The global market for big data and cloud technologies is developing rapidly, but it is still very young, as there is a lot of data, and available analysis tools are not always effective enough to either sift through the data or produce valuable results.
Still, the full scope of the given market’s snowballing growth was revealed in a recent report by MarketsAndMarkets, which reports that the global big data market is set to grow from $138.9 billion in 2020 to $229.4 billion by 2025. The Compound Annual Growth Rate of 10.6% during the forecast period is a clear indicator of the demand companies are experiencing to increase operational efficiencies and reduce costs through the use of Big Data.
It is predicted that the major growth factors of the given market will include the increasing use of IoT devices by organizations, the mounting availability of data across organizational structures for gaining deeper insights into market environments to remain competitive, and increasing government investments in big data for enhancing digital technologies.
Big Data Helped IT Giants Stay Afloat in 2020
Large companies around the world have been working with big data for years and are taking active roles in the development of the given market to have an edge in the commercial side of the matter. IBM, Amazon, Microsoft, Google, SAP, Oracle, all of the giants of the IT world are racing to develop the best big data processing solutions. Understandable, considering the hundreds of billions of dollars at stake.
IBM is offering its Db2 software package line for a variety of data analytics, Amazon has the AWS toolset for cost effective data analysis, Microsoft is expanding the Azure lineup that is being described as the best-in-class machine learning toolset, Google has the Cloud product line for improving decision-making, SAP offers the HANA series of analytics tools, etc. The market is brimming with solutions and competition is only getting stiffer.
As an illustration of the dynamics of the big data market, Microsoft suffered minimal impact from the pandemic in its diluted earnings increased to 23% at $1.40 per share in Q3 of 2020. At the same time, Google experienced a 14% jump in share prices, while Amazon reported sales growth of 37%, topping estimates, and IBM posted a 1.87% share price increase.
The Pandemic Fueled Demand For Data Storage Solutions
The data itself and the cloud technologies for their storage and processing were always in demand even before the pandemic. However, the current realities of lockdowns and restrictions have accelerated this demand. According to Canalys, the global cloud computing market was estimated at $36.5 billion in the third quarter of 2020, which is $9 billion more than in the same period last year and $2 billion more than in the second quarter of the year.
Amazon Web Services became the leading provider of cloud services with a 32% market share as the company’s business increased by $2.6 billion in the third quarter compared to last year and continues to grow.
Microsoft is pushing forward with its Azure cloud computing business that occupies a 19% market share. In the third quarter of 2020, Azure saw a 48% increase in revenue.
Google Cloud and Alibaba Cloud services account for 7% and 6% of the global market, respectively. That being said, Alibaba’s business is mainly focused on the Chinese market, where cloud computing is supported by the government. The company is a leader in services in the Asia-Pacific region and is aggressively expanding into mainland continents.
The remaining 37% of the global cloud technology market is mostly occupied by Fastly, Cloudflare, Salesforce, and others that are distinguished by narrower niches and highly specific products.
In the coming years, the coverage of the 5G mobile network is expected to develop rapidly around the world, further driving growth for key cloud service providers. Companies are already partnering with mobile operators to deploy their cloud technologies in win-win partnerships.
Decentralized Data Solutions May Overshadow The $14 Billion DeFi Market
Cloud computing is a model for supporting data warehouses, computing, network and other IT resources, essentially segregating such a class of technologies into an automated workspace on the internet. The technology allows both private users and companies to store, process, transmit or broadcast any data. The process of verifying the input data is an essential part of this market, and it mainly relies on decentralized oracles. Legacy data economies, however, depend on centralized architecture to verify and validate data, whereas a decentralized data economy is more open access and peer-to-peer, with an added measure of token economics kicked in through the blockchain: participants are rewarded for providing accurate, ‘good’ information and punished for providing inaccurate, ‘bad’ information.
This makes these new decentralized big data solutions, like oracles, a new interesting investment instrument to look closer at. Industry resources, such as CoinGecko, have already noticed this trend and are monitoring big data projects as a niche that can possibly become the “next big thing” that will overshadow even the $14 billion decentralized finance market.
To illustrate the importance of decentralized data solutions, the Kylin Network – a provider of oracles and data validated feeding services, received a grant from the Web 3.0 Foundation within less than a week from the grant application stage to its approval. On October 29, the Kylin Network, created by Kylin Labs, was officially listed on the Web3 Grant List and began its development in full force with the first PoC product, which is expected to be released in November of 2020.
Supported by large investors such as Digital Strategies, SigNum Capital, and Moonrock Capital, the project plans to launch a full-scale decentralized data infrastructure next year allowing DApp developers and users to easily coordinate and manage their data needs. If the architecture that Kylin proposes finds use, it is very possible that decentralized data solutions will become mainstream by 2022.
Marked Up For Portfolios
The big data market will develop and its capitalization will grow with the spread of 5G and the use of oracles that will be acting as major catalysts. Investments in the market are thus becoming attractive in the medium term, considering that the stocks of Microsoft and Alibaba are less risky in the cloud computing business. Adding shares of both companies to portfolios is a sure way of reducing country-related risks and increasing diversification.
Amazon and Google are also deserving of attention, but the risks of antitrust proceedings are high, making investments in the shares of these companies more suitable for investors with more aggressive strategies. Still, investors in Microsoft stocks will be receiving dividends with a yield of about 1% in 2020, considering that the company is the only one that pays dividends of all the aforementioned.
Big data is not the next big thing – it is the big thing. In separate segments it is no more than services, but combined – it is the power that is driving not only the internet of today, but the Web 3.0 of tomorrow. New developments such as decentralized oracles will be driving big data market growth for years to come and it is more than likely that IT companies have not even yet scratched the surface of what big data is capable of. It is illustrative, indeed, of what Kylin Network’s CEO said recently during their seed round investment announcement: “we are forming the fibre that connects the real world to the blockchain and we can’t wait to see the universe of imaginative use cases that will result”.
Disclosure: The writer does not have any relationship with the companies or people mentioned. This article is educational in nature and does not represent financial advice.
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