IoT Missing but PaaS Sprinkled Across Gartner’s 2015 Magic Quadrant for Cloud IaaS  

VCloudNews analyzes recently released Gartner’s 2015 WorldWide Magic Quadrant (MQ) for Cloud Infrastructure as a Service (IaaS) which is a result of enormous research efforts of leading Gartner analysts Lydia Leong, Douglas Toombs and Bob Gill.

As per Gartner, the IaaS vendors selected are providers of standardized, highly automated offerings, where compute resources, complemented by storage and networking capabilities, are owned by the service provider and offered to the customer on demand. In this year’s IaaS MQ, Gartner also evaluates Middleware, Databases as a Service and some Platform as a Service (PaaS) capabilities for inclusion. However, the study excludes full stand-alone PaaS capabilities, such as application PaaS (aPaaS) and integration PaaS (iPaaS). VCloudNews feels over time this will need to change. IaaS and PaaS are merging and Gartner and other analyst reports should look at including this trend in their infrastructure related studies. PaaS and lately Internet of Things (IoT) are emerging as drivers for IaaS and therefore actively contribute on both axes of the Gartner MQ. It is somewhat surprising to not see IoT referenced in this study as it will have a big impact on how IaaS providers get ready for the scale and performance needed for connected devices and big data generated by these devices.

Gartner has evaluated vendors that are serving the needs for bi-modal IT i.e. IaaS is being adopted for both traditional and modern IT requirements. Gartner outlines Self-Service as an important aspect of a strong IaaS offering. Most leading players already have this capability regardless of whether they’re serving public, private or hybrid cloud needs of enterprises. This along with automation seem to be easy check boxes for today’s cloud providers but the level of simplicity and capabilities differ resulting in relative positioning within analyst reports. Gartner also looks at SLAs, billing technologies, security etc in MQ selection process. It is interesting to note that all providers in the MQ have an option for colocation. A few years ago, IaaS was viewed as a replacement for colocation but with Rackspace moving back to its roots and many mid market businesses still needing this capability, colocation has become a bridge to IaaS and many times co-existence with IaaS is a necessity.

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Source: Gartner (May 2015)

Leaders

Amazon Web Services (AWS) continued to lead the space with Microsoft Azure in close proximity. AWS is a $5B business annually as per Amazon’s first time reporting of cloud revenue inamazon.com_web_services the company’s Q1 2015 earnings statement. Microsoft claims $6B azurein annualized cloud revenue which is comprised of Microsoft Azure, Office 360 and Dynamics CRM. Pure IaaS revenues are not clear however both companies are very bullish on cloud as a significant pillar of growth. Additionally both are heavily focused on PaaS which will drive much of their IaaS business in future. AWS has strong cloud offerings but its success can also be attributed to being a price leader – thanks to Amazon’s e-tailing expertise. It has seen adoption for modern IT use cases across start-ups, mid-sized businesses and enterprises. Microsoft has had a strong presence in enterprise IT organizations with their enterprise software running on commoditized x86 hardware and the company needs to convert their installed base into Azure based offerings.  While both providers have preference for different technologies i.e. AWS is Xen and container driven and Microsoft Azure is mainly hyper-V based, the lines are blurring. Most cloud providers are now adopting open technologies and Microsoft Azure is positioning itself as a cloud provider that supports non-Microsoft technologies. With the price gap closing, AWS may not have the same advantage for long. Also if Microsoft is successful in signing up non-Microsoft customers with Satya Nadella’s new ‘Embrace Open’ philosophy, that would be a big threat to all other cloud providers.

Visionaries

The list of visionaries is interesting and this MQ categorization is probably hard to digest for some vendors because they have been positioning themselves as leaders through new products and business announcements over the past year. IBM in particular has highlighted over $7B in annualized revenue from cloud although Softlayer softlayerbluemixwhich comprises majority of their IaaS revenue is not broken out. IBM has also increased its focus on IoT with $3B in investment – combined with BlueMix PaaS, IBM is positioned to grow their IaaS and overall cloud business. BlueMix is deeply dissolved in IBM’s cloud strategy and core to their vision. The impact of this strategy will be visible over the next several years and it will be interesting to see how IBM moves on this chart.

Per Gartner, VMware which is featured in this category entered the cloud IaaS market when it launched the VMware vCloud Hybrid Service (vCHS)VMwarelogo, now renamed vCloud Air, into general availability in September 2013. VCloudNews feels that any mention of VMware’s or EMC’s cloud strategy should include Pivotal’s Cloud Foundry based PaaS offerings. Pivotal’s success could eventually result in VMware’s IaaS offerings pivotalbeing dragged and therefore it is important to analyze as part of MQ reporting. As per Gartner, VMware is in visionary category instead of leaders because it still needs to build an ecosystem for execution.

Most interesting in this category is Google which VcloudNews recognizes as a sleeping giant in the googlecloudIaaS market. Per Gartner, Google offers Google Cloud Platform which has an IaaS offering i.e.Compute Engine, an aPaaS offering App Engine and a range of complementary services, including object storage and a Docker container service Container Engine. VCloudNews agrees with Gartner’s analysis that Google has strong vision and technology but needs to get more adoption with enterprises. Earlier this year, Google and VMware started collaborating on cloud vision – this is an interesting area to watch as both visionaries evolve their cloud play to be featured in the leaders category. Google is also collaborating with companies such as Mesosphere on Container Management technologies as a way to enter enterprise data centers.

CenturyLink which acquired Savvis has VMware based  offering and a vision for providing the best hands-off IaaS and Managed Services combo. The compacenturylinkny also plans to leverage its “Platform CenturyLink” to deliver the breadth of CenturyLink’s capabilities in an API-accessible and composable fashion. Per Gartner, it is building a broad range of cloud-enabled services, including automation-augmented managed services.

Niche Players

Rackspace stacks the highest in this category – the company bounced around for several years to find its rackspacesweet spot and is now transforming from a pure OpenStack based Public cloud to going back to excelling in its roots of managed services using OpenStack and DevOps technologies and philosophies. Earlier this year, Rackspace partnered with VMware to provide vCloud Air based managed services. The company is very strong in adopting new technologies and needs to focus on helping enterprise customers do more through robust services built and offered on these technologies.

Virtustream has found grounds in providing IaaS services for mission-critical complex enterprise applications, such as ERP suites from SAP, Oracle and Microsoft. The company has developed its own cloud platform technology, and can offer fully consistent hybrid cloud soluvirtustreamtions. Its micro-VM technology enables it to charge for resources consumed, rather than resources allocated, and to offer policy-based service-level management and application performance SLAs. Virtustream’s service, xStream, is hypervisor-neutral but typically supports VMware and KVM. The company also partnered with VCE/EMC for compute and storage infrastructure components. Like Virtustream, Joyent is an independent service provider that focuses solely on cloud services and software. The company is a joyentstrong proponent of OS containers and their customers can run Linux or Windows guests on bare metal or KVM-based VMs. Joyent also offers a free open-source version of its software as SmartDataCenter, and sells a commercial version as Triton Elastic Container Infrastructure. The company’s niche is around serving cloud-native or microservice architecture applications deployed into OS containers. Both Virtustream and Joyent are attractive acquisition candidates for cloud providers looking for growth or/and new technology.

Other players listed in this section are trying to make a mark in the IaaS market with different approaches. Computer Sciences Corporation (CSC) has csclogoa user friendly portal with back end offerings from VMware and choice for Agility Platform CMP, formerly ServiceMesh. CSC has transformed into more of a Cloud Service Broker (CSB)/reseller model which is great but as per Gartner they also need to build a rich portfolio of technology driven value-added cloud software infrastructure services. Dimension Data which is owddataned by NTT Group is a large SI and value-added reseller (primarily Cisco). It entered the cloud IaaS market by acquiring OpSource in 2011. Dimension Data’s Managed Cloud Platform (MCP) is a single unified architecture and capable basic cloud IaaS platform however per Gartner, like CSC it lacks value-added capabilities. The company also wants to be a CSB. Gartner recommends NTT Group should look at Dimension Data and other technologies as a whole vs splitting across multiple units to achieve maximum success.

Verizon’s cloud offerings are based on Terremark Enterprise Cloud which is based on VMwareverizonterremark virtualized infrastructure and the company has traditionally found success in the federal/government market. Per Gartner, Verizon has lost some of its competitive differentiators over time and Verizon’s sales organization does not often have a relationship with the decision makers and influencers who select cloud IaaS providers. Verizon will need to invest in multiple areas to move up in the Gartner MQ.

Interoute and NTT Communications have been added to Gartner’s MQ this year. UK based Interoute’s Virtual Data Centre (VDC) is a CloudStack-based offering that can be delivered interoutenttin the customer’s choice of tenancy models and of VMware, Citrix Xen or KVM virtualization. NTT Communications is a Japan-based global communications service provider with two cloud IaaS offerings – Cloudn is suitable for modern IT and is a fully multitenant, CloudStack-based, KVM-virtualized offering with Cloud Foundry-based aPaaS. Enterprise Cloud is a VMware-virtualized, vCloud API-enabled offering. The company wants to merge these in their next generation cloud. NTT has been successful in Asia and its future position will depend on how well it manages and drives transformation of its Asian enterprise customers to a cloud based IT model. Another Japanese company, Fujitsu currently offers Xen based Cloud IaaS Trusted Public S5 cloud and is developing its “Nfujitsuext Gen Cloud,” a common platform onto which it intends to consolidate all its internal systems, including its system integration business. Per Gartner, this offering is projected to enter beta in 2015. Over time, this OpenStack-based platform will be used for both IaaS and PaaS solutions.

HP has been dropped in this year’s MQ –hp per Gartner, although HP continues to operate its cloud IaaS offering (HP Public Cloud), it now only actively seeks to market and sell this offering as part of a hybrid solution. It no longer has sufficient market share to qualify for inclusion in the MQ.

Interestingly, the Challengers quadrant in this year’s MQ is empty – do we really need one in this category? Or do we simply need cloud providers to get to a higher level of inter-operability and standardization to help enterprises of all sizes adopt IaaS confidently without worrying about their investment choices? With a complex cloud eco-system and emerging PaaS and IoT models, the portfolio of cloud providers and their offerings will evolve and so will Gartner MQ over the next several years.

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2 comments

  • As the author of this report, I thought I’d throw in a comment: IoT is not missing from this report, although it is not called out specifically. IoT, mobile back-ends, data-as-a-service and other new types of applications are typically cloud-native applications, and we consider the ability to serve such applications under that bucket.

    • Lydia, thank you very much for your comment. We expect to see more focus on IoT in future MQ studies as IaaS vendors are still evolving to address IoT needs. How well they address has the potential to change MQ positioning.

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