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The heat is on for hybrid infrastructure services providers

The heat is on for hybrid infrastructure services providers

Hybrid surge could present new opportunities for the channel

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.

In a recent report, analysts said that by 2020, cloud, hosting and traditional infrastructure services will come in more or less at par in terms of spending. The analysts also predicted that by 2020, 90 per cent of companies will adopt hybrid infrastructure management capabilities.

"As the demand for agility and flexibility grows, organisations will shift toward more industrialised, less-tailored options," said Gartner research director, DD Mishra.

"Organisations that adopt hybrid infrastructure will optimise costs and increase efficiency. However, it increases the complexity of selecting the right tool-set to deliver end-to-end services in a multi-sourced environment."

Strong upswing in favour of cloud and infrastructure-as-a-service

In Australia, the traditional DCO market is flat, according to Gartner's forecast data. Traditional DCO spending is expected to decline slightly from $2.9 billion in 2016 to $2.85 billion in 2020.

Cloud compute services, on the other hand, are expected to grow from $348 million in 2016 to reach $572 million in 2020.

Gartner said spending on colocation and hosting is also expected to increase, from $359 million in 2016 to $392 million in 2020. In addition, infrastructure utility services (IUS) will grow from $387 million in 2016 to $522 million in 2020 and storage-as-a-service will increase from $62 million in 2016 to $72 million in 2020.

In 2016, traditional worldwide DCO and IUS together represented 49 per cent of the US$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 roughly 35 per cent of the expected US$228 billion worldwide data centre services market.

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

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

From 2008 through 2016, Gartner pricing analysis of data centre service offerings shows prices have dropped yearly by five per cent to seven per cent for large deals and by nine per cent to 12 percent for smaller deals.

More recently — from 2012 to the present — prices for the new as-a-service 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.

AWS and Microsoft duopoly continues to push native cloud IaaS out of the market

By 2019, Gartner said it predicts 90 per cent of native cloud IaaS providers will be forced out of the entirely market by Amazon Web Services (AWS) and Microsoft.

Over the last four years, the public cloud IaaS market has begun to develop two dominant leaders — AWS and Microsoft Azure.

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, the analyst firm said.

However, Gartner added 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, which is 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 Gartner research director, David Groombridge.

"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."

Gartner’s prediction comes off the back of AWS unveiling its latest investment plans during the

AWS Partner Summit in Sydney, detailing that the cloud vendor intends on focusing especially on hybrid IT.

McNaught suggested that hybrid options remain an essential option for many of its customers, in particular its larger enterprise and government customers that are not necessarily cloud native.

“Will continue to invest in this and invest in partners who support hybrid options, around hybrid IT, on-premise and in AWS cloud,” he said.

“We’ll continue to invest as customers need these hybrid options. But we do believe in the fullness of time, that customers will not have the need to manage their own ICT services, but will deliver their services from public cloud, and as that journey happens, hybrid options are important to us.”





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Tags Amazon Web ServicesAliyunAWSCloudAWS Partner Summit 2017iaasalibabahybrid infrastructure servicesHybrid ITGartnermicrosoft azure

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