We don’t think of gravitational force when we think of the cloud. Maybe it’s time to rethink gravity when it comes to cloud computing.
The three big cloud providers recently announced their quarterly results.
- AWS had a revenue of 13.5 Billion and a growth rate of 30%.
- Microsoft Azure had a revenue of 14.5 Billion and a growth rate of 23%
- Google cloud (GCP) had a revenue of 4 Billion, and a growth rate of 45%.
Most CEO’s, boards and investors would give an arm and a leg to get these revenue and growth numbers. The overall public cloud market is expected to be around 330 Billion by the end of 2021.
According to Gartner, the total IT spend is expected to be 4 Trillion USD and growing at 8.5% annually. i.e. the cloud market is still only 10% of the overall IT spend. One could argue that this is good news. Cloud computing is growing 5 times the pace of overall IT and it has another 90% of the available market.
I ask a different question. It was way back in 2008 that AWS was launched. For something that is such a clear differentiator, why is the cloud still a meagre 10% of the overall IT spend?
I believe the answer lies in data gravity.
Data gravity is a term coined by Dave McCrory, a VP of engineering at GE Digital almost a decade ago. Data pulls everything towards itself. Applications are most efficient and cost effective when they are closest to the data.
It’s slow and expensive to move the data into the cloud.
In fact, if one breaks down the current 200 Billion cloud spend, my guess is that we will see a 80-20 distribution. It’s the digital natives – the Netflix, Spotify, Twitter etc. that drive 80 or even 90% of the cloud spend, followed by a long tail of enterprise customers. They will need a booster rocket to overcome the data gravity.
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