Public Cloud Becoming Core Infrastructure
- By Lachlan Colquhoun
- May 01, 2018
New projections from Gartner underline one of the primary truths of digital transformation: the cloud is now a core part of infrastructure planning.
The research organization forecasted that global spending on public cloud services would grow 21.4% in 2018, up to USD 186.4 billion from USD 153.5 billion in 2017.
Regarding cloud spending, Gartner showed that the fastest growing segment of the market was cloud system infrastructure services – what is now called infrastructure-as-a-service or IaaS. It is set to increase 35.9% this year to reach USD 40.8 billion globally.
IaaS Growth Shifts Gear
Gartner broke its forecast down into five categories of cloud services. It predicted that IaaS would be the fastest growing section of this market by 2021.
As organizations grow more confident with the public cloud, they are also finding value in the IaaS model, where the cloud provider provides and manages the physical infrastructure (services, storage, and networking) and the customer manages the operation system, applications, and virtual machines. The big strength of IaaS is its flexibility and opportunities for customization.
Gartner forecasted that IaaS spending would more than double in the next three years to 2021, reaching USD 83.5 billion. Meanwhile, other cloud-based services, such as Cloud Business Process Services (BPaaS) and even Cloud Management and Security Services would remain static.
IaaS is even gaining ground on Cloud Application Services (SaaS), which remains the largest segment of the cloud market. In 2017, SaaS was double the market size of IaaS, but by 2021 the gap would narrow as a result of rapid growth, Gartner predicted.
Hyperscale IaaS Tensions, Multi-cloud Arises
With IaaS growth, however, comes a consolidated market. Gartner forecasted that the top 10 providers would account for nearly 70% of the IaaS market by 2021, up from 50% in 2016.
The growth of hyperscale IaaS providers would create a new marketplace for tensions between vendors and customers.
“The increasing dominance of the hyperscale IaaS providers creates both enormous opportunities and challenges for end users and other market participants,” Sid Nag, Research Director at Gartner, said.
“While it enables efficiencies and cost benefits, organizations need to be cautious about IaaS providers potentially gaining unchecked influence over customers and the market,” he added.
Nag said that in response to multi-cloud adoption trends, organizations would increasingly demand a more straightforward way to move workloads, applications, and data across cloud providers' IaaS offerings without incurring penalties.
Other Analysts Agree
The Gartner forecasts are backed up by other research houses. According to a Crowd Research Partners survey, 36% of organizations are running IaaS in production, while another 50% have plans to do so in the future.
IDC said that cloud spending was growing about seven times faster than overall IT spending and that IaaS spending would grow faster than SaaS through to 2020, reducing SaaS to around 60% of public cloud expenditure.