Mega cloud players squeezing out competition

21 April 2016

Innovation is thriving in the cloud services market, and machine-learning and meta clouds are just over the horizon. Enterprises are queueing up to adopt off-premises cloud services because they have to increase business agility and reduce costs.

A recent report from analysts IHS claims that the infrastructure-as-a-service (IaaS) segment of the market for on-demand servers and storage is maturing, with the big three players - Amazon Web Services (AWS), Microsoft and Google - all now possessing the scale and specialized knowledge to make it difficult for smaller players to compete.

However, there is still room for innovation in IaaS. Rackspace has expanded its professional services to third-party clouds such as Amazon and Azure. 

NTT has announced a self-serve OpenStack orchestrated bare metal server service. Internap is expanding its bare metal server service. And CenturyLink announced the availability of its government cloud, which meets specialized compliance requirements.

Whether the wholesale carrier market is ready for the huge flood of new users is another matter.

Even the earliest form of IaaS - colocation or ‘hosting’ is growing continuously, with Equinix and Level 3 expanding their data center footprints. Service providers and communication service providers have an opportunity to participate in a new wave of innovation by providing a single connection with service-level agreements (SLAs) to the enterprise, acting as a gateway to cloud service providers (CSPs).

Also set to change the enterprise are machine learning and analytics capabilities integrated with enterprise and mobile applications. Google has released a machine learning service for developers, and IBM has just released three new Watson application programming interfaces (APIs) that provide developers with access to technology for sensing emotional and visual cues that deliver insights on the tone, emotional context and sentiments of voice, text and images

CSPs are making steps towards the Meta-Cloud. Google announced new dashboard and orchestration tools that can manage and migrate workloads in its own data centres as well as in Amazon’s and on-premises data centres. NTT has also enhanced its enterprise cloud services with the ability to connect to third-party CSP data centres.

Cloud Services market statistics

• Globally, the off-premises cloud services market—including infrastructure as a service (IaaS), cloud as a service (CaaS), platform as a service (PaaS) and software as a service (SaaS)— reached $93 billion in 2015, growing 54 % since 2014.
• SaaS was the number-one off-premises cloud service in 2015, representing nearly half of all off-premises cloud revenue; IaaS was second with 39 % of revenue
• The off-premises cloud service market is forecast to reach near $278 billion worldwide in 2020, with a five-year compound annual growth rate (CAGR) of 25 %.

Topics: Software as a service, SaaS, innovation, AWS, Amazon Web Services, Google