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Amazon’s Rule Over the Cloud: Good for Colocation Providers?

By: Blair Felter on November 8, 2017

The cloud market continues to grow, driven primarily by Amazon Web Services’ (AWS’) ever-growing market share. TechCrunch covered AWS’ cloud infrastructure explosion in a recent article, citing findings in Synergy Research Group’s Q3 cloud market report.

Highlights of Synergy’s Report:

  • Overall, the cloud market is growing by 40% per year
  • AWS occupies 35% of total market share
  • AWS market share remains bigger than its next five largest competitors

To explore Synergy’s full market analysis, check out their press release.

Naturally, Synergy’s findings spell good news for AWS and other large cloud service providers. But they may also shed light on an even brighter future for colocation providers.

The Role of Service Innovation in Cloud Market Growth

Examining the driving factors behind the cloud’s explosive growth reveals that rising adoption and spending may be only the tip of the iceberg. A continued effort to innovate and expand services is enabling large providers to meet a broader scope of demand, especially since more and more companies are implementing hybrid IT and multi-cloud environments.

AWS exemplifies this forward-thinking perhaps better than any cloud services provider. Their recent partnership with VMware allows them to tap into the software provider’s large enterprise customer base, better enabling businesses to spin up public cloud environments and shift workloads to and from the cloud. Google just followed suit by partnering with Cisco to accomplish similar goals.

Bottom line — Service innovation and expansion at the provider level underscore one universal fact: Enterprises need workloads to move seamlessly across different types of architectures and, increasingly, within hybrid infrastructure environments.

Why This Is Good for Colocation Providers

As hybrid IT gains momentum, so does the value of colocation. In fact, a recent analysis from Frost & Sullivan found that 68% of businesses include colocation as a key component of their hybrid IT environment, and 70% plan to increase their colocation deployments over the next two years. Not only do colocation data centers allow businesses to house infrastructure offsite closer to strategic markets and user bases, they also streamline connections to public cloud environments, helping these businesses to access cloud-based applications and data faster and more cost-effectively. For these reasons, colocation providers should be licking their chops as giants like AWS make it easier for businesses to create these multi-cloud architectures.

The increasing value of colocation to hybrid IT also presents a massive opportunity for colocation providers. Never has there been a better time to analyze and enhance colocation solutions, services and operations to meet the needs of businesses.

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