By KK Khooi, Founder, KH Datagate
The past few years has seen digitalisation grow at a rapid pace from multi-national conglomerates to one-man show businesses. The need to be connected digitally at all times is now clearer than ever before and this has driven adoption rates which in turn has led to an exponential growth within the cloud and cloud technology sectors.
In fact, the global cloud market is now valued at around half a trillion US dollars and is already poised to climb to close to a trillion US dollars by 2026. Locally here in Malaysia, the potential for market growth is equally promising. The total addressable market locally is valued at 1.4 billion US dollars split across four main sub-segments namely; cloud service, storage, server and hyperconverged infrastructure.
This is a number that could rise further given the increase in digitalisation ad more enterprises and business begin to realise that digitalisation and cloud adoption are must haves and not business luxuries.
Essentially what we envision is that at a global level the adoption of cloud and specifically Edge Cloud solutions will rise rapidly both in terms of the sheer number of adoptions as well as the vast spread of adoption across the globe.
Worldwide spending on compute and storage cloud infrastructure was estimated to be 71.8 billion US dollars in 2021. Current forecast indicates a 12.4% CAGR (Compound Annual Growth Rate) from 2021 to 2025 resulting in a market size of 118.8 billion US dollars in 2025. This is just within the compute and storage sub-segment, when taken at a whole the global cloud industry is well and truly a juggernaut.
At a local level, we believe that the goal should be to create an encouraging, facilitating and open market that is conducive to unlocking the full potential of the market.
Managed Service Providers (MSPs) will play an increasingly important role in accelerating enterprises’ transition from on-premises to edge cloud, driving the emergence of a cloud provider in every city.
Due to issues such as latency and a shortage of equipment, many enterprises don’t want to be dependent on their own data centers and their own people to manage their data. In addition, compliance often dictates where data can be stored. Enterprises are in need of solutions to help them get to a cloud model, and MSPs who are close by can provide those services.
I believe we will also see more Value Added Resellers expanding their services offerings like MSPs, with a focus on providing complete solutions or an as-a-service model. With technology becoming more fragmented, many enterprises don’t want the hassle of dealing with many vendors and instead will favour easy solutions from one source. That, along with the increased pressure for on-demand, agile services, will lead more and more enterprises to go with MSPs and other channel partners to put together complete solution packages, thereby providing tremendous value and enabling growth in the long run.
How can we unlock this potential? Like any other advanced technology, consumer and user understanding is key. Businesses and enterprises must be educated on the benefits and the processes of migrating to the cloud – whether it be for storage or computing.
Personally, I believe that there is still a significant gap in the market in terms of fully comprehending the potential of cloud both from an efficiency perspective as well as a versatility of application standpoint. This is especially so with smaller or more traditional organisaitons. Often times, key decision makers can tend to be out of the loop when it comes to cloud functionality and application and this can pose a serious stumbling block to the sectors growth.
The other factor that does play a role is naturally a monetary one. Economies of scale and innovation in tech efficiency are improving this situation but there can at times still be a perception that cloud can be a costly investment. This to a certain extent also stems from a lack of understanding and education with many not seeing the investment cost from the right perspective.
Additionally, there already exist cloud solutions that are even more cost effective, adopting a more OpEx focused approach rather than being CapEx heavy. Approaches that only charge users for what they use rather than high upfront charges result in much more manageable investments and costings. However, what is required is for users and potential users to learn this and truly understand how this could be beneficial to them.
I believe it is extremely important from a purely industry growth perspective for key decision makers whom may be outside of the IT department to understand the potential of cloud and in a longer-term adopt cloud skills. This will help industry players more easily convince and convert businesses to migrate to the cloud.
But the benefits go beyond the market growth, as businesses become more fluid and dynamic key decisions and usage of cloud functionality will divest from being solely driven by the IT department. Other departments and decision makers will find themselves having to make decisions involving cloud technology or interacting directly with cloud functionality. In these situations, it will be critical for these individuals to understand the nuances of cloud.
