At Linux Academy, we love hearing the stories of success from our students and want to educate them not only on the tools behind Linux and cloud platforms, but the state of the cloud as it is today. The cloud market, as we see it today, is one of the fastest growing and most exciting sectors in our modern economy. Before we get into the factors driving this explosive growth, we want to look at the market, some of its largest organizations and the current trends that help explain why the cloud market is currently growing at a rate 5x faster than the rest of the IT industry.
The biggest players in this market are AWS, Azure, IBM and Google. These four key companies currently control 51% of the market share and are currently averaging an astounding 88% growth year to year. To put that into context, let’s look at both AWS and the rest of Amazon. If the entirety of Amazon grew as fast as AWS, Amazon, who is on track to sell around $130 billion this year, would theoretically sell over $244 billion worth of merchandise next year. That is simply unprecedented growth for any economic sector, even the IT industry. Furthermore, the total cloud market, including SaaS, IaaS and PaaS sectors, in 2016, is worth around $208 billion and is currently growing at 18% annually.
“By 2025, 80% of IT budgets will be spent on cloud architecture and 95% of all enterprise data will be stored in cloud systems.”
-Mark Hurd, CEO of Oracle, 9/19/16 at Oracle OpenWorld
We are currently in the middle of the largest aggregate shift in IT spending since the dawn of the digital age. IT managers will need to quickly identify changing risks as well as new opportunities. Management styles need to shift from traditional IT market structures to new operating philosophies that optimize business for competition and strategic growth.
Another key factor that should be noted is that the cloud shift is not just about “the cloud.” Organizations across the globe and from every sector of our economy are altering business strategies and switching to next-gen IT technology to suit the needs of consumers. The financial and banking, retail, travel, industrial, transportation and utilities sectors, as well as others in our economy today, are moving towards cloud-based architecture. The reason behind this can be summed up by looking at the modern consumer. The consumer market today wants speed, mobility and efficiency to stay competitive; companies need to bring products and services to market that fulfill the needs of these consumers at a rapid pace. But what are some of the key drivers that are producing this enormous growth?
“In the next 5 years, more than $1 trillion in IT spending will be directly or indirectly affected by the shift to cloud.”
-Gartner IT Financial, Inc.
Key Driving Factors of Growth in Today’s Cloud Market:
o Lowering Costs
One of the prime reasons that companies switch to cloud-based systems is to lower the cost of doing business. By creating more reliable and efficient systems that also include services that manage those systems, you can save a lot of money on a long-term basis. Also, when items such as replacing on-site servers every few years, maintaining an IT infrastructure and even the electricity expenses of running on-site systems are factored in, it becomes clear that a cloud-based system can drastically impact an organization’s bottom line.
Another one of the key reasons that businesses are moving towards the cloud is the ability to access vital information from anywhere in the world at any time. Mobile platforms have taken over the computing landscape and altered almost every way we conduct business. Having the right platforms in place to enable and empower your employees to make quick and decisive action is extremely beneficial.
In today’s world, having standardized and efficient business practices across all departments in a company can drastically improve work flow. Providing collaboration tools, as well as personal productivity support across an ERP platform that everyone can use is almost a guarantee of more efficiency.
The ability to grow your business quickly and scale with ease is a major factor in today’s market. In previous years, there was a hindrance on having to build or rebuild architecture, which took large amounts of time and in some cases, significant amounts of money and resources. Today the ability to scale instantaneously is an essential business need and can easily be available across all business platforms.
Effectively engaging with both internal and external customers is a key component in business success. Creating faster, more efficient avenues of information flow will almost always result in better quality decisions being made at every level of an organization. In today’s world, organizations are moving away from expensive brick and mortar infrastructure in favor of cloud-based infrastructure that allows for employees to stay connected, share information and easily work remotely from anywhere in the world.
o Speed and Agility
Almost all the five factors discussed above have one common theme: Speed. Our world is moving at an incredible pace and the ability to be quick and agile in today’s market is an absolute necessity. The flexibility to access platforms, information and resources that are easy to use, standardized and efficient is quickly becoming the architype of business process models.
The Cause and the Effect
The cause of this prodigious shift in IT spending and management is clear.
The speed at which consumers want information, answers and results is almost instantaneous and they want it 24 hours a day. Companies around the world are rushing to keep up with the newest technologies to keep their business on the forefront of their industry. Employees, managers and even top executives need to be trained continuously to avoid the dangers of being out-maneuvered by competitors. In our fast paced, ever-changing environment, we also need to be fast and flexible.
So what does this mean for you? The effect of this is that the IT job market is growing rapidly and the need for highly-trained technical employees is growing every day. Companies around the globe are constantly creating new products and services that require highly technical people to execute properly. The need for skilled employees that can navigate through all of these new systems, platforms and products is overwhelming. As I said earlier in the article, professionals in the industry need to constantly train and hone their skillset to avoid being left behind. An entirely new market is being cultivated all around us and training and education will keep you at the forefront.
Our core focus at Linux Academy is that we provide a place where students can learn, grow and become a part of a continuously evolving community. Providing high end, technical training and education to help students achieve their goals is the reason we exist. Remember, it’s important to continue learning and developing both professionally and personally. Set goals for yourself and remember why you set them. We will work our hardest to provide you with tools that help you on your learning path and make it possible for you to achieve your goals and we will always strive to bring you superior training to help you stay at your finest.
Hunter Ferrell | Financial Controller