This year’s Gartner analysis on the Cloud IaaS is fresh out and there are few interesting pointers and easily worth your time to read it through, if the area is of interest to you. You can also find my thoughts on the 2017 Quadrant in my blog post from last year.
Microsoft has also bought the distribution rights to this paper, so if you want to access the whole study, you can do it for example here:
The quadrant for Cloud IaaS itself this year looks like this:
AWS is named as the leader now 8th consecutive year in a row, closely followed by Microsoft’s Azure. This is also the first year, when Google has entered the Leaders segment.
Just for comparisons sake, here are the previous three quadrants, so nothing much between the relative positioning of the leaders has changed in the last few years. Definitely the biggest difference this year – and a bit of a surprise – is that over half of the providers previously on this list have been dropped out.
The following were dropped out for this year’s Quadrant altogether comparing to 2017:
Probably Fujitsu and Rackspace being the most relevant dropped out players in the EU market. I have to say, that I can’t disagree here with the decision to streamline this comparison. The worldwide competition is tough and only the premium hyperscale providers are the ones with the abilities to survive in this landscape. This is not saying that the other providers wouldn’t have relevance for example specific use cases or geographic presence, but in the global ballgame, they are unfortunately out.
We will dive a bit deeper to this analysis in a bit, but first some other sources of information about current market.
Based on Synergy’s research, AWS continues to dominate the revenue share of the cloud infrastructure and platform services market. In the following diagram, only the most significant providers in terms of market share are shown. These top five providers dominate roughly three quarters of the whole market.
Differing from last years graphs, AWS market share is not increasing at the moment. But it is to be noted, that this does not mean that AWS is not growing – actually the opposite. Cloud computing spend grew 51% year over year comparing Q1 results.
AWS is growing at the increasing pace as the cloud market is, so in absolute numbers they are also growing the fastest.
Another interesting thing to note is the emerging declining trend of IBM. We will dive more deeply into the reasons behind this in the next chapters.
Some key findings
The cloud IaaS market is consolidating rapidly while customer are expecting more services, features and cost efficiency. Also, governance, security and management features of the platforms are more and more important to the enterprise customer segment. If a Cloud Services Provider (CSP) is not able to provide these features, they can’t stay globally competitive and they are forced to a market niche.
This year’s Quadrant reflects this change. Only the major players are able to compete in this breadth of features and security to stay relevant for most customers and most use cases. According to Gartner, some ot the providers in the Niche quadrant have high aspirations to become key players, but time will tell if their vision and ability to execute will develop and if they are up for challenging the three main rivals in long term.
One main development in this market is also the rise of serverless and managed, abstracted or platform services. These are most easily adopted and consumed in public clouds.
Serverless computing is most easily adopted via public cloud services
This year it is explicitly stated, that PaaS segment is part of this feature set and forms one common platform. This is strongly differentiate from the pure SaaS market. This trend seems to be growing even stronger over time and the interest to pure IaaS is slowly declining.
Integrated management capabilities and developer services are key generators of value.
Automation is the key to utilize cloud platforms efficiently, so it is quite natural that these are strong feature sets are expected from the main players. Although, some prefer using external tooling to provide portability. Which brings us to the next key finding:
Most customers have a multicloud strategy.
Multi-cloud as a concept is here to stay. It is still worth considering, that how do you utilize this? If taking into account also the SaaS segment, probably most enterprises have had a multicloud strategy, even if they have realized that or not, as most are using Office 365. This presents as one type of multicloud startegy: splitting by application or category. So you might have your backoffice services from Office 365 and your IaaS/PaaS from AWS.
Some are considering or even implementing multicloud for the same workloads. To be able to do that, you need to have uniform set of tools and capabilities. This is where external tooling comes into place. Tools like Docker, Kubernetes, Terraform and middleware platforms like OpenShift are commonplace with this approach. But this is not easy to do – you need to test to make sure your multicloud deployment actually works and manage the different aspects of the management layer of the different IaaS providers. Which are not necessarily very similar. This is also stated by Gartner:
Managing multiple cloud IaaS providers is challenging
One thing to realize, that you do not need to make everything yourself. Having good and knowledgeable partners can achieve great results:
Managed and professional services greatly increase the likelihood of a successful cloud IaaS implementation
Using MSP partners starts to be commonplace and the major players have partner ecosystems, which include for example audited MSP partners to denote certain level of quality and capabilities to provide services for customers.
Other findings include statement that using public cloud does not necessarily yield cost savings. And it should be considered if that even should be the main driver for the cloud transition after all, or should the benefits be looked for elsewhere? Especially lift-and-shift types of migrations do not result in great cost savings. This is naturally dependant on the specific circumstances in each and every customer and their environment.
Lastly, it seems that most private cloud deployments rarely end up as successful services. Trend seems to be that failed private cloud initiatives are in the end replaced by using public cloud services. Failed private cloud initiatives might lead to trying to find a local cloud partner, but the offering is limited to certain extent. Local providers typically lack the capabilities of the global providers and the features of their platforms. Many of the local providers focus primarily on small businesses as customers, not enterprises.
So what is the conclusion?
The market continues consolidating around the two major players, AWS and Azure. They are leading the way in most of the key areas and setting the scene, which kind of services people want to use and with which terms. One thing to keep on the radar is the rise of the Chinese providers, mainly Alibaba cloud. We will see in few years, if their financial backing can drive innovation and adoption in fast enough pace to become relevant competitor.
Personally, I have concentrated the most on the AWS stack and secondarily to Azure stack. For me – and my employer – it has proven to be the right choice. Yours might differ and be the right for you.
Quadrant images property and courtesy of Gartner. All direct quotes attributed to Gartner from their paper, Cloud Infrastructure as a Service, Worldwide 2018