The IaaS market is growing – shouldn’t your business, too?

 In Blog

According to the latest numbers released in July by Gartner, the worldwide public cloud services market is projected to grow 17.5 percent in 2019 to total US$214.3 billion, up from $182.4 billion in 2018.

Software-as-a-Service (SaaS) continues (for now) to hold the lion’s share of the market but shows no signs of ever again being the growth leader it once was. That distinction now goes to cloud system infrastructure services, or infrastructure-as-a-Service (IaaS).

Gartner is pegging IaaS growth at 27.5 percent in 2019, to reach US$38.9 billion. This is a bit of a slowdown from 31.3 per cent growth in 2018, but still impressive. Cloud application infrastructure services, or Platform-as-a-Service (PaaS), is second at 21.8 percent, while SaaS will muster US$94.8 billion, with more modest (relatively speaking) year-over-year growth of 18.5 per cent.

At HyAlto, we believe IaaS will continue to be the big market driver. All three of the big cloud providers – Amazon, Google, Microsoft – deliver a catalogue services for IaaS, PaaS and SaaS in a hyper-competitive effort to dominate key growth segments. At present, Amazon’s AWS is holding leadership in IaaS, but it is anyone’s guess how long that will last.

So, bear in mind that:

  • The Big Three will continue to battle for dominance
  • They will partner with other vendors (such as VMware) where and when they believe it is advantageous to do so
  • Their enterprise customers will continue to pick and choose which services they solicit from which cloud, based on what best serves their needs of the day, at the best price

All of which leaves MSPs stuck in the middle. IaaS represents the chief growth area for most as they seek to evolve their businesses beyond the legacy on-premise model, architecting and managing an on-premise data centre with expertise in only one vendor.

This multi-cloud tug-of-war will likely continue for years to come. Can most MSPs afford to remain a one-trick pony, or even a two-trick? It just isn’t enough to expand into the cloud by delivering services from only one cloud vendor in addition to whatever they continue to do on-premise. Their enterprise clients are looking for more.

If the overall IaaS market is growing by 30 per cent or so per year, a forward-looking MSP should be considering what investments they must make to ensure their business grows at the same pace.

If you have a private hosted data centre that resells compute and storage and your business isn’t growing at the industry average, money is being left on the table. Or, at the risk of being obnoxiously blunt, your customers are going elsewhere to get what you are not capable of providing.

It’s time to give serious thought to what those market numbers from Gartner mean for your MSP business. The Big Three are not growing in the cloud space by doing things the old way, selling compute and storage services on a fixed contract for a monthly fee. Their customers, your customers, are actively looking for more flexibility and convenience and having no trouble finding it.

What tools are out there that will allow you as an MSP to digitally transform your business, and business model, to grab a share of that pie?

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