Transforming enterprises through cloud infrastructure
AWS provided the Enterprise Summit audience with a real treat. Lydia Leong, Gartner VP and Distinguished Analyst, shared her views of the cloud infrastructure market and implications to enterprise IT. Her valuable insights are solidly backed with 15 years at Gartner and 22 years of industry experience. Two messages in her presentation resonated with me in particular. Her first main theme was the concept of a bi-modal strategy for enterprises’ approach to cloud infrastructure as a service. The second message was how the IaaS market is likely to develop.
A Bi-Modal StrategyThe foundation of the bi-modal strategy is that enterprise IT has two very different drivers.
- Mode 1 or Traditional: Focuses on costs, efficiency, security and reliability in IT operations.
- Mode 2 or Agile: Typically business line funded and focuses on taking calculated risks in developing new applications and new business rapidly.
The Power of Scale in IaaSBut what about the IaaS market itself? There is a very rapid evolution of the major cloud providers. Leading cloud IaaS providers are innovating like there is no tomorrow, delivering new functionalities, services and management capabilities. The distinction between IaaS and PaaS is becoming increasingly blurred. The leading cloud IaaS providers are also driving public cloud price erosion at an estimated 20% year-on-year, even if the massive price cuts have not been in the headlines. The cost reductions are delivered in a similar fashion to car or computer manufacturers, and even if the spend remains largely the same, the buyer gets so much more for their money. “He who dares, wins” seems to apply also to the cloud IaaS market. Ms. Leong reflected on the Gartner Cloud IaaS Magic Quadrant participants and their positioning. She estimated that 95% of the public and private cloud infrastructure market is currently captured by AWS and Microsoft Azure. Apologies, I have to repeat that - 95%! More than 50% of the companies on the Quadrant are planning to get out of the business. The market is just too competitive for the runners-up. The leaders are reaping economies of scale in three ways:
- They squeeze more efficiency from infrastructure operations.
- They are able to invest more in software development.
- They are able to build a wider and deeper ecosystem around themselves.
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Ilja Summala LinkedIn
Ilja’s passion and tech knowledge help customers transform how they manage infrastructure and develop apps in cloud.