must therefore find ways to improve their own differentiation to partners and raise the maturity of their channel models.”

Moving forward, Canalys says there will be a greater focus on rewarding partners for developing unique services on top of cloud, driving customer adoption of cloud services, and maintaining specialist expertise around specific cloud deployments like SAP HANA, analytics, or security.

“Cloud service providers need to build trust with channel partners and not implement initiatives or change terms and conditions that drive more direct sales,” says Edwards.

“Microsoft is the current dominant force in the channel for cloud services, through the continued expansion of its Cloud Solution Provider (CSP) program. But as it offers more direct purchasing options to Azure customers through its new Microsoft Customer Agreement, its partner strategy faces increased scrutiny. This creates an opportunity for rivals to exploit growing uncertainty among Microsoft’s partners.”

Enterprise cloud deployments being exploited by cybercriminals
A new report has revealed a concerning number of enterprises still believe security is the responsibility of the cloud service provider.
Pure Storage expands enterprise data management solutions
It has integrated StorReduce technologies for a cloud-native back up platform, and expanded its data fabric solution for cloud-based applications.
HPE launches new real-time processing edge platform
The platform is said to help communication service providers (CSPs) to capitalize on data-intensive, low-latency services for media delivery, connected mobility, and smart cities.
‘Digital twins’ entering mainstream use sooner than expected
The term ‘digital twin’ may sound foreign to some, but Gartner says it is rapidly becoming established among modern organisations.
Infinera launches new ‘disruptive’ network architecture
The new end-to-end network architecture is said to enable instantly scalable, self-optimizing networks that adapt to the demands of specific users and applications.
Survey finds DC managers want more efficiency, not horsepower
More servers and more CPU power used to be the answer to boosting data centre performance, but it appears this is no longer the case.
DOCOMO ranked world's top mobile operator in 5G SEP applications
NTT DOCOMO has been ranked the world's leading mobile operator in terms of applications for candidate standard-essential patents.
Nlyte celebrates record year and new board chairman
The company recently announced a strong 2018 calendar year after adding more new customers than any other year in its 15-year history.