The four major cloud providers all have a data centre footprint in the UK, making it one of the key battlefields for market dominance.
The UK’s importance to tech companies has been in question over the past year since the Brexit vote, but the leading cloud providers have displayed a high level of commitment to the region.
Microsoft, Amazon, Google, and IBM have all opened new data centres, or UK regions over the past year, highlighting how significant the region is to their businesses.
It shouldn’t come as a surprise that the UK is a significant market for these cloud players, given that the UK’s digital industries account for 16% of the domestic output, a quarter of all exports, and generates 10% of employment.
The UK is a digitally advanced nation, one that relies upon the likes of Microsoft, Google, Amazon, and IBM to go about its daily lives.
Whilst the UK certainly needs these companies, they also need our trade. The UK is a digital leader, a route from the US to Europe and vice-versa, and many of the brightest minds come from these shores.
These companies cannot afford to turn their backs on the UK, so, with laws and regulations changing, and customer demand for greater control over data locality, these companies have chosen to expand their UK presence.
IBM’s long had a data centre footprint in the UK, and recently expanded that with new openings, whilst Microsoft, Amazon Web Services, and Google have recently joined with their own UK data centre footprints.
The UK is an important market, although it’s difficult to say how much of an impact it actually has on each company’s financial figures.
Amazon might have seen its financial results impacted by investment in new projects, but AWS yet again showed strong levels of growth, at 42% year-on-year. Microsoft had a bumper year with Azure growth at 97% in the fourth quarter and 15% year-on-year revenue increase, whilst the Google Cloud is said to have seen its deals valued over $500,000 triple in the last quarter compared to the same period a year ago. IBM posted a 15% growth rate in the latest quarter, down from 30% year-on-year growth in Q2 2016.
In terms of the overall cloud infrastructure market share, data from Synergy Research Group shows that AWS holds 34%, Microsoft 11%, Google 5%, and IBM 8%. AWS gained 1% over the last four quarts, Microsoft 3%, IBM 0%, Google 1%, whilst the next 10 lost 1% and the rest of the market lost 5%.
“The increasing dominance of hyperscale players continues to play out, with all four leading companies having cause to celebrate,” said John Dinsdale, a Chief Analyst and Research Director at Synergy Research Group. “While Microsoft Azure and Google Cloud Platform are doubling in size, IBM continues to dominate in hosted private cloud and AWS is still over three times the size of its nearest competitor. Some of the numbers are actually pretty spectacular. The year-on-year market growth rate is nudging down as we expected in such a large market, but it remains at comfortably over 40% and AWS alone generated revenue growth of $1.2 billion over the last four quarters.”
It’s clear that there’s still sky high demand for cloud computing IaaS, PaaS, and hosted private clouds, but users seem to be increasingly turning to the big players.
That’s an understandable shift, the big players continue to cut the costs of their products, they offer a sense of security and stability, and they all now have extensive enterprise experience in addition to being able to serve smaller companies. The leading cloud players have made it so that they can offer pretty much everything to any business, anywhere.
Peter Richard, Head of Products and Partnerships at Cloudreach told CBR: “The move to Public Cloud continues to accelerate: more and more enterprises are taking advantage of flexible, changeable application environments that can keep pace with the rate of change of application functionality demanded by today’s businesses.
“The evidence for this can be seen not only by the interest generated across the tech community for the AWS, Azure and GCP events, but also by the revenue growth that is seen now in both Azure and AWS, Google will not be far behind.
“We see this in our clients focus on getting things right from the first few steps on the journey to the Public Cloud as preparation for the full adoption – it truly is “Not if, but when”.”
Realistically, the UK market may not be the most important one in the world to these tech Goliaths’ that have global footprints, but the investment being made with data centres, the growing number of services made available, and the UK’s growing digital stature go together to help make it one of the key battlefields in the ongoing cloud wars.