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      Home News Analyst Reports

      Hybrid infrastructure services are the way forward: Gartner

      Staff Reporter by Staff Reporter
      April 9, 2017
      in Analyst Reports, News
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      By 2019, 90% of native cloud IaaS providers will be forced out of this market by the Amazon Web Services (AWS)-Microsoft duopoly, according to Gartner.

      The growth of cloud and industrialised services, and the decline of traditional data centre outsourcing (DCO) indicate a massive shift toward hybrid infrastructure services, according to Gartner, Inc.

      In a report titled Predicts 2017: Infrastructure Services Become Hybrid Infrastructure Services, Gartner analysts commented that by 2020, cloud, hosting and traditional infrastructure services will come in more or less at par in terms of spending.

      “As the demand for agility and flexibility grows, organisations will shift toward more industrialised, less-tailored options,” DD Mishra, Research Director at Gartner commented.

      “Organisations that adopt hybrid infrastructure will optimise costs and increase efficiency. However, it increases the complexity of selecting the right toolset to deliver end-to-end services in a multisourced environment.”

      Gartner predicts that by 2020, 90% of organisations will adopt hybrid infrastructure management capabilities.

      The traditional DCO market is shrinking, according to Gartner’s forecast data. Worldwide traditional DCO spending is expected to decline from $55.1 billion in 2016 to $45.2 billion in 2020. Cloud compute services, on the other hand, are expected to grow from $23.3 billion in 2016 to reach $68.4 billion in 2020. Spending on colocation and hosting is also expected to increase, from $53.9 billion in 2016 to $74.5 billion in 2020. In addition, infrastructure utility services (IUS) will grow from $21.3 billion in 2016 to $37 billion in 2020 and storage as a service will increase from $1.7 billion in 2016 to 2.7 billion in 2020.

      In 2016, traditional worldwide DCO and IUS together represented 49% of the $154 billion total data centre services market worldwide, consisting of DCO/IUS, hosting and cloud infrastructure as a service (IaaS). This is expected to tilt further toward cloud IaaS and hosting, and by 2020, DCO/IUS will be approximately 35% of the expected $228 billion worldwide data center services market.

      “This means that by 2020, traditional services will coexist with a minority share alongside the industrialised and digitalised services,” explained Mishra.

      A 2016 Gartner survey of 303 DCO reference customers worldwide found that 20% use hybrid infrastructure services and 20% more intend to get them in the next 12 months.

      Gartner also predicts that through 2020, data centre and relevant “as a service” (aaS) pricing will continue to decline by at least 10% per year.

      From 2008 through 2016, Gartner pricing analysis of data centre service offerings shows prices have dropped yearly by 5-7% for large deals and by 9-12% for smaller deals.

      More recently — from 2012 to the present — prices for the new aaS offerings, including IaaS and storage as a service, have dropped in similar to higher ranges.

      Traditional DCO vendors will exit the DCO market due to price pressure, while others will develop solution capabilities and continue to compete. Buyers will have the ability to choose between many more vendors, choose traditional or new solutions and achieve price reductions year over year through 2020.

      By 2019, 90% of native cloud IaaS providers will be forced out of this market by the Amazon Web Services (AWS)-Microsoft duopoly.

      Over the last four years, the public cloud IaaS market has begun to develop two dominant leaders — AWS and Microsoft Azure — that are beginning to corner the market. In 2016, they both grew their cloud service businesses significantly while other players are sliding backward in comparison. Between them, they not only have many times the compute power of all other players, but they are also investing in innovative service and pricing offerings that others cannot match.

      According to Gartner, it is only in new markets that the dominance of AWS and Microsoft will be challenged by businesses such as Aliyun, the cloud service arm of Alibaba, the top player in China.

      “The competition between AWS and Azure in the IaaS market will benefit sourcing executives in the short to medium term but may be of concern in the longer term,” said David Groombridge, Research Director at Gartner.

      “Lack of substantial competition for two key providers could lead to an uncompetitive market. This could see organisations locked into one platform by dependence on proprietary capabilities and potentially exposed to substantial price increases.”

       

      Tags: broadcastPro Middle EastDCOfeaturedpostGartnerHybrid infrastructuresVijaya Cherian

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