Strong demand for cloud Infrastructure-as-a-Service (IaaS) is likely to more than triple the size of this market to $150 billion by 2023 as the approach helps enterprises in their digital transformation journey, said a Frost & Sullivan research report, adding that cost was not a primary factor in driving the growth.
The current market size is estimated to be $45.6 billion and is expected to grow at a compound annual growth rate of 27%, it said. The report added that enterprises are using the cloud for strategic benefits such as supporting their digital transformation journey rather than for tactical ones, such as reducing IT infrastructure costs and hardware/software maintenance burden.
This approach has changed the way enterprises choose and manage their infrastructure, and led them to deploy applications across multiple pieces of infrastructure, from on-premises to cloud (multi- and single-tenant), resulting in higher demand for IaaS, the report noted.
The Texas-based research and consultancy firm said that as the mix of deployment models and best-of-breed cloud IaaS vendors becomes increasingly diverse, single-tenant IaaS will gain revenue share over multi-tenant services.
"The emergence of cloud brokerage and cloud management platforms is boosting the trend of hybrid and multi-cloud, making managed cloud services providers key in supporting enterprises. Managed service providers (MSPs) will support companies with workload assessment and placement, workload migration, and hybrid cloud integration,” said Maiara Munhoz, senior industry analyst for cloud computing at Frost & Sullivan.
According to the report, the top two providers Amazon Web Services and Microsoft Azure control 74% of the global market. Among regions, North America and Europe-West Asia-Africa continue to be the top two markets while Asia-Pacific is fast catching up, it added.
“Some countries in the Asia-Pacific, like Japan and Australia, are more mature, while India, China, Singapore, South Korea, and Hong Kong are fast-growing markets,” Munhoz added.
Frost & Sullivan said that, increasingly, the cloud IaaS vendors will be required to invest in integrated services -- on-premises as well as in the cloud. They will also be expected to offer more advanced services in the cloud — such as containers and server-less architecture — and tools for enterprises to manage, analyse, and act on their data.
Also, the customers will expect the cloud IaaS vendors to support hybrid deployment models, as enterprises realise that a single cloud or deployment model will not address all their application requirements, Frost & Sullivan said, adding that they will be required to provide training to customers and partners.