The market for cloud services is growing by almost 30 percent. The three large providers Amazon Web Services (AWS), Microsoft, and Google, share two-thirds of it. A comparison of providers. In the current year, companies will invest around 1.4 billion euros in “Infrastructure-as-a-Service” (IaaS) solutions. This corresponds to an increase of almost 30 percent compared to the previous year. The market is now growing a little faster than the global business, as the new significant provider comparison, “ISG Provider Lens Germany 2019 – Cloud Transformation / Operation Services & XaaS” reports.
According to the study carried out annually by the market research and consulting company ISG Information Services Group, the major providers are currently expanding their leadership: For example, the IaaS business of Amazon Web Services (AWS) is growing by around 40 percent this year, and that of Microsoft is growing by around 40 percent around 60 percent. Together with Google as the third-largest provider, almost two-thirds of the market is now in the hands of these three hyperscalers.
The remaining third is shared primarily by IBM, Deutsche Telekom, Oracle, and several regional public cloud providers. In addition to the IaaS market for hyper scalers, ISG examined a total of more than 140 providers in nine sub-markets in the study.
“Microsoft is currently making up a lot of ground because it markets not only its cloud infrastructure but also ready-made solutions and product bundles for specific application scenarios,” .”In addition, medium-sized companies that already know Microsoft from numerous other services and products are now investing heavily in the public cloud.”
Google has also recently gained market share. The company has a substantial range of artificial intelligence (AI) and cloud productivity and has recently significantly expanded its partner network. For its part, with the acquisition of Red Hat, IBM has further strengthened its position, especially with a view to the company’s “hybrid cloud” know-how.
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“For the public cloud market, it is becoming apparent that providers are opting for one of two major strategies on the market: Either, like Microsoft, they think more in terms of solutions and best practice offers for certain application scenarios, or, like AWS, they offer a maximum number the smallest services that you can put together yourself – provided you have the appropriate know-how,” adds Oliver Nickels, Senior Advisor on behalf of the ISG Information Services Group. “In general, the following applies: Those providers will assert themselves who, because of the variety of available modules and solutions, can explain the concrete and practical benefits of, for example, AI to their customers.”
According to the ISG study, the IaaS offers of the hyperscalers do not differ much from one another. At the technological level, however, differences can be identified concerning the use of Software Defined Networking (SDN), container architectures combined with Kubernetes, and serverless computing.
These technologies have evolved into new standards. In this respect, the providers worldwide try to differentiate themselves from the more regional public cloud providers through extended functions, which they market under the “intelligent.” These are, for example, Robotic Process Automation (RPA), Identity Access Management (IAM), or encryption and cybersecurity solutions that use AI and neural networks. In the “Leader” quadrant of the “IaaS – Public Cloud Hyperscale” market segment, the ISG provider comparison shows five providers: AWS, Microsoft, Google, IBM, and Deutsche Telekom.
In addition to the providers of “IaaS – Public Cloud Hyperscale,” the ISG study analyzed eight further sub-markets and divided them into “Midmarket” and “Large Accounts”: “Public Cloud Transformation,” “Managed Public Cloud Services,” “SaaS – ERP for Midmarket, “SaaS – CRM, “SaaS – Enterprise Cloud File Sharing, “iPaaS – Integration Platforms, “aPaaS – App Development Platforms “and” IaaS – Enterprise Cloud. ”
For the path of public cloud transformation, the supporting service providers must offer a wide range of services, ranging from readiness checks to technical implementation. You act as a partner to the large public cloud providers, must know their advantages and disadvantages, and advise their customers accordingly.
According to the ISG study, this market is currently expanding faster than in international comparison, as both medium-sized and large companies in this country are now making investments made earlier in other countries such as the USA, Great Britain, or Scandinavia. According to the ISG study, companies are now also shifting business-critical corporate applications to the public cloud on a large scale.
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Public cloud services are now in demand not only from large but also from medium-sized companies as a managed service. Hybrid and multi-cloud models dominate, which constantly analyze new services and integrate them into the managed service offerings. As a top provider, AWS released around 1,400 new services last year.
THEREFORE, the ISG analysts name two skills as the most significant challenge for managed service providers: They have to know the offerings of the cloud providers in detail and harmonize them with the requirements and business processes of the user companies. ISG also sees a clear trend in managed public cloud services towards Microsoft Azure as the platform, number two behind AWS, and predicts that Google will also see growing business from the end of 2018. According to ISG, Oracle and SAP play an essential role, especially concerning ERP and database-based business portfolios.
In the IaaS enterprise market, the demand for regionally available and secure infrastructure solutions dominates. While medium-sized companies attach great importance to the fact that the providers provide resources on-site, large companies ask for a comprehensive portfolio, exceptionally high scalability and security, as well as a high level of innovation.
Integration-Platform-as-a-Service (iPaaS) has become an integral part of application architectures and is, therefore, a long-established market. In addition to functional differences, the providers differentiate themselves primarily in which long-term strategies they pursue in the market and how present they are ultimately on the market.
In the market for application platform as a service (PaaS), new terms such as “low-code” or “no-code” platforms are currently bringing movement, as these platforms are bringing new applications into operation more quickly than before. Looking at the providers, ISG found that they differ in two main ways: How understandable and how easy are the solutions to use? And how powerful and comprehensive are the features offered? In this regard, new, comparatively small providers are currently challenging the established large providers.
ERP (Enterprise Resource Planning) market as Software-as-a-Service (SaaS) is very mature. According to ISG, those providers who integrate apps and external systems in a well-designed cloud solution offer modern cloud management and have powerful security functions. In addition, the conservative SME customers prefer to keep their ERP data either with themselves or at least physically.
ISG diagnosed the SaaS CRM (CRM, Customer Relationship Management) market as having a low level of maturity. Although the solutions are often very comprehensive, many companies still do not use CRM systems at all. This is one of the reasons why providers whose solutions are easy to use and easy to integrate score points here. Above all, these are providers who are already among the market leaders in the traditional CRM market.
There are numerous providers in the SaaS market for enterprise cloud file sharing. According to ISG, the leading ones primarily offer transparent, secure, and encrypted solutions and have an excellent on-site presence.
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