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Battery Ventures’ State of the OpenCloud 2022 report examines the cloud infrastructure and open source software landscape and provides operational best practices for cloud companies.
Cloud giants such as Amazon Web Services (AWS), Microsoft Azure and Google Cloud have demonstrated significant growth sustainability and profitability at scale despite the current macroeconomic environment. Billion dollar companies like Databricks (a Battery portfolio company) and Snowflake are built on top of these huge cloud vendors, and there is a lot of room to grow as digital transformation accelerates across industries and more workloads shift to the cloud.
Heavy cloud growth
Four major infrastructure software companies (MongoDB, Confluent, Elastic, and Splunk) had at least 72% and as high as 200% cloud revenue CAGR from 2018 to 2022. On-premises CAGR, on the other hand, ranged from 4% to 55%. %.
Overall, Battery predicts that cloud spending currently represents about 25% of the total $919 billion IT market spend by 2022, a share that will undoubtedly grow in the months and years to come given the potential for market disruption. Amid mounting pressure to improve productivity and efficiency and a high-inflation environment, Battery predicts we will see an incremental increase in cloud adoption across every industry and economy.
“Many cloud companies are showing robust growth and even profitability as the broader IT market remains relatively under-penetrated by cloud; there is still plenty of room to grow,” said Danel Dayan, Battery vice president and one of the report’s authors.
“While it remains to be seen what will happen in the technology industry in the coming months, given the downturn in the market, we are confident that the cloud and open-source software will soon transform industries in ways we have never seen before. Dayan added.
Methodology
The Battery Ventures 2022 OpenCloud report is based on publicly available data from Gartner, Pitchbook, the US Bureau of Labor Statistics, CapIQ and corporate earnings reports. (Battery investments and outputs are listed here.)
Read the full report of Battery Ventures.
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