The market for cloud infrastructure as a service (IaaS) is in a state of upheaval, as many service providers are shifting their strategies after failing to gain enough market traction, says analyst Gartner.
Global spending on IaaS (where compute, storage and networking capabilities are hosted by a service provider and offered to customers on-demand) is expected to reach almost $16.5 billion in 2015, an increase of 32.8 per cent from 2014, according to Gartner's latest forecast.
Gartner VP Lydia Leong said the IaaS solution ecosystem is rapidly consolidating around a small number of market leaders.
"The sky is not falling - customers are getting great value out of cloud IaaS - but the competitive landscape is shifting," she said.
"Few providers have the financial resources to invest in being broadly competitive in the cloud IaaS market."
According to Gartner, 2014 was 'a year of reckoning' for many cloud IaaS providers, and many believe that their current strategy is failing them.
However, the market is still dominated by a few global providers - notably Amazon Web Services, Microsoft Azure and Google Compute Engine. Between them, these three providers comprise the majority of workloads running in public cloud IaaS in 2015.
Gartner says some providers intend to launch an entirely new cloud IaaS platform, make substantial changes to their current platform or move to providing managed services on leading cloud IaaS platforms. Some will discontinue or reduce their investment in their cloud IaaS offerings, while others intend to eliminate or replace them.
"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," added Leong.
In 2014, the absolute growth of public cloud IaaS workloads surpassed the growth of on-premises workloads (of any type) for the first time. Gartner's 2015 CIO survey indicates that 83 per cent of CIOs consider cloud IaaS as an infrastructure option, and 10 per cent are already cloud-first with cloud IaaS as their default infrastructure choice.
Cloud IaaS is now used for virtually all use cases that can be reasonably hosted on virtualised x86-based servers.
"Cloud IaaS can now be used to run most workloads, although not every provider can run every type of workload well," commented Leong.
Gartner also predicted that many businesses, especially in the midmarket, will eventually migrate away from running their own data centres in favour of relying primarily on infrastructure in the cloud.
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