Cloud infrastructure spending surges

Spending on cloud computing increased by 37 percent in 2019, with organizations around the world splashing out a record $107 billion for cloud infrastructure. That’s according to a report from Canalys, which suggests more is being spent on migrating software and data from on-premises hardware to the cloud, where it can be accessed from any device, anywhere.

Most of the spending is funneled towards the top four hyper-scale cloud service providers, which collectively accounted for 61 percent of the total market in 2019. Amazon Web Services (AWS) was the leader with 32 percent, followed by Microsoft Azure with 17 percent, and in third place the fastest growing service provider, Google Cloud, with 8 percent of the market.

Canalys analyst Alastair Edwards credits the increased spending to the fact that a range of organizations—from financial services to healthcare— are effectively becoming technology providers.

"Many are using a combination of multi-cloud and hybrid IT models, recognizing the strengths of each cloud service provider and the different compute operating environments needed for specific types of workloads," said Edwards.

Crypto in the cloud

Spending is likely to continue increasing to reach an estimated total of $284bn in 2024, according to the report. And the uptick of investment is likely to bring with it more innovation.

One area being pursued by cloud vendors is blockchain, with Oracle, Amazon, and other major players now linking Blockchain as a Service (BaaS) platforms into their cloud offering to help enterprises manage cloud data more effectively.

At a grassroots level, these incumbents are threatened by a small group of startups that claim their blockchain-based cloud solutions can offer cheaper and more secure services.

Most famous is Filecoin, whose 2014 whitepaper detailed a system that uses blockchain to reward those who rent out unused storage on their computers with cryptocurrency. The idea raised over $200 million within 30 minutes in a record-breaking ICO in 2017, and five years later in December 2019, the testnet was finally launched.

Competing vendor Storj Labs launched its own offering, Tardigrade, in November 2019. This aims to take down Amazon’s AWS S3 cloud offering with a service that claims to be less than half the price and even more secure.

While the future of decentralized cloud providers may be bright, they have a long way to go before they can take on the likes of AWS.