On Tuesday night, IT research and analysis firm Gartner released the latest iteration of the highly influential yearly report Magic Quadrant for Cloud Infrastructure as a Service, Worldwide.
Cloud computing is one of the fastest growing segments of corporate IT spending, and when people think of cloud computing, they usually think of compute Infrastructure as a service (IaaS), says Gartner. Worldwide spending on Cloud IaaS will grow 32.8 percent in 2015, according to research revealed in the new report, and many of the world’s largest tech companies are in fierce competition over the rapidly consolidating market.
In the Magic Quadrant for cloud IaaS (available free here), Gartner evaluates the strengths and weaknesses of what it considers leading vendors in the compute IaaS market, and provides readers with a graph (the ‘Magic Quadrant’) plotting the vendors based on their ability to execute, and completeness of vision. The graph is divided into four quadrants: niche players, challengers, visionaries, and leaders. Gartner does not endorse any vendor, product, or service depicted in its research publications.
[From AWS to Rackspace, Solutions Review rounds up the top 28 cloud vendors in the 2015 Cloud Platform Solutions Buyer’s Guide. Solutions Review Buyer’s Guides include full market overviews and 10 questions designed to help find your best fit in the cloud. Download your free copy today.]
This is the fourth iteration of the IaaS Magic Quadrant report, and as you might expect, there have been massive changes in the ever-evolving and somewhat nascent cloud computing market since the first report. In the last year alone we’ve seen considerable market consolidation, which has caused some changes in positions on the Magic Quadrant, as well as some vendors being dropped from the report.
At Solutions Review, We read the 38 page report, which we received in full via email from an Amazon Web Services representative, and pulled a few of what we consider the most important takeaways and key changes from the 2014 IaaS Magic Quadrant.
What is Infrastructure as a Service?
Cloud infrastructure as a service (IaaS), Gartner says, is the ‘compute’ In cloud computing. An IaaS solution is a cloud service that provides compute, storage and network resources, delivered on-demand, in real-time (or as close as possible), as a service.
For the purposes of this report, Gartner has focused specifically on Cloud Compute IaaS, which the company defines as “standardized, highly automated offerings, where compute resources, complemented by storage and networking capabilities, are owned by a service provider and offered to the customer on demand.” Gartner did not include cloud storage services, platform as a service (PaaS) or managed services in the 2015 IaaS Magic Quadrant.
Beyond the resources themselves, Cloud IaaS also includes automated management of those resources and management tools delivered as a service, says Gartner.
Mode 1 and Mode 2 IaaS
One major change in Gartner’s evaluation methodology is the inclusion of two new categories for applications: Mode 1 and Mode 2. According to Gartner, IT organizations are either focused on “maintaining existing stuff” (Mode 1) or “building new stuff, in particular, cloud-native applications” (Mode 2). In the new IaaS Magic Quadrant, Gartner recommends use cases for each vendor, based on these categories.
According to Gartner, most IaaS is bought for mode 2, but cloud IaaS is increasingly being purchased for Mode 1 traditional IT purposes as well.
How has the market changed?
In many ways, the past year could be considered the year that cloud IaaS grew up. In 2014, for the first time ever, the absolute growth of public cloud IaaS workloads was more than the growth of on-premise workloads (of any type), according to Gartner. Here are some of the major market trends we picked up from the 2015 IaaS Magic Quadrant report.
Amid fierce competition, a consolidation of market share.
Despite a massive growth in IT spending market share and increasing competition, market share continued to grow more heavily concentrated over the past year. Though 15 vendors feature in the IaaS Magic Quadrant report, a majority of the market is dominated by the three largest IaaS providers. Amazon Web Services (AWS), who recently revealed 5.16 billion in 2015 cloud earnings, is the clear market leader, and is positioned as such on the chart. According to Gartner, AWS boasts “over 10 times more cloud IaaS compute capacity in use than the aggregate total of the other 14 providers” in the Magic Quadrant.
Despite Amazon’s large lead, Microsoft (who is aiming for $20b in cloud revenue by 2018) and Google Compute Engine (which has recently slashed prices to compete with AWS) are also making notable gains in cloud IaaS, and round out the ‘big three’ cloud IaaS competitors dominating market share.
Without a clear strategy, vendors face major upheaval.
“2014 has been a year of reckoning for many cloud IaaS providers,” says Gartner. Many providers have lost sight on clear strategies for the marketplace, and others maybe believe that their current strategy is failing them. This could lead some of the providers to launch entirely new cloud IaaS platforms, or to make large changes to their current platforms, according to the report. Other vendors, Gartner says, “are considering or in the process of executing a pivot to providing managed services on leading cloud IaaS providers.”
in their 2015 IaaS Magic Quadrant, Gartner’s analysts are urging cloud buyers to be “extremely cautious” when choosing providers. Cloud buyers, Gartner says, need to be sure of the providers plans for their services, and should “seek contractual commitments that do not permit the provider to modify substantially or to discontinue the offering without at least 12 months’ notice.”
One victim of this upheaval has been legacy tech vendor Hewlett-Packard (HP), who, for the first time, did not qualify for a full write-up in Gartner’s IaaS report. “While HP continues to operate its cloud IaaS offering (HP Public Cloud), it now only actively seeks to market and sell this offering as part of a hybrid solution,” says Gartner.
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IaaS Workloads expand to both ‘modes’
As noted above, the absolute growth of public cloud IaaS workloads has surpassed the growth of on-premise workloads, and in Gartner’s 2015 CIO survey, 83 percent of CIOs said that they consider cloud IaaS as an infrastructure option, while 10 percent took a ‘cloud-first’ approach to infrastructure.
So what’s fueling this growth?
Traditionally, cloud IaaS is bought for Mode 2 applications— with an emphasis on increasing developer productivity and business agility, but in the past year, cloud IaaS has been increasingly used bimodally, for both application development and traditional IT maintenance.
“Cloud IaaS is now used for virtually all use cases that can be reasonably hosted on virtualized x86-based servers,” says Gartner.
AWS remains the market leader, but Microsoft and Google are in hot pursuit.
As noted about, AWS has what Gartner calls a “multiyear competitive advantage” in cloud IaaS, but Microsoft and Google have proven themselves to be tough competitors and have made major gains in market share and on the Magic Quadrant.
While Gartner praises AWS for a “pure vision of highly automated, cost-effective IT capabilities, delivered in a flexible manner, the research firm also warns buyers that AWS is a “complex vendor to manage,” and could be moving too fast.
“AWS is spreading its efforts very broadly. Although many new services are highly successful, services that turn out to be of less interest to customers will not get the same depth of continued investment as more popular services,” says Gartner.
Microsoft, according to Gartner, is growing rapidly. The company is now in second place for IaaS market share, with more than twice as much IaaS compute capacity in use as the total of the remaining providers in the report (excluding AWS). Though Gartner says Microsoft is a good choice for enterprises developing general businesses applications (especially so for Microsoft-centric organizations), the research firm warns that Microsoft’s partner developer ecosystem is still “relatively nascent.”
Last but not least, Google’s IaaS offering, Google Compute Engine, made major gains in positioning on this year’s Magic Quadrant, and gained considerably in ‘ability to execute.’
Gartner praises Google for “excellent price/performance value and exceptionally fast VM provisioning,” but says that the end game for Google will be differentiating itself with platform and manageability features, and not prices.
Though Gartner identifies market leaders, they are careful to point out that large market leaders are not always the right choice for a business. “A focused, smaller vendor can provide excellent support and commitment to individual customers,” according to the report.
We obtained our copy of Gartner’s report via AWS here.
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