2020 Cloud Trends Report

Highlights by SentryOne

 

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Report: May 21, 2020

The first quarter of 2020 will forever be known for the COVID-19 pandemic. Companies across all industries have experienced various consequences. Despite current circumstances, there's more focus on transitioning workloads to the cloud than ever before. SentryOne researchers have aggregated highlights from various sources and gathered insights from a stellar round of Q1 earnings reports from Amazon and Microsoft.

Be mindful of these trends as you plan for the second half of the year. If you are considering transitioning to a hybrid or cloud-based SQL Server environment, you might find that 2020 is ideal timing, despite heavy turbulence at the onset.

 

1. The public cloud market is anticipated to grow to nearly $300bn in 2020 and to $411bn by 2022.

Source: Forrester Research

According to Forrester Research, we’ll see the public cloud market, including cloud applications (SaaS), development and data platforms (PaaS), and infrastructure services (IaaS), grow to $299.4 billion in 2020 and to $411 billion by 2022.

Cloud vendors are investing heavily in marketing, human capital, and technology to capitalize on the increased interest. IaaS vendors Amazon, Microsoft, and Google are all contributing meaningfully to this figure, as is Alibaba due to their presence outside of North America, according to Gartner, with 7.7% of the 2018 market share.

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2. According to Goldman Sachs, AWS and Azure are neck-and-neck among enterprise-level companies—Azure is more popular but AWS captures a larger share of overall cloud spend.

Source: CIODive

Goldman Sachs recently conducted a survey focused on public cloud and IaaS, with 100 IT executives from global 2000 companies responding. About 80% of the respondents’ companies had revenues above $1bn.

The following are two key findings from the survey:

  • 56 respondents indicated they use Azure and 48 respondents indicated they use AWS as their IaaS vendor
  • Only 23% of respondents have workloads in the public cloud, down from 2018

It is likely that the survey respondent pool could change each year, which would explain the dip from December 2018 versus 2019. However, it is interesting to see that in the past 3 years, the public cloud adoption rate has grown only a few percentage points on average.

Azure vs. AWS

Even more interesting, CIODive shares that 43% of this group expects to be in the public cloud by the end of 2022. That is a big jump when compared to the past few years. It begs the question of what kind of impact COVID-19 will have on these adoption figures. On one hand, there is a bigger need for cloud operations in this new environment. On the other hand, IT resources might be scarcer.

 

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3. Through 2022, 95% (or more) of applications that move to an IaaS platform will remain on that platform until modernized or replaced.

Source: Gartner

Most companies that have shifted workloads to the cloud don’t plan to revert their migration or switch cloud platforms, likely because of the cost to switch.

Long-term cloud strategy is often not a simple lift-and-shift approach. SentryOne solutions engineers have collaborated with many customers as they transition to the cloud, and the migration approach is almost always well planned and customized. This is where SentryOne CloudLifter, a suite of products that help minimize migration risk, comes in. CloudLifter helps you re-architect your data environment, validate data, document databases before and after your migration, and ensure peak performance for SQL Server databases running on AWS or Azure.

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4. Cloud vendors are starting to work together to help customers, despite being in a highly competitive market.

Source: CIODive

It is reminiscent of another competitive landscape in the late 2000s—the music marketplace. Having a Sony MP3 player and trying to determine where and how to purchase music was frustrating. You had options but it was painful to figure out compatibility, cost, and functionality—whether you were using iTunes, Zune Marketplace, or another music service. Now a lot of the music marketplaces and streaming services are device-agnostic, and they do their best to be flexible and connected because that is easier for—and expected from—customers.

We are starting to see similar flexibility and connectedness in the cloud market today, as CIODive points out, with Microsoft and Oracle connecting their cloud services to allow customers to run the same workload across each cloud platform if desired. Expect to see similar network innovations in the future as more companies adopt a multi-cloud strategy and expect interoperability.

 

 

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CIODive named this one of the top 2020 cloud trends and we couldn’t agree more—it’s a sign of cloud adoption becoming easier.

5. Google’s Q2 2020 earnings report shows that Google Cloud Platform is gaining serious ground, with +52% YoY revenue increase.

Source: Google

Although Google doesn’t splice out the Google Cloud Platform infrastructure from their cloud services (e.g., G Suite or their new conference call platform, Google Meet), the YOY revenue growth they’ve seen, from $1.8bn to $2.8bn, has been astounding. It is reasonable to expect that the more revenue and resources Google can dedicate to this business unit, the faster they will innovate and gain market share.

Similarly, Microsoft also reported in late April that their Azure platform posted +59% YoY growth.  

Google vs Microsoft

 

What’s Next? Cost and Implementation Resources

Two questions that are frequently asked after data professionals read eye-popping stats about the growth and rapid adoption of the cloud are:

  • “How much will it cost?
  • “How do we transition to the cloud?”

The answer to both of these questions is “It depends.”

There are many variables to consider when calculating the cost to move to the cloud versus the cost for your current environment. Often, as soon as a case study or example is published, the cost of a cloud solution has changed. Denis McDowell, Principal Solutions Architect at SentryOne, wrote a blog post detailing the preparation and organizational changes that need to happen with a pivot to the cloud to prevent costs from ballooning. You should also check out the in-depth case study from Gartner, produced in 2018, that focuses on a 2,500 server environment that made the switch to the cloud. The case study describes how it might take some time for a positive ROI to be realized for some organizations.

To get up-to-speed fast on the migration process and options, check out our cloud migration guides for AWS and Azure. In addition, we encourage you to schedule a free 30-minute session today to learn more about how SentryOne can help streamline your cloud database migration.