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Experts of telecom industry started accusing the cloud of swallowing everything

Nowadays the society is highly concerned with a growing amount of large swath of communication and infrastructure applications completely swallowed by cloud-based technologies. Since most of telecom providers involved into cloud connectivity growth tend to increase Capex levels (capital spending) and bring more of intense and even rival competition, the market definitely has no reason to assume this tendency wouldn’t last a lot of time. Another thing identifying durability of this phenomenon is a wide range of application spheres: from socially oriented consumer apps like Facebook and Instagram to more formal and tailor-made communications applications, which work for development of companies’ business suites, level of security, and even Internet of Things (IoT) concepts.

One of the most recent analyses with a close focus on dominant cloud connectivity players interpreted revealed historical data on the companies’ annual pace of growth in terms of revenues, Capex and many other factors to understand who’s achieved higher results in extracting additional cloud-based value. While some leading public cloud infrastructure players demonstrate estimated CAGR of almost 30%, other service providers seem not to grow at all with a flattish graph. Experts explain this picture by a strong necessity to gain in number of users to succeed: the scale is the growth factor, so these companies have to attract new customers. This is basically the only way for some to earn profits to be able to invest in Capex. These investments, obviously, enable designing new service, which act as a must-have for generating new customers. And this vicious circle is expected to accelerate, so the providers are strongly advised to find recourses and overcome what they are facing now. Some cloud facilities’ advocates argue that with more attention attracted to 5G the rate at which everything is “eaten” will rapidly grow.

Based on the known actions of the companies who have managed to increase their market capitalization and now generally feel okay with the cloud, the analysis’ authors compiled a list of several most prominent trends. They list the following ones: growing revenues for major cloud providers, steadily increasing public cloud Capex, generally improved cash flow from operations of the major cloud providers (in sometimes dramatically), increased control of public cloud providers on their own infrastructure build-outs (they do not concede any market share to telecom). Judging by these factors, one can conclude that the cloud really eats everything. 

Most of the providers’ managers get the idea why it’s so crucial to start generating Capex investments as soon as possible to secure not only profits and market shares but also existence of the players which are about to find themselves on the edge. Colocation and cloud are growing in sync, building a win-win solution by getting services closer to end-users. The cloud is strong, and companies have no other options except for getting used to these realities. 

The rate of “swallowing” does not demonstrate any signs of going down, even during a pandemic state. Apparently, we now have reached a critical point in the development of cloud infrastructure-hosted services. The cloud players who has had a chance to adjust are now in the dominant position compared to others. And the anticipated wave of 5G networks and edge infrastructure is promised to even accelerate that trend.