News & Analysis

Forrester Predicts Intense Cloud Competition

In spite of the top three players cornering most of the large enterprises and government verticals, the cloud market is bound to grow, says a report

The big-3 in cloud services have already cornered the big ticket markets of government business and large enterprise needs. However, in spite of Amazon Web Services (AWS), Google and Microsoft lording over this universe, market research firm Forrester predicts that competition is just about kicking off over the clouds. 

“The global cloud market is far broader than the top players, and cloud customer choices are shaped by key considerations beyond the total number of services: specialized use cases, data sovereignty, industry cloud capabilities, and much more,” says Lee Sustar, principal analyst at Forrester in the company’s Q4 2022 report on public cloud development. 


Breadth of offerings not the only factor

In a blog post on the Forrester website, Sustar says while the sheer breadth of offerings that come from the big three might align with the needs of large enterprises and big government agencies,” however, “other cloud providers can succeed with more discrete approaches to the market around data, analytics, development, and integration.”

As more customers embrace a multicloud approach to avoid dependencies on single vendors, they’re exploring alternatives for general-purpose IT or particular workloads such as AI/ML. Customers taking this mix-and-match approach to cloud can make use of the Wave’s relative scoring according to particular criteria, Sustar says. 


Hyper-scalers are fine, but there’s more 

The Forrester research says the four-way hyper-scaler horse for market share matters as the leading players continue to invest up and down the stack for new capabilities that set the pace for the industry. Those efforts are reflected in the results of The Forrester Wave: Public Cloud Development And Infrastructure Platforms, Global, Q4 2022, in which custom silicon and wireless networking capabilities were among the differentiators. But that’s only part of the picture.

The blog post says data and analytics are the most competitive “key battlegrounds” in the public cloud market, which Forrester expects will be worth more than $1 trillion by 2026. Since small percentages of market share could make or break a cloud provider, they’re focusing on these higher-revenue data and analytics services.

“It’s more revenue to feed the never-ending hyperscaler build-out and keeps non-hyperscalers in the cloud game,” Sustar noted. “That’s good news for customers who increasingly demand services that enhance these capabilities and make them easier to adopt within their businesses.” It also pushes cloud providers beyond the traditional realm of IT operations “and into the lifeblood of customers’ organizations,” says Sustar.

The report also points out that the major cloud providers are enhancing their security services. “Security consoles that once offered little more than a convenient portal are now festooned with functionality that would please even the most cynical security operations center pro,” Sustar said adding that the approach to security varies from silicon-centric for isolation and confidential computing to multi-cloud service offerings, 

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