5 Key Takeaways from Microsoft Cloud and Hosting Summit
I recently had the pleasure of attending the 2017 Microsoft Cloud and Hosting Summit to connect and build relationships with technology and cloud industry peers, as well as share ideas on how to build new cloud services, drive innovation and create new business opportunities. The event was full of insightful keynote sessions, breakout tracks, workshops and networking opportunities that allowed attendees to join together and forge new ideas, services and partnerships to advance cloud hosting.
This year’s event attendee roster was reflective of the current state of the market. Of the 488 partners in attendance, 70 percent were first time attendees—showing the dynamism of this ecosystem. Many of these fresh faces (41 percent) were also notably MSPs and small or regional IT service providers that are finally ready to consider cloud.
I’ve never doubted the demand for cloud would remain steadfast and this event emphasized how the market continues to grow rapidly as more and more enterprises embark on a cloud driven digital transformation of their core business. Here are some of the key growth numbers further underlining the unwavering stature of cloud and Microsoft’s continued innovation within the space:
- 30 percent year-over-year (YoY) growth in Microsoft’s Hosting business
- 49 percent YoY growth in Microsoft Office 365 with 13 million seats across 2 million customers and an additional 400 thousand seats per month via cloud computing service providers
- 26 percent YoY growth in SQL Server
As a managed services provider and Gold Partner for Microsoft, it was invigorating to join our Navisite partner of more than a decade to discuss the “digital transformation at work” and the trends shaping the cloud demand of tomorrow. While it’s difficult to capture the collaborative energy onsite, here are some of the key insights shared that provide a look into the plethora of knowledge shared around cloud:
- Artificial Intelligence, machine learning and cognitive services remain all the rage: To turn these “buzzwords” into reality, Microsoft is working rapidly to democratize AI through a set of Azure cloud services. . Overall, they called for a need to rethink how partners can start to leverage Azure in a more fundamental manner in their own development, as part of broadening exposure to these innovative services. At Navisite, we are committed to implementing long-term strategies to support AI, machine learning, cognitive services and more.
- Managed services are where all the “action” is, with 70 percent of revenue opportunity above core infrastructure: As cloud complexity continues to be a challenge for organizations, managed cloud services are a critical part of any successful cloud strategy. Our team at Navisite continues to expand our Azure portfolio progressively with services like Azure SQL Database, ExpressRoute and more. Beyond the infrastructure, a robust set of Professional Services is increasingly a critical success factor, currently accounting for 25 percent of hosting/cloud services budgets in 2017. The next generation of managed cloud services are a growth opportunity and businesses of all sizes will require professional services support such as cloud integration services, cloud transformation services and more.
- Azure is being packaged in solutions with focus on enablement and reducing adoption friction. As such, partners need to think about aligning their offerings with these solutions, including key areas such as backup, disaster recovery, monitoring, and cloud security—all of which are experiencing strong YoY growth.
- Hybrid Cloud continues to gain momentum. The reach of hybrid cloud is being driven by the need for more flexibility and a greater ROI and Microsoft continues to reinforce its credentials in this area. For example, Navisite will be launching ExpressRoute connections between our VMware clouds and Azure.
- SQL Server is now a broader platform (not just a database): SQL Server and Azure SQL Database were designed to bring cloud, data and intelligence together with support for R, high performance computing and cross-platform support. With these immense capabilities, there is tremendous opportunity for partners to re-energize and modernize their own database management practice around this. SQL Server 2016 and Azure SQL Database are starting to take over the top spots in performance, but also integration across cloud and open source projects. In fact, SQL Server 2016 is has been the leader for two years in a row in the Gartner Magic Quadrant for database management systems and continues to demonstrate its value in enterprises across diverse industries.
In addition to lively discussions, Microsoft also released the results of the “Hosting and Cloud Study 2017 – Digital Transformation Opportunity for Service Providers: Beyond Infrastructure.” A Microsoft study, commissioned through 451 Research, this study offers data-driven insight into the cloud market and technology partnerships. Here is a preview of some of the key findings:
- The hosting and cloud market is ripe with opportunity: The worldwide hosting and cloud market size is expected to experience 20.3 percent CAGR growth from 2010 to 2020.
- There are a variety of key drivers and motivators propelling the digital transformation: Cybersecurity protection (66 percent), mobile platforms/applications (65 percent), customer experience management systems (65 percent) and data integration across multiple platforms (64 percent) are top catalysts for the digital transformation within organizations.
- Trusted expertise is the key to successful partnership on the path to digital transformation: It takes a village to “raise” a successful cloud strategy and the study shows the partner ecosystem is expanding to meet the complex requirements of the digital transformation. Among the top qualities buyers seek in a partner, trustworthiness (44 percent) and experience (41 percent) were highly valued.
- “Traditional” managed services for cloud continue to have a place in the digital transformation: Of the more traditional managed cloud services, backup and recovery (69 percent), archiving (55 percent), infrastructure/application monitoring and alerting (52 percent), as well as disaster recovery (51 percent) continue to drive adoption.
Matching the “People” to the “Product”
From the many advancements shared at Microsoft Cloud and Hosting Summit, it is clear there is a new paradigm and model of thinking.
Within the industry, we must now push ourselves to not only apply this new way of thinking to products and services, but also to the people implementing them.
We at Navisite look forward to innovating as individuals and as a team, so we may continue to deliver superior support for our valued clients and partners as they navigate their own digital transformation.
For the latest industry insights, event updates and cloud news, follow Sumeet Sabharwal on Twitter @sabhas. You can also subscribe to our blog by entering your email address into the form in the right side of this page and receive a weekly roundup in your inbox every Friday.