Monday, 04 February 2019 10:16

AWS, Azure continue to lead the cloud pack: Canalys

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AWS, Azure continue to lead the cloud pack: Canalys Pixabay

Cloud services Amazon Web Services and Microsoft Azure both recorded strong growth in the final quarter of 2018, as the adoption of cloud infrastructure showed no sign of slackening, the technology analyst firm Canalys says.

The company said its latest estimates showed that AWS earned US$7 billion in revenue in the quarter, a rise of 46% year-on-year, while Azure pulled in US$4 billion, a much larger rise in percentage terms, coming in at 76%.

The year was one of rapid growth, Canalys research analyst Daniel Liu said. "...businesses accelerated digital transformation projects and workload migration [during the year]," he said. "This is set to continue in 2019, with more customers adopting multi-cloud strategies, including hybrid IT.

"AWS maintained momentum due to traction from its enterprise customers, while Microsoft's progress benefits from its longstanding hybrid IT initiatives, taken up by its large base of on-premise customers."

Pushing both companies ahead was their increasing investment in data-centre infrastructure. Financial reports showed a rise in capital expenditure, including the purchase of property and equipment or facility assets.

canalys cloud

Canalys said AWS had 60 cloud infrastructure locations worldwide with 12 more being built in Bahrain, Hong Kong, Italy and South Africa. As a result of this activity, Amazon's Capex reached US$26 billion in 2018 though the growth rate slowed to 7% year-on-year.

In the case of Microsoft, Capex reached US$14 billion in 2018, an increase of 64% year-on-year. The company has 54 cloud regions globally, and another 10 in Western Europe and Africa in the pipeline.

The company said the need for data sovereignty, lower latency and higher performance, plus competition, was driving cloud providers to increase infrastructure investment and bring data centres closer to customers.

"The investment needed to build new interconnected cloud data centres is huge, and due to the constant pressure to optimise data centre operating costs, refresh cycles are shorter as they drive innovation," said Liu.

"Cloud providers are under pressure to be profitable and have to manage Capex. The signs are they are currently focusing more on capacity utilisation, which will be reflected in their Capex numbers in the first half of 2019. This will impact infrastructure and component suppliers in the short term."

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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