The 10 Biggest Cloud Stories Of 2016

Another Thrilling, Tumultuous, Unpredictable Year In The Cloud

The cloud market continued evolving at breakneck pace in 2016 with dramatic changes in both the technology and vendor landscape.

A technology that once been relegated to the realm of science fiction – artificial intelligence -- found mainstream appeal.

Acquisitions, meanwhile, fueled more consolidation, with several cloud powerhouses gaining valuable assets to beef up their offerings. At the same time, hyper-scale public cloud providers capitalized off massive market growth, further separating themselves from a narrowing field. Some industry pioneers and enterprise tech stalwarts were muscled out of the market and had to go looking for safe harbors.

Amid all the acquisitions, high-profile failures, and new entrants, Google for the first time made its presence felt as an enterprise public cloud channel force to be reckoned with. Ultimately, 2016 will be remembered as the year that Google got enterprise cloud game.

(For more of our 2016 retrospective, check out 'CRN's 2016 Tech Year In Review.')

10. Rackspace Goes Private

Rackspace was a public cloud pioneer, but in recent years the San Antonio-based provider struggled to find its way in an industry increasingly dominated by tech giants with nearly unlimited resources. Last year, after a failed stint on the market in 2014, the strategy evolved to focus on alliances with former rivals Amazon Web Services and Microsoft Azure.

With those partnerships in place, and some early indicators of market success for Rackspace's plan of offering managed services for the world's two largest public clouds, Apollo Global Management led a group of investors who purchased Rackspace for $4.3 billion in August.

Partners said privatization might give Rackspace the breathing room it needs to figure out its strategy going forward.

9. Salesforce Becomes An E-Commerce Player With Demandware Acquisition

Salesforce offered a more than 50 percent premium on Demandware's market capitalization, and with that $2.8 billion bid became an overnight e-commerce powerhouse.

The CRM giant had already rebranded Demandware's platform as the Salesforce Commerce Cloud in time for its Dreamforce conference in October.

8. HPE, Verizon Shutter Public Clouds

For all the jaw-dropping revenue growth and still-untapped market potential, the public cloud is generating its fair share of high-profile companies that couldn't compete in the Infrastructure-as-a-Service race to commodity pricing.

In January, HPE carried out its plans to shutter the Helion Public Cloud, shifting focus to offering cloud management solutions.

Then in February telecom giant Verizon succumbed to the same pressures, and disclosed plans to decommission its own public cloud services.

7. Samsung Takes Joyent

The South Korean tech giant in June acquired San Francisco-based cloud provider Joyent, a pioneer in offering container technology in the public cloud. The deal is expected to help Samsung bolster the software and services it offers around its mobile business.

Samsung said it wanted Joyent to maintain its independence while getting its new parent company as its largest customer.

6. Oracle Acquires NetSuite

Decades ago, Oracle founder Larry Ellison helped fund a startup offering business software as a cloud service, which at the time was a somewhat novel idea.

When Oracle in July announced plans to acquire NetSuite, by that point a leading vendor of back office, accounting, and e-commerce tools to mid-market companies, Ellison's long game became apparent.

Things got messy after NetSuite's second-largest shareholder, investment house T. Rowe Price, raised opposition to the $9.3 billion asking price, but Oracle eventually pushed the deal through.

5. Microsoft's Shiny New Network

LinkedIn, the world's largest social network for professionals, was a jewel that many enterprise tech giants wanted to place in their crowns.

Salesforce was in the hunt, but Microsoft in June offered the largest bid and won the prize for $26.2 billion -- a 50 percent premium over LinkedIn's market capitalization.

Microsoft partners told CRN they can't wait for the unmatched trove of data LinkedIn possesses on the global workforce to natively populate the Dynamics CRM.

4. Facebook Launches Its First Channel Program

Social networking giant Facebook, the consumer social networking behemoth with 1.09 billion users, launched its first-ever channel program as part of an enterprise account offensive for its new Workplace product.

The collaboration, messaging and social networking solution geared for the enterprise, was launched in October with rave reviews from the initial group of partners chartered with selling the product under the company's Facebook Workplace Partner Program.

Partners, in fact, told CRN that Facebook's Workplace is less expensive and more capable than competitors like Salesforce's Chatter and Slack.

"This can become the pre-eminent social platform to the enterprise," said Tony Safoian, founder and CEO of SADA Systems, No. 87 on CRN's 2016 Fast Growth 150 list. "They're very dedicated to it. The demand is crazy. Everybody wants it. There's a huge gap in the market. Customers are really interested in something that's truly going to transform their culture."

3. Artificial Intelligence Goes Mainstream

Tech historians looking back at 2016 are likely to record the year as the one in which artificially intelligent machines broke into the mainstream.

AI technologies, like machine learning and deep learning, had been around for decades, but the cloud finally made them accessible to the masses. Just about every enterprise tech vendor, from Google to IBM to Microsoft to Oracle to Salesforce, devoted much of their focus in 2016 to unveiling and promoting new AI-related products, claiming the technology as a major differentiator.

This year, for the first time, the channel was encouraged to start delivering solutions like predictive analytics and recommendation engines to their customers.

2. AWS Partner Sales Growth Is Off The Charts

Google Cloud Platform and Microsoft Azure both increased their revenue by triple-digit percentages in 2016, but Amazon Web Services' astronomical 50 percent-plus sales growth and $12 billion revenue rate is simply mind-boggling.

AWS Channel Chief Terry Wise told the 18,000-plus attendees at the company's AWS re:Invent conference in Las Vegas that AWS managed services providers grew by more than 130 percent, while consulting partners by more than 110 percent. The AWS ecosystem, meanwhile, added more than 10,000 partners in the last year, he said.

Partner-driven engagements are growing faster than the overall business, and the largest partners are growing the fastest – Premier Tier partners in the last year increased revenue four times faster than Advanced Tier partners, Wise said.

This as AWS reported 55 percent sales growth in the most recent quarter to $3.2 billion with operating income doubling year over year to more than $1 billion with margins of more than 31 percent.

1. Google Gets Enterprise Cloud Strong Under Diane Greene

Ultimately this will remembered as the year that Google got its enterprise cloud game on – in no small part due to the leadership of Google Senior Vice President Diane Greene.

In her first year at the helm, Greene, the highly respected former co-founder and CEO of virtualization powerhouse VMware, made Google an enterprise force to be reckoned with – no small matter given the AWS and Microsoft Azure cloud footprint.

With Greene leading the enterprise channel charge, Google in short order notched a series of customer wins that doubled its revenue and began a channel expansion.

That included a blockbuster Google Cloud Platform deal with Apple – a deal with market-shaking ramifications that was first reported by CRN.

Apple, in fact, became Google's biggest customer ever, taking hundreds of millions in revenue from rival Amazon Web Services. The deal marked a major turning point for Google.

Greene also initiated a rebranding of Google's enterprise division from Google For Work to the simpler moniker of Google Cloud, which she said better reflected the provider's enterprise maturity.