Microsoft's Azure and Google Cloud are gaining ground on public cloud market leader AWS, according to research from Canalys.
Azure's market share was at 16 percent in the fourth quarter of 2018, up from 14 percent in the same period in 2017, while Google Cloud reached 9 percent share for the first time, up from 7.6 percent year-over-year.
Meanwhile AWS remained the market leader at 32 percent, unchanged from Q4 2017, while fourth place Alibaba Cloud also remains at 4 percent.
Rounding out the top ten providers were IBM Cloud, 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,” Canalys principal analyst Matthew Ball said.
“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.”
As a whole, the worldwide cloud infrastructure market grew 46 percent in the fourth quarter of 2018, reaching close to US$23 billion for the period.
Canalys also revealed that total spend for 2018 reached more than US$80 billion, up 46 percent from 2017, when spend came in at US$54.9 billion.
Canalys chief analyst Alastair Edwards said the role of channel partners is “growing in importance” as a direct result of these trends.
“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,” Edwards said.
“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.”
Edwards added that there will be increased focus on rewarding partners with specialist expertise around specific cloud deployments, such as SAP HANA, analytics or security; on partners developing unique services on top of cloud; and on those driving customer adoption of cloud services.
“Cloud service providers need to build trust with channel partners and not implement initiatives or change terms and conditions that drive more direct sales,” Edwards said.
“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.”
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