Checking in With the IaaS Market: Growth Patterns and Adoption Inhibitors

20 Nov 2014 by Cloud

"Infrastructure-as-a-service continues to be at the forefront of many businesses' cloud and overall IT strategies, but how will the coming years see this slice of cloud grow and develop? As the top two vendors continue to find ways to build their lead on their competitors, what does that mean for the future of the market? And how will these changes affect enterprise investment in the cloud?

Market Growth Continues Apace
According to an IDC report, the market for IaaS in 2014 will finish at around $10 billion, and is expected to surpass $20 billion by 2018. It's part of a collective growth in the three major aaS solutions - platform-as-a-service, software-as-a-service and infrastructure-as-a-service combined will see spending rise from $56.6 billion this year to $127.5 billion in four years' time. These numbers indicate a slight dip in the percentage IaaS makes up of the total aaS market, which it is mostly ceding to PaaS, the fastest-growing of the three. However, as IT Jungle contributor Timothy Prickett Morgan pointed out, it's important to realize that these market values need to be taken with a grain of salt.

""[One has] to realize that the PaaS revenues imply and include a certain underlying IaaS cost, and further up the cloud stack, the SaaS revenues imply and include a certain underlying IaaS and PaaS cost,"" Morgan said (italics in original).

It can be hard to separate the three offerings, especially as they are being sold in complex packages from vendors that want companies to outsource all of their cloud needs - and a significant part of their architecture layers - to one place. While this one-stop-shop mentality can certainly help businesses build up a powerful back-end infrastructure and take advantage of consolidated IT ecosystem management, it can also seem like a lot. In fact, it can even prevent companies from making the leap into IaaS, or the cloud in general.

Is Insufficient In-house Support Stopping IaaS Adoption?
Breaking from tradition is hard. Even if a company's server arrangement is just a few machines in a closet, it's still on-site. It can be difficult to imagine outsourcing server and infrastructure support entirely. It can actually become an interesting conundrum, as Computer Weekly contributor Alex Scroxton recently observed. While businesses believe they ought to explore outsourcing infrastructure management because they don't have the on-site personnel or adequate resources to oversee growing environments, company leaders can also perceive that a similar lack prevents them from adequately researching, investing and ultimately procuring an IaaS solution.

In one survey by open-source IaaS provider Reconnix, more than 80 percent of respondents acknowledged that they were unprepared to migrate to IaaS. While 10 percent said they were ready to make the leap, only 8 percent of organizations stated that they already had. This readiness (or lack thereof) stands in stark contrast to the 88 percent of respondents who stated that their companies saw transitioning applications away from traditional hardware to the cloud was ""a top, high or medium priority.""

According to Scroxton, Reconnix CTO Steve Nice stated that businesses have to figure out a way to put their concerns aside in order to make a strong push for IaaS investment, since they already acknowledge they need it.

""It's natural for many businesses to err on the side of caution, but this conservative approach can mean that many are missing out on the transformative benefits of the cloud,"" said Nice. ""It's clearly a confidence issue, and the challenge is for IT departments to take the necessary steps to prepare themselves for inevitable change.""

Brand Ambassadors: Navigating the IaaS Market
Cost, complexity and lack of trust in potentially unfamiliar IaaS brands were all cited as common factors delaying or preventing adoption, Scroxton reported. The Reconnix study found that Microsoft Azure was the most trusted provider, with 36 percent of respondents selecting it over IaaS offerings. Twenty-two percent of respondents picked IBM's Smart Cloud solution, while 14 percent each selected Amazon Web Services and Rackspace. Google'˜s Compute Engine, a newer offering in the IaaS space, received 5 percent of the priority. It raises interesting questions about the perceived trust in IaaS providers relative to their popularity. It also likely illustrated the difficulty many organizations have when it comes to making a choice, and how that hard task contributes to investment paralysis.

While Microsoft Azure may have ranked as the most trusted choice in Reconnix's study, it remains in second place in the IaaS market. However, as Cloud Tech News contributor James Bourne pointed out, Microsoft Azure is now firmly in the second position, with the most growth in the IaaS market year over year. However, no IaaS company has more than 15 percent of the market share, while Amazon AWS hovers just under 30 percent.

Growth Drivers for IaaS
New features will continue driving innovation in the field, argued Venture Beat contributor Guillaume Boisvert. As evidenced by the overlaps in what is determined to be IaaS versus PaaS or SaaS, it can be hard to demarcate exactly what elements of an IT ecosystem should fall under which umbrella heading. This is both a difficult and opportunity for companies in the IaaS field, which must be able to detail exactly which services they offer, while normalizing other solutions as part of a specific service framework.

Investment in IaaS, particularly of those organizations such as Reconnix that push the open-source approach, will likely have significant ramifications on the types of solutions that providers offer and businesses look for. Whether perceived concerns about IaaS investment hold any water, the fact remains that they are still inhibiting businesses from adoption. It will be interesting to watch as larger IaaS providers expand their reach, potentially challenged by smaller boutique providers that attempt to take a scaled-back, personalized approach to shopping their IaaS services.

For data center companies, the continued investment in and attention paid IaaS will likely to continue to drive key partnerships between facility operators and IaaS firms. It's also likely to push more data center organizations to establish proprietary solutions as a means of differentiating themselves from the competition and get a piece of the IaaS pie."

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