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How ecosystems turn cloud technology into solutions

As enterprise customers’ cloud deployments mature, they are exploring a greater variety of technology-enabled business processes. This trend presents a substantiative opportunity for cloud platform contenders but demands new ways of working with ecosystem partners. While independent software vendors (ISVs) add depth and breadth to portfolios, bringing solutions to market requires greater involvement from SI and consulting entities that understand the processes customers are aiming to modernize, particularly considering the resurgence of industry-led solutions and services.

In this exclusive TBR webinar, Principal Analyst Allan Krans and Senior Analyst Evan Woollacott will discuss the evolving ecosystem among cloud platforms, ISVs and professional services firms as well as best practices developing in the cloud space.

Don’t miss:

  • Review of cloud platform latest portfolio initiatives
  • The role of ISVs in platform programs, and how these programs are encouraging partner buy-in
  • Professional services and consulting firms acting as the tip of the spear to vendor go to market

Register today to reserve your space

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

Cloud migration rises to top as central IT investment for driving IaaS and PaaS adoption

Cloud migration rises to top as central IT investment for driving IaaS and PaaS

Key Insights

The pandemic has laid bare the benefits of the cloud, serving as a proof point for the central role cloud plays in supporting organizations’ short- and long-term digital transformation road maps.

COVID-19 has dramatically accelerated the timeline for cloud adoption for many organizations, with public cloud as the most common method of delivery for IaaS and PaaS workloads.

The use of cloud professional services will continue to grow due to the challenges of migrating increasingly complex workloads to the cloud while working in a remote environment.

TBR’s Cloud Applications Customer Research tracks how customers are modernizing application environments and choosing between different cloud delivery methods. Leveraging in-depth conversations between TBR and enterprise customers, the Cloud Infrastructure & Platforms Customer Research provides subscribers with actionable insight that they can use to better understand their customers’ behavior and win cloud infrastructure deals. Topics covered for both reports include public, private and hybrid delivery options; decision-making involvement and criteria; leading vendor perception; field positioning and competition guides; and the impact of emerging trends (e.g., containers, security, platforms).

With Project Apex, Dell aims to surround the public cloud and tame it

At the virtual Dell Technologies World on Oct. 21 and 22, the company painted a picture of the future, a picture it calls Project Apex. “Apex” can refer to a summit, but it is also the term used to describe the top predator in an ecosystem. Dell Technologies spokespeople did not clarify which definition they intended in naming the project, but it is likely that the predator definition is used widely within the organization. The company aims to use Project Apex to conquer not only public cloud providers, its biggest threat, but also competitors that have similar offerings, such as Hewlett Packard Enterprise (HPE) and Lenovo.

Project Apex is a combination of Dell Technologies Cloud and the company’s goal of offering everything “as a Service.” Dell Technologies Cloud is a multicloud system that includes public and private clouds as well as all of an organization’s assets. Dell Technologies is prepared to manage these assets, both on premises and in the company’s data centers. This system combines the benefits of public cloud — demand-based pricing, simplified operation and outsourced management — with those of on-premises resources — greater control and flexibility, and more efficient use of edge devices. Dell Technologies intends to surround and engulf public clouds.

Project Apex is similar to HPE’s GreenLake initiative, which has the tagline, “The Cloud That Comes to You.” It is not surprising that the two largest data center hardware companies have similar strategies. In fact, while Lenovo’s multicloud and consumption-based pricing strategies are promoted less than those of Dell Technologies and HPE, Lenovo is moving in the same direction. These common strategies are a response to a common threat: the public cloud. Public cloud providers are meeting an increasing share of organizations’ computing and storage requirements, reducing hardware providers’ revenue and profits. All data center vendors have cloud service providers (CSPs) as customers, but CSPs’ scale and ability to provide their own services drive down hardware companies’ margins. The public cloud is a threat, and these combinations of multicloud offerings and consumption-based pricing are the hardware companies’ countermeasure.

Dell Technologies paints a rosy picture of the future, with free movement of data and workloads from the edge to the cloud and everywhere in between. This kind of fluidity would make it much easier for companies to implement and refine large numbers of diverse applications, enabling responsive and flexible digital transformation. The future, of course, is never as bright as pictured in the brochures. But the technology world is making progress in that direction, and Dell Technologies, as the self-defined provider of “essential infrastructure,” is well positioned to deliver it, albeit incrementally.

Project Apex includes the major technologies and techniques that fuel digital transformation. Dell Technologies Chairman and CEO Michael Dell listed six: hybrid cloud, 5G, AI, data management, security and edge. Every large IT system will include these components as well as others. 5G is especially interesting because, apart from critical hardware components for data transmission, it is a software-defined system, giving networking the flexibility that underpins Project Apex.

Project Apex is more a direction than a goal, and Dell Technologies and other tech companies have been moving in that direction since virtualization and its inevitable offspring, the cloud, became important. With the increasing importance of edge devices and edge-generated data, the Project Apex vision, where the public cloud is part of the picture but is no longer dominant, becomes more plausible.

Right now, however, the public cloud is growing rapidly at the expense of traditional on-premises data centers, and hybrid multiclouds are mostly just a vision. There is progress in “as a Service.” Dell Technologies on Demand, the company’s “as a Service” portfolio, now has a $1.3 billion annual run rate, reflecting 30% year-to-year growth. Annual recurrent revenue, which includes traditional financing and services, is $23 billion. Dell Technologies and the other hardware vendors cannot really see the light at the end of the tunnel, but they can describe it.

Remote work requirements will accelerate cloud adoption road maps, fueling public cloud growth

With Amazon Web Services (AWS), Microsoft, Google and Alibaba established as the IaaS cloud market leaders, Technology Business Research, Inc. (TBR) has noted an increase in partner ecosystem activity, particularly among IT services vendors, such as Accenture, Infosys and Cognizant, that are vying for a share of cloud services like migration and implementation.

Consolidation will accelerate as leaders embrace coopetition, evidenced by activity from Microsoft and Oracle that allied to target AWS’ dominance in the IaaS space. This trend will further separate the leaders from the rest of the pack while creating an adjacent opportunity as customers deploy multivendor and hybrid cloud environments — which bodes well for infrastructure specialists such as IBM’s Red Hat and VMware, particularly as the latter maintains its emphasis on being vendor agnostic. Further, TBR expects rising enterprise appetites around technologies like containerized applications will facilitate PaaS market momentum in the near term as customers develop and test the application frameworks internally before making them live on their hybrid architectures.

Public Cloud Market Forecast 2019-2024E

Overall Forecast

Though the COVID-19 outbreak is impacting the public cloud market, benchmarked vendors with the largest market share are positioned to protect their leadership, as a diverse install base buffers spending slowdowns in industries such as hospitality. Other vendors are relying on strategic investments in areas like data integration and multicloud management to carve footholds in PaaS and become more attractive among infrastructure leaders that are increasingly embracing vendor agnosticism to expand their IaaS addressable market.

Public cloud remains the largest and fastest growing segment of the cloud market. The outbreak of COVID-19 has forced enterprise customers to increase their usage of cloud infrastructure and solutions, a trend that will benefit leading cloud providers and lead to further consolidation in areas such as IaaS and PaaS through the current forecast period. The Public Cloud Market Forecast details how hybrid deployments, new use cases for enterprise apps, and trends in emerging technology will make public cloud even more relevant in the future.

Cloud supports enterprise needs related to COVID-19, facilitating public cloud revenue growth

Cloud supports enterprise needs related to COVID-19, facilitating public cloud revenue growth

With Amazon Web Services (AWS), Microsoft, Google and Alibaba established as the IaaS cloud market leaders, Technology Business Research, Inc. (TBR) has noted an increase in partner ecosystem activity, particularly among IT services vendors, such as Accenture, Infosys and Cognizant, that are vying for a share of cloud services like migration and implementation.

Consolidation will accelerate as leaders embrace coopetition, evidenced by activity from Microsoft and Oracle that allied to target AWS’ dominance in the IaaS space. This trend will further separate the leaders from the rest of the pack while creating an adjacent opportunity as customers deploy multivendor and hybrid cloud environments — which bodes well for infrastructure specialists such as IBM’s Red Hat and VMware, particularly as the latter maintains its emphasis on being vendor agnostic. Further, TBR expects rising enterprise appetites around technologies like containerized applications will facilitate PaaS market momentum in the near term as customers develop and test the application frameworks internally before making them live on their hybrid architectures.

Public cloud remains the largest and fastest growing segment of the cloud market. The outbreak of COVID-19 has forced enterprise customers to increase their usage of cloud infrastructure and solutions, a trend that will benefit leading cloud providers and lead to further consolidation in areas such as IaaS and PaaS through the current forecast period. The Public Cloud Market Forecast details how hybrid deployments, new use cases for enterprise apps, and trends in emerging technology will make public cloud even more relevant in the future.

IaaS utility pushes hosted private cloud leaders to ramp up investments in flexible, vendor-managed solutions

IaaS utility pushes hosted private cloud leaders to ramp up investments in flexible, vendor-managed solutions

Infrastructure services hosted as single-tenancy offerings remain desirable to customers that are looking to bridge the gap between utilizing public clouds and building their own private clouds on premises. The global COVID-19 outbreak weighed heavily on many IT vendors’ business models during the quarter; however, the hosted private cloud space was less susceptible to the economic impacts of the pandemic given the annuity-based revenue streams gained through cloud sales. Long term, TBR expects the hosted private cloud market to record pockets of growth as we expect COVID-19 to prompt greater cloud usage, and many customers will turn to private cloud solutions as a preliminary step in the digital transformation process. Further, benchmarked vendors will benefit from enterprises’ increasingly hybrid scenarios, which are generally purchased on a workload-by-workload basis.

The Hosted Private Cloud Benchmark analyzes different enterprise use cases and vendor strategies. For example, the benchmark looks at how workloads such as ERP will drive demand for hosted private cloud SaaS due to the mission-critical nature of those services and their associated data.

Amid a consolidating market, vendors adopt creative initiatives to fight for mission-critical cloud workloads

Public cloud growth leaders

While Amazon Web Services (AWS) continues to dominate the public cloud IaaS market, its rivals continue to expand in the space and even collaborate to take market share. Microsoft and Oracle added a new data center interconnection in Amsterdam, deepening the ties between the vendors as they enable customers to run Oracle workloads on Azure and integrate workloads between the vendors’ clouds. TBR believes Microsoft and Oracle will continue to improve their competitive position against AWS as more data center interconnections are added. In addition, TBR expects Alibaba will become a growing threat to AWS and other U.S.-based vendors as it builds out data centers in APAC and EMEA.

1Q20 Public Cloud: Percentage of Revenue Growth vs. Absolute Dollar Growth

Public cloud remains the largest and fastest growing segment of the cloud market. Changes in customer acceptance, data integrations and innovation have combined to sustain the rapid growth of public cloud adoption. The Public Cloud Benchmark details how hybrid deployments, new use cases for enterprise apps, and trends in emerging technology will make public cloud even more relevant in the future.

IaaS providers focus on global expansion, while vendors with remote work-enabling SaaS capitalize on demand

1Q20 Public Cloud Benchmark infographic

While Amazon Web Services (AWS) continues to dominate the public cloud IaaS market, its rivals continue to expand in the space and even collaborate to take market share. Microsoft and Oracle added a new data center interconnection in Amsterdam, deepening the ties between the vendors as they enable customers to run Oracle workloads on Azure and integrate workloads between the vendors’ clouds. TBR believes Microsoft and Oracle will continue to improve their competitive position against AWS as more data center interconnections are added. In addition, TBR expects Alibaba will become a growing threat to AWS and other U.S.-based vendors as it builds out data centers in APAC and EMEA.

Public cloud remains the largest and fastest growing segment of the cloud market. Changes in customer acceptance, data integrations and innovation have combined to sustain the rapid growth of public cloud adoption. The Public Cloud Benchmark details how hybrid deployments, new use cases for enterprise apps, and trends in emerging technology will make public cloud even more relevant in the future.

Trailing vendors collaborate to better compete against market leaders, which are expanding globally

Public Cloud Market Summary

Amazon Web Services (AWS) and Microsoft remain leaders in public cloud, but their cloud strategies are extending well beyond the segment as they also enable hybrid environments with internal hybrid cloud offerings such as Azure and Azure Stack that entice enterprises with latency-sensitive or regulated workloads to leverage cloud environments. Microsoft is improving its competitive position against AWS through partnerships, notably its direct data center connections with Oracle. Although only a limited number of regions support these direct connections currently, the Microsoft-Oracle partnership is expanding with new direct connections in Canada. However, AWS holds significant IaaS market share and remains the leading IaaS provider as of 4Q19.

While both vendors still offer IaaS, IBM and Google have taken unique approaches to winning enterprise customers through vendor-agnostic and Kubernetes-based PaaS. IBM holds a greater share of this market as it attained a strong IBM Cloud Private customer base prior to the launch of Anthos, and IBM’s acquisition of Red Hat grew IBM’s position in the space. TBR expects that both IBM and Google will be successful with this vendor-agnostic strategy as many enterprises look to leverage Kubernetes-based PaaS for their hybrid environments, evidenced by IBM’s customer base of more than 2,000 clients using Red Hat and IBM container solutions — such as IBM Cloud Paks — as of 4Q19.

Public cloud remains the largest and fastest growing segment of the cloud market. Changes in customer acceptance, data integrations and innovation have combined to sustain the rapid growth of public cloud adoption. TBR’s Public Cloud Benchmark details how hybrid deployments, new use cases for enterprise apps, and trends in emerging technology will make public cloud even more relevant in the future.