The world's top seven hyperscale cloud providers are reshaping the IT channel as we know it, according to Canalys, with industry trends increasingly guided by partnership decisions of the "super seven".
Canalys president Steve Brazier used his keynote at this week's conference in Perth to illustrate how Amazon Web Services, Microsoft, Google, Facebook, Alibaba, Tencent and Baidu are rewriting the rules for the IT supply industry.
"In Microsoft's case, they are working with HPE, Dell EMC, Lenovo and Cisco for Azure Stack for edge computing," Brazier said.
"Cisco is customising its Nexus switches for Azure. HPE has invited Azure to join its Cloud 28 alliance," he added.
"Huawei has been making huge investments in cloud, mainly to run Microsoft services – providing Microsoft with access to China but also giving Microsoft additional capacity."
Brazier pointed out that Microsoft's cloud in the UK "ran out of capacity earlier this year".
Another alliance is between SAP and Microsoft. The pair last week announced a deal that will see both companies consume one another's services, as well as jointly go to market.
The world's top hyperscale cloud provider, AWS, is also placing its bets on a number of close partners, especially VMware.
"VMware Cloud on AWS is allowing people to move applications and data quickly from off-premise to on-premise in one secure environment, which is proving popular," Brazier said.
VMware Cloud on AWS went live in the US earlier this year, with an Australian availability zone not expected until 2018.
Other AWS partnerships include the arrival of Dell EMC data protection solutions running on VMware Cloud on AWS, while Lenovo is integrating AWS' internet of things platform, Greengrass, with its ThinkCentre series to power edge computing.
"Salesforce is responding to Microsoft's acquisition of LinkedIn and the threat that might be," Brazier said.
The three major US-owned cloud firms may hog the headlines, but Chinese firms are on the march too.
"The clouds from Tencent and Alibaba are also growing very fast. You will see them now in South East Asia and we expect them to appear in most [APAC] countries in the next 12-18 months."
Alibaba Cloud opened its first Australian data centre last November.
The industry is being "turned on its head" by the purchasing power of the super seven, Brazier said.
The big three power providers – AWS, Microsoft and Google – are now buying more servers per quarter than either HPE or Dell EMC sell worldwide in the same quarter, he added.
"The scale of capital investment is simply enormous. And the component suppliers are responding to this. For example, Google was the first customer to get Intel Skylake. They got it two to three months before the commercial launch."
Hyperscale cloud providers are designing and building their own data centres architecture to take cost out.
"These cloud providers are building their own custom silicon to get lower costs and accelerate deployments This has been excellent news for the white box vendors – companies like Quantum and Supermicro - and has also been great news for the likes of Intel AMD and Western Digital.
"It has been less good news for Cisco or Juniper because these cloud providers are increasingly using generic solutions rather than custom solution inside their network."
But the hyperscalers must also overcome hurdles, Brazier added.
"The super seven face a massive capital expenditure challenge. Microsoft and AWS are spending US$2-3 billion a quarter each on building data centres."
The channel-focused analyst firm kicked off the APAC leg of its annual Canalys Channels Forum in Perth this week, the first time the regional event has been hosted in Australia.
Steven Kiernan attended the conference as a guest of Canalys.
Updated 7.00am on 7 December to remove comment that Skylake is not available on AWS. AWS announced the availability of Skylake processes for Amazon EC2 in early November.