Big data drives 47% growth for top 50 public cloud companies

Big data analytics are driving rapid growth for public cloud computing vendors with revenues for the top 50 public cloud providers shooting up 47% in the fourth quarter last year to $6.2 billion, according to Technology Business Research Inc.

The New Hampshire-based financial and technical research firm says the broader public cloud market, beyond just the top 50 vendors, grew 25% from the fourth quarter of 2012 to the fourth quarter of 2013 to be a $15.1 billion market.Those figures are in line with estimates from firms such as IDC, which said the cloud was a $47 billion annual industry last year and will grow to be a $107 billion annual industry by 2017. A

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Perhaps the most surprising result in TBR's latest figures are the extent to which public cloud providers are using big data to drive their own operations, get new customers and expand product portfolios.

TBR's research encapsulates companies across the IaaS, SaaS and PaaS markets and vendors from each of these categories are using big data to drive their operations. On the SaaS side, companies like Salesforce.com and Box - which is attempting to turn more into an enterprise collaboration tool than just simply a cloud storage feature - are using big data analytics tools to track how customers are using their products. "Public cloud vendors can leverage usage statistics such as seats deployed, data stored, modules used, how frequent usage is, and how people are accessing the tools, i.e mobile vs desktop," wrote TBR senior cloud analyst Jillian Mirandi in an email. Doing so allows these providers to quickly resolve customer issues, mitigate potential renewal threats, and use the data to upsell to existing customers and cross-sell to new companies that are similar to their existing customers.

On the IaaS front, vendors such as Amazon Web Services, Microsoft, Rackspace and GoGrid are partnering or building out their big data platforms that customers can use on demand. These companies are offering Hadoop and other NoSQL databases as a service - meaning customers can spin them up, use them and pay based on the amount of usage. Meanwhile, PaaS companies like IBM for its Watson and BlueMix and HP for Vertica and Autonomy products are opening up their APIs to cater more to big data analytics tools.

Another trend TBR identified is the somewhat cooling of merger and acquisition activity in the market during the past few quarters. That could be changing however as companies like IBM build on their existing M&A strategy (IBM recently bought Cloudant, for example), and companies like HP and Cisco make major pushes in the public cloud market and may turn to acquisitions to fill out their portfolios.

Overall, public cloud vendors are expanding their relationships with consultants and system integrators to specify their platforms for specific vertical markets, Mirandi notes. Other public cloud vendors are expanding their channel market sales. These "ecosystem" approaches as TBR describes them are designed to cast the widest possible net for public cloud providers to reach customers across different industries and make customers they do bring on "sticky" to their platform.

These moves point to the continued maturity of the public cloud market from a business and sales perspective, and reflect the more complex strategies vendors are taking to increase their sales and continue driving growth. As that happens, technical challenges related to security, integration and a broader shift in how public cloud usage changes the IT department are still challenges that are being worked on in the enterprise.

Senior Writer Brandon Butler covers cloud computing for Network World and NetworkWorld.com. He can be reached at BButler@nww.com and found on Twitter at @BButlerNWW. Read his Cloud Chronicles here. A

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