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    Why Hyperscale Cloud Providers Are Gobbling Up Marketshare

    By
    Chris Preimesberger
    -
    April 11, 2017
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      Hyperscale.Q4.2016-2

      If, as it’s been described, 80 percent of the wealth of the U.S. is held by less than 1 percent of the population, there are parallels to this inequity in the data center world.

      According to new research released April 11, more than two-thirds of the key cloud service markets are owned by only a couple of dozen major-league players.

      New data from Synergy Research Group shows that hyperscale cloud-service operators are quickly growing their share of key cloud service markets, which are themselves growing at impressive rates.

      The new research has identified 24 companies that meet its definition of hyperscale.  
      Hyperscale cloud-service operators typically have hundreds of thousands of servers in their data center networks, while the largest, such as Amazon and Google, have millions of servers.

      According to Synergy, in 2016 those companies in aggregate accounted for 68 percent of the cloud infrastructure services market (IaaS, PaaS, private hosted cloud services) and 59 percent of the SaaS market.

      In 2012, those same hyperscale operators accounted for only 47 percent of each of those markets.

      Those 24 hyperscale operators now total about 320 large data centers in their networks, with many of them having substantial infrastructure in multiple countries.

      The companies with the broadest data center footprint are the leading cloud providers: Amazon, Microsoft and IBM. Each has 45 or more data center locations with at least two in each of the four regions (North America, APAC, EMEA and Latin America).

      The scale of infrastructure investment required to be a leading player in cloud services or cloud-enabled services means that few companies are able to keep pace with the hyperscale operators. They also continue to increase their share of service markets and account for an ever-larger portion of spend on data center infrastructure equipment–servers, storage, networking, network security and associated software.

      “Hyperscale operators are now dominating the IT landscape in so many different ways,” said John Dinsdale, Chief Analyst and Research Director at Synergy Research Group. “They are reshaping the services market, radically changing IT spending patterns within enterprises, and causing major disruptions among infrastructure technology vendors. Our latest forecasts show these factors being accentuated over the next five years.”

      Synergy’s latest hyperscale cloud market data is available as a standalone data file or as part of an annual subscription. Some details can also be found in the Complimentary Reports section of Synergy’s website.

      Chris Preimesberger
      https://www.eweek.com/author/cpreimesberger/
      Chris J. Preimesberger is Editor Emeritus of eWEEK. In his 16 years and more than 5,000 articles at eWEEK, he distinguished himself in reporting and analysis of the business use of new-gen IT in a variety of sectors, including cloud computing, data center systems, storage, edge systems, security and others. In February 2017 and September 2018, Chris was named among the 250 most influential business journalists in the world (https://richtopia.com/inspirational-people/top-250-business-journalists/) by Richtopia, a UK research firm that used analytics to compile the ranking. He has won several national and regional awards for his work, including a 2011 Folio Award for a profile (https://www.eweek.com/cloud/marc-benioff-trend-seer-and-business-socialist/) of Salesforce founder/CEO Marc Benioff--the only time he has entered the competition. Previously, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. He has been a stringer for the Associated Press since 1983 and resides in Silicon Valley.

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