Amazon, Microsoft Top Enterprise Public Cloud Spend, Flexera Says

Organizations were already running to the cloud pre-pandemic, but according to Flexera’s 2021 State of the Cloud report, COVID-19 sent them sprinting into the arms of the market’s heavyweights Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). Organizations were already running to the cloud pre-pandemic, but according to Flexera’s 2021 State of the Cloud report, COVID-19 sent them sprinting into the arms of the market’s heavyweights Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). This move has in turn increased cloud spend for organizations of all sizes. The report found that public cloud spend is now a significant line item in IT budgets, especially among enterprise organizations (31%) that said they spent more than $12 million a year on public cloud services. The yearly benchmark assesses cloud adoption for insights into how organizations are progressing in their journey to the cloud. It includes a mix of public and private clouds, spend allocation, cost management, and strategies. The survey polled 750 “cloud decision-makers and users” from organizations ranging from 100 employees to more than 10,000 employees around the world and across a cross-section of organizations. It specifically asked about services run on AWS, Azure, GCP, VMware Cloud on AWS, IBM Public Cloud, Oracle Infrastructure Cloud, and Alibaba Cloud.  Following two years of a strong performance, the Flexera report found that Azure is closing in on AWS’ dominance in the enterprise market in terms of the number of large companies using Microsoft’s public cloud as well as the number of virtual machines deployed. Sixteen percent of enterprises with more than 1,000 employees said they spend more than $12 million a year on AWS, 14% said they spent that amount for Azure, and 8% for GCP. AWS continues to lead the pack with 79% of enterprise respondents saying they use the platform and 9% saying they are “experimenting” with AWS. Microsoft’s Azure was used by 76% of respondents with 11% saying they are experimenting with Azure.  However, Azure adoption across all respondents increased from 63% last year to 73% this year. By comparison, AWS’ year-over-year growth was just 1 percentage point to 77%.  While AWS and Azure are fighting it out for top spot, GCP saw the strongest growth among the top three, growing from 34% usage last year to 49% usage this year. Additionally, GCP and VMware Cloud on AWS reported the highest number of respondents experimenting on their platforms, which the report says can drive future adoption. Small- and medium-sized businesses (SMBs) that have traditionally shown more interest to vendors like VMware Cloud on AWS (11%), IBM (20%), and Oracle (15%), represent 10% or less of the market share in terms of current use. AWS dominates this sector of the market by a wide margin at 72%, which is down 2% from the previous year, followed by Azure (48%) and GCP (39%).  In terms of future interest, as indicated by the combination of the clouds they are experimenting with and planning to use, SMBs expressed the most interest in GCP (31%) followed closely by VMware Cloud on AWS (22%) and Azure (20%). Adoption of VMware Cloud on AWS, IBM, Oracle, and Alibaba Cloud continued to rise year over year. However, each one is still chosen by only a small percentage of SMBs. Although 2020 was a year characterized by constant chaos, it also provided clarity for organizations that now recognize the need for more agile and scalable IT infrastructure as a means to harden their business against future events. This is underscored by 90% of respondents that said their cloud usage was higher than initially planned. The report found that organizations are reconsidering their reservations about putting certain types of data in public clouds as more than half of respondents said they’ll consider moving at least some of their sensitive consumer data or corporate financial data to the cloud. This reflects increasing confidence in the security practices of cloud providers. But cloud migration still has its challenges.  The Flexera survey found that it remains difficult to map all of the relationships across applications, hardware, and networking devices for each service, especially in a rapidly evolving environment. Just over half of respondents reported understanding application dependencies as the top cloud migration challenge.