It's no secret that Amazon Web Services leads the Infrastructure as a Service market. The service provider's strength, vision and execution has forced Gartner Inc. to rescale its latest Magic Quadrant for cloud Infrastructure as a Service in order to demonstrate that no viable competitor has emerged to challenge the incumbent provider.
Amazon -- unlike many competing Infrastructure as a Service (IaaS) providers -- knew the market wouldn't be just about fast provisioning of virtual machines, said Lydia Leong, research vice president at Stamford, Conn.-based Gartner and lead author of the Magic Quadrant report. "Some IaaS providers thought the market would look like the managed hosting market with potentially a different type of infrastructure underneath … and then they didn't know where to go from there," she said.
There is little room in the cloud IaaS market at this point for new cloud startups to gain customer mindshare or for the development of differentiating features in a market where solid, core features -- like networking and security -- are expected and valued. However, competing IaaS providers can thrive by developing their own cloud ecosystem with third-party providers and by anticipating what their customers will be requiring in the future, Leong said.
Strength in numbers: The power behind the cloud ecosystem
The ecosystem that grew around Amazon Web Services (AWS) has helped establish the provider as a leader. Amazon's Marketplace contains independent software developers and systems integrators that integrate technology with AWS for customers. "The ecosystem makes a huge difference for providers in this space," Leong said. "There is a lot of power behind that momentum."
Amazon's position as one of the first cloud players also helped its climb to the top, said James Staten, vice president and principal analyst at Cambridge, Mass.-based Forrester Research Inc. Amazon's early success prompted other cloud startups and forward-looking service providers to configure their services to support or work on top of AWS.
"The ecosystem organically grew from there," Staten said. "Now, it's a culture more than anything else; AWS is doing nothing to make this ecosystem happen at this point."
While smaller providers could struggle with establishing their own cloud ecosystem around their offerings, IBM and Microsoft could emulate AWS' success because of the number of software and potential Software as a Service vendors in their partner programs, Staten said.
Enterprises are also starting to expand their list of potential IaaS providers, he said. "Businesses are now more seriously considering HP, IBM and Microsoft; any of the players that enterprises already have relationships with are now being considered for their cloud platforms."
IaaS providers: Always look to the future
AWS hasn't rested on its laurels. The provider immediately began adding new services and innovating on top of its core platform to address the evolving demands of its early adopters. Amazon has historically been an innovator in the cloud market, answering the "now what?" question and providing customers with tools to meet their evolving needs. Some -- especially smaller providers -- will struggle with where to go next, Leong said. "It really will come down to how much IaaS providers can invest, and then how quickly they can move," she said.
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Dimension Data, an IT service and IaaS provider based in South Africa, has differentiated its Managed Cloud Platform -- a unified architecture across its public and private cloud offerings -- by automating control of networks and partnering with Cisco in order to build an enterprise-class cloud capable of performance and control of not just servers and storage, but the network, too, said Keao Caindec, chief marketing officer of the cloud business unit for Dimension Data.
"Many of the earlier clouds were built on more [of] a utility model and the service-level agreements weren't as strong because the infrastructure was built for automation or big horizontal workloads," Caindec said. "As a systems integrator, we have a slightly different strategy -- we are providing cloud services as part of an overall IT solution."
As customers become more comfortable with the cloud as part of their IT strategies, enterprises are starting to ask for global implementation of their business applications, as well as regional disaster recovery and backup. "The cloud is starting to compliment [customer] data center strategies and they are asking for and expecting the same security measures in the public cloud [as] they would have [on-premises]," Caindec said.
Dimension data dropped from a leadership position to challenger status in the Magic Quadrant this year due to the relative distance between most IaaS providers and AWS, based on Gartner's point system on its Quadrant reports, Gartner's Leong said. "Points are awarded for differentiation, which has declined this year because many of the providers are offering the common IaaS feature set," she said.