Researcher Says IaaS Cloud Industry in 'State of Upheaval'
With cloud computing overtaking on-premises datacenters, the Infrastructure-as-a-Service (IaaS) arena dominated by Amazon Web Services Inc. (AWS) is in a state of upheaval, according to research firm Gartner Inc., as major industry players shake themselves out.
"Many service providers are shifting their strategies after failing to gain enough market traction," the company said in a news release about a recent presentation conducted by analyst Lydia Leong in a Sydney, Australia, conference.
Unquestioned -- though increasingly challenged -- market leader AWS isn't shifting its strategy because of a lack of traction, however, as it's among the small group of vendors grabbing more and more of the IaaS pie, which is growing at about a 33 percent rate.
"Market share has continued to become more heavily concentrated, even while the market has grown dramatically," Gartner said. "Although 15 providers featured in Gartner's new 'Magic Quadrant for Cloud Infrastructure as a Service, Worldwide,' the market is dominated by only a few global providers -- most notably Amazon Web Services, but increasingly also Microsoft Azure and Google Compute Engine. Between them, these three providers comprise the majority of workloads running in public cloud IaaS in 2015."
Leong expounded on the state of the IaaS market during her Sydney presentation.
"The sky is not falling -- customers are getting great value out of cloud IaaS -- but the competitive landscape is shifting," Leong said. "Few providers have the financial resources to invest in being broadly competitive in the cloud IaaS market."
Gartner said 2014 was a year of reckoning in the industry. Last year, for the first time, absolute growth of workloads in IaaS public clouds exceeded the growth of on-premises workloads. Some vendors failing to make inroads against the top players -- dominated by AWS, Microsoft Azure and Google Compute Engine -- are rethinking their strategies. Some are going to launch new IaaS cloud platforms, some are going to substantially change their current model, some will just provide managed services on other leading cloud platforms, some are reducing their IaaS initiatives and some are completely eliminating tor replacing their cloud offerings.
"We urge buyers to be extremely cautious when selecting providers; ask specific and detailed questions about the provider's roadmap for the service, and seek contractual commitments that do not permit the provider to modify substantially or to discontinue the offering without at least 12 months' notice," said Leong.
The explosive growth of cloud computing -- AWS started the whole trend less than 10 years ago -- has led to its ubiquitous usage for workloads suitable for hosting on virtualized servers based on x86 architecture, Gartner noted. It listed the most common use cases as:
- Development and testing environments.
- High-performance computing and batch processing.
- Internet-facing Web sites and Web applications.
- Nonmission-critical internal business applications (and, increasingly, mission-critical business applications).
"Cloud IaaS can now be used to run most workloads, although not every provider can run every type of workload well," said Leong. "Cloud IaaS is not a commodity. Providers vary significantly in their features, performance, cost and business terms. Although in theory, cloud IaaS has very little lock-in, in truth, cloud IaaS is not merely a matter of hardware rental, but an entire datacenter ecosystem as a service. The more you use its management capabilities, the more value you will receive from the offering, but the more you will be tied to that particular service offering."
David Ramel is the editor of Visual Studio Magazine.