Hyperscalers: From Data Centers to Cloud Marketplaces
The terms “hyperscale” and “hyperscaler” get thrown around a lot – and with good reason. It goes without saying that hyperscalers like AWS, Azure, and GCP have redefined the internet and allowed SaaS businesses to create cloud solutions that are hosted off-prem. But hyperscaler didn’t always describe the internet or even cloud consumption.
Here’s a brief history of how today’s top cloud service providers (CSP) became known as hyperscalers – and what hyperscaler means in the world of cloud marketplaces.
A history of the term hyperscaler
The term hyperscaler emerged in the 1990s during the Dotcom boom. At the time, hyperscaler generally referred to data centers and hardware. As more users flocked to the internet, the technology’s architecture needed to scale and meet new demands on the system. Data centers began to handle thousands – and then millions – of servers, which managed data and network traffic never seen before.
Before, most organizations would expand vertically, which meant building servers with more processing power, memory, and storage. The hyperscaler approach was different. Its major innovation was scaling horizontally, or adding more servers to a network to distribute the burden. The result? Performance improved – dramatically.
But not every business had access to hyperscale powers. Can you imagine every business building their own data center – and then paying to keep the cool?
Hyperscalers and the internet giants
A shift in hyperscale data centers
By the 2000s, the term hyperscale shifted describing hardware to software.
The survivors of the DotCom bust, along with new players in Web 2, redefined the term hyperscaler. Google, Amazon, and Facebook (now Meta) established their own hyperscale operations. Google’s hyperscale data center was launched in 2006, the same year that Amazon Web Services launched cloud computing.
Other companies – including Scaleway, Switch, QTS, Digital Realty Trust, Equinix, and Oracle – also built data centers for hyperscale computing. Hybrid cloud computing enabled businesses to operate at a massive scale, without their own massive physical data centers.
Hyperscalers and the 2000s tech boom
Hyperscaler data centers spanned not just cities or countries, but continents, introducing compute, memory, networking, and storage resources that would eventually help the tech giantes generate billions in annual revenue. Distributed teams needing distributed systems. The result? A boom in Telecommunications, AdTech, and other early adopters.
Google, Amazon, and Meta saw their own businesses become hyperscale operations. They moved far away from the world of gigabytes – to one of petabytes and even terabytes.More legacy enterprises followed suit, leaving behind the world of on-premise data centers and began hosting their business on one or more cloud ecosystems.
At the height of the tech boom, AWS, Azure, and GCP empowered any organization to harness computing resources whenever they needed it, unlocking enough flexibility and efficiency to reach unprecedented levels of scale. Suddenly, companies of all shapes and sizes could unlock hyperscale tools with a few lines of code, thanks to APIs. The shift to the cloud enabled many companies to keep the lights on during the Covid-19 pandemic, when the entire globe shifted to digital-first operations.
A new challenge– and opportunity – emerged for ISVs: designing a solution with the hyperscaler’s system in mind.
Hyperscalers and innovation
Hyperscalers, which have become crucial to our global IT infrastructure, have made the world of computing more reliable than ever, sparking innovation across the board. Working with a top cloud service provider is basically a requirement for accessing big data tools and reaching enterprise-level scalability, and more.
Without hyperscalers, innovations in data management, AI, machine learning, Internet of Things, AR/VR, and autonomous vehicles couldn’t exist. Other areas of innovation include:
- Hardware, especially server architecture, network technologies, and storage
- Software, especially serverless computing and elastic scaling
The rise of hyperscaler marketplaces
Amazon Web Services, Google Cloud Platform, Microsoft Azure, IBM Cloud, Alibaba Cloud, Oracle, and others offer services to customers who can run their own solutions on the cloud. (Meta and X – formally Twitter) are also hyperscalers, but operate differently: the social media giants use their services to run their own applications.)
With more businesses transitioning to the cloud, it’s become second nature for IT and DevOps teams to search for solutions on their cloud provider’s marketplace, just as they might buy kitchen supplies on the Amazon app or subscribe to The New York Times.
For ISVs, the shift to cloud marketplaces is a massive opportunity. Companies tend to have cloud committed spend – an agreement between a CSP and customer to spend a certain amount of money, which usually comes with a bulk discount offer. If the customer doesn’t use it, they lose it.
For today’s ISVs, the challenge is choosing where to begin your marketplace and how to choose a vendor. Does it make sense to focus on one cloud marketplace – maybe the one where the majority of your customers are located – or are you ready to venture into a hybrid cloud strategy to unlock new revenue streams?
The hyperscaler marketplace opportunity
According to Canalys, the total addressable IT market value in 2024 is a staggering $4.9 trillion.
It’s no coincidence that hyperscaler cloud marketplaces have seen rapid growth over the past few years as well. And things are just heating up.
The AWS Marketplace was launched in 2012, while the Azure Marketplace entered the scene in 2014. Google rebranded Cloud Launcher, the search giant’s first marketplace, as the Google Cloud Platform Marketplace in 2016. These tech giants were likely inspired by Salesforce’s early success with the AppExchange, which was first announced in 2005.
As a nascent space, hyperscale cloud marketplaces are just getting started.
Are you ready for it?
Hyperscaler FAQ
- What is a hyperscaler?
A hyperscaler is a cloud service provider that offers independent software vendors and other businesses with the ability to handle computing, storage, and other key IT processes for millions of users. Hyperscalers like Azure and AWS equip businesses of all shapes and sizes with the necessary IT architecture to handle the demands of millions, or even billions, of users.
- Who are the top 5 hyperscalers?
The 5 most used hyperscaler marketplaces include Amazon Web Services, Microsoft Azure, Google Cloud Platform (GCP), IBM cloud, and Oracle. These 5 tech behemoths offer enterprise scale solutions, as well as run their own apps on their own scale. Google Search, Gmail, and Google Docs, for instance, run on the Google Cloud Platform.
- Why is Amazon Web Services (AWS) called a hyperscaler?
Amazon Web Services, which is the largest Hyperscale cloud provider, offers a robust set of services that enable businesses ranging from small ISVs to major enterprises to support billions of users. Their cost-effective cloud services include encryption, storage, data management, computer power and all of the necessary features to enable businesses to scale
- What is an example of a hyperscaler marketplace?
AWS, with 32% of the hyperscaler market share (as of 2023) is the greatest example of a hyperscaler marketplace. Other hyperscaler marketplace examples include Azure by Microsoft, Google Cloud Platform (GCP), IBM Cloud, and Oracle.
- How do I choose a hyperscaler vendor?
To choose a hyperscaler vendor, you will want to take a number of factors into account, including pricing, computation services, development tools, storage schemes, database management, ability to build private networks, container and orchestration, support, compliance, security features, and geographic availability.
If you’re not sure which hyperscaler marketplace is the right one for you at your current stage, consider partnering with Invisory to explore your options. Whether you’re an ISV looking to list for the first time on AWS, or have listed on Azure and want to expand to AWS, we’re here to help.
- Why do companies partner with hyperscaler marketplaces?
For independent software vendors, partnering with hyperscaler marketplaces offers a number of key benefits, including streamlined payments, exposure to a network of buyers, reputational boost, more room for innovation, partnership opportunities, and more.
