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Hyperscale and IaaS Ascendant in Public Cloud: Study
The writing is on the wall for the johnny-come-latelies of the public cloud: Hyperscale vendors like Amazon Web Services (AWS), Microsoft and Google are on track to dominate the market for the foreseeable future, leaving little room for smaller and newer players.
That's one of the takeaways from Gartner's recent assessment of the worldwide public cloud market, which the research firm expects to surpass $186 billion by year's end -- a 21 percent year-over-year jump.
Among the various "as-a-service" categories within the public cloud, Infrastructure as a Service (IaaS) is poised to have the fastest growth this year. The IaaS segment will be worth nearly $41 billion in 2018, Gartner projected, marking a 36 percent jump.
Despite that growth, there are some nuances within the IaaS segment that might be worrisome to vendors and customers alike. By 2021, Gartner predicts the top 10 cloud providers will make up 70 percent of the overall IaaS market. Hyperscale providers are especially well-positioned, all but shutting out smaller vendors and increasing the risk of vendor lock-in, which many businesses cite as an emerging concern.
"The increasing dominance of the hyperscale IaaS providers creates both enormous opportunities and challenges for end users and other market participants," said Gartner research director Sid Nag. "While it enables efficiencies and cost benefits, organizations need to be cautious about IaaS providers potentially gaining unchecked influence over customers and the market. In response to multicloud adoption trends, organizations will increasingly demand a simpler way to move workloads, applications and data across cloud providers' IaaS offerings without penalties."
The second-fastest growing segment is Platform as a Service (PaaS), which is expected to increase by 26 percent to $15 billion by the end of the year.
In particular, Gartner singled out the Database Platform as a Service (DBPaaS) category for its growth. Hyperscale providers are increasingly expanding their offerings to include DBPaaS, Gartner noted, which is yet another advantage of their size compared to smaller competitors.
Software as a Service (SaaS), meanwhile, is expected to grow a slightly slower rate -- 22 percent -- while still remaining the biggest segment in the public cloud. SaaS, which Nag described as "the preferred delivery model," is on pace to reach nearly $74 billion in 2018, compared to $60 billion in 2017. By 2021, SaaS will account for 45 "of total application software spending," according to Gartner.