Mobile network operators should take comfort knowing their evolutionary path on the cloud isn’t much unlike enterprises. Organizations of all types are moving to the next level of maturity in the cloud, according to IDC.

Wireless carriers and other specialized enterprises are increasingly adopting foundational cloud services for compute, data, and application frameworks to improve operations and increase revenues. IDC now forecasts annual recurring revenue generated from foundational cloud services to surpass $300 billion in 2025, up from less than $100 billion in 2020.

Enterprises are adding more cloud capabilities to their arsenal just as the most forward-leaning network operators are moving up the cloud stack by going beyond network cores to put additional functions, such as radio access networks (RAN), in the cloud.

“Digital is now a permanent, yet dynamic, fixture in our world, built on the digital infrastructure and platform technologies of a cloud foundation,” Rick Villars, group VP at IDC, wrote in a statement. “When organizations want to pursue some digital-based capability or intelligently leverage data to their advantage, they can do so because they have rapid access to the foundational cloud services offered by the leading cloud services providers.”

These foundational cloud services traverse infrastructure, platform, and system infrastructure as a service, where the top eight public cloud providers held a combined market share greater than 60% in 2020. Amazon, Microsoft, Google, Alibaba, IBM, Tencent, Huawei, and Oracle command the bulk of activity and investment in the space today, according to IDC.

Enterprises are turning to foundational cloud services for compute, data, application frameworks, and usage multipliers, analysts explained. Compute services include: virtualized x86 compute, bare metal compute, block storage, accelerated compute, and compute software. 

Data services include data management systems, object storage, file storage, and event stream processing software. App framework services include integration software, deployment-centric application platforms, and artificial intelligence lifecycle software. 

Finally, IDC described usage multiplier services as load balancing, domain name systems, and open-source software that allow for a more effective use of tools that can connect, deploy, track, secure, and update these services. 

The services within those four categories are projected to account for more than two-thirds of all revenue in 2025, up from about half in 2020, according to IDC. During this maturation phase, IDC expects enterprises to adopt various strategies with some selecting a primary vendor and others opting for a more diverse contribution from multiple vendors.

The desired outcomes and factors driving adoption of foundational cloud services are common among all enterprises. This is especially true in cases where these services allow IT professionals and developers to quickly build, test, and deploy new applications in a cloud-native environment, IDC explained. 

Organizations also benefit from the availability of hybrid cloud and containers because these frameworks allow companies to choose the best cloud provider for a specific workload, the analysts concluded. 

“Customers are seeking outcomes, not technology solutions. The key will be to differentiate, build mindshare, and redefine or productize portfolios by use cases,” Lara Greden, research director at IDC, wrote in a statement. 

“Demand for foundational cloud services is increasing, indicating customer expectations are being met by the providers in these areas. However, this is no time to rest,” she added. “In a market characterized by rapid innovation, foundational cloud service providers must continually prove that they are willing to invest in innovation at a high level.”