By Amber E. Watson
Popular cloud segments, including Software-as-a-Service (SaaS), Infrastructure-as-a-Service (IaaS), and Platform-as-a-Service (PaaS) represent rapidly growing markets in which service providers are focused. Emerging cloud-based solutions aim to help businesses large and small enjoy the convenience of IT in the cloud.
IDC estimated worldwide spending of public IT cloud services to reach $47.4 billion in 2013. It expects the category to reach more than $107 billion by 2017. Over the 2013 to 2017 forecast period, the firm forsees public IT cloud services to experience a compound annual growth rate (CAGR) of 23.5 percent—five times that of the IT industry as a whole.
Additionally, according to research presented by Gartner at its Indian Symposium in October 2013, cloud computing will account for the majority of new IT spent by 2016, and by the end of 2017, nearly half of large enterprises will have hybrid cloud deployments.
As noted above, cloud-based platforms and applications (apps) represent strong future growth across both public and private SaaS, IaaS, and PaaS implementations.
“Currently, the private cloud is the most popular cloud deployment model across various sectors,” shares Chris Howard, research VP, Gartner, but it is not appropriate for all services. The majority of midsize and large enterprises will still deploy a private cloud over the next few years, according to the research firm, but it will only be used for specific services.
By 2017, IDC expects public IT cloud services to drive 17 percent of IT product spending and nearly half of all growth across five technology categories—apps, system infrastructure software, PaaS, servers, and basic storage. SaaS is expected to remain the largest public IT cloud services category throughout the forecast, capturing 59.7 percent of the revenues in 2017. The fastest growing categories will be PaaS and IaaS, with CAGRs of 29.7 and 27.2 percent, respectively.
While Gartner estimates that the overall public cloud IaaS market is around $6 billion, when compared to the estimated $3.7 trillion dollars spent on IT, this is a small portion of enterprise budgets.
Dimension Data sees a massive opportunity for the growth of the public cloud across SaaS, PaaS, and IaaS as companies migrate more enterprise apps out of data centers and into public and private cloud environments. “Enterprise apps, particularly production and disaster recovery, represent a large growth opportunity for the cloud, not where the public cloud is focused today with mostly temporary workloads and Web apps,” states Yogesh Rami, senior director of product and partner marketing cloud business unit, Dimension Data.
Over the past year, improvements in software, increased adoption, and a maturity of cloud platforms led to a paradigm shift to the cloud for disaster recovery. General security concerns are reversing too. In a recent Bluelock study, 82 percent of respondents stated they feel the public cloud is safe and secure. A separate study by Hostway discovered that 62 percent of respondents felt their key services were more secure in a public cloud environment, which is a significant change from previous years.
Cloud-based disaster recovery, often referred to as Recovery as a Service (RaaS), includes all the value of a traditional cloud model, including elasticity, scalability, and flexibility. “RaaS allows businesses to add or remove as many apps to a virtual protection group as desired, based on its risk levels at the time. Bluelock’s RaaS solution is also self service, so users maintain control over what they are protecting, and in what way it is protected, and may run a recovery test or declare a disaster at any time. Many cloud-based recovery solutions are non-disruptive as well, so they can protect existing apps without requiring additional hardware or service disruption,” shares Pat O’Day, CTO, Bluelock.
Bluelock Virtual Datacenters that are hosted in the public cloud provide flexible IT infrastructure solutions.
For businesses wary of the cloud due to security and compliance concerns, a hosted private cloud is an option that leads to similar benefits while maintaining protection, privacy, and compliance of workloads.
Serving Each Sector
Cloud computing provides convenient, on demand, shared network access among users and is often described as a “stack” which includes the broad range of services built on top of one another—IaaS, PaaS, and SaaS.
As Steven Martin, GM, Windows Azure Business and Operations, Microsoft, points out, “IaaS is computing, networking, and storage power in the cloud that is used to run an app, oftentimes one that is already built. PaaS provides the tools and services needed to build and deliver a cloud app, often from scratch. SaaS makes use of a cloud computing infrastructure to deliver one app to many users—regardless of location—rather than the traditional model of one application per desktop.”
SaaS is a rapidly growing market. Enterprises and ISVs continue to recognize SaaS as a core component to their business strategy, and institute plans to migrate to this flexible consumption model. Increasingly, Dimension Data sees pure SaaS companies competing with ISVs for larger customers, which increases the stakes for these companies to offer software tailored for the enterprise. However, according to reports from IDC, of the top 100 global software leaders, SaaS only represents 4.9 percent of overall revenue. To remain competitive and reap the benefits of cloud-based delivery of software, the company anticipates the migration to SaaS to become more aggressive in 2014, with additional providers offering more managed services to simplify the transition.
“As the number of large software vendors with a SaaS-based model grows, the focus shifts from supporting a small business customer base to delivering software suitable for the enterprise,” explains Rami. “This leads to several challenges for ISVs, including the need to offer software globally.”
Finding a cloud provider partner that matches the need for in-region data centers similar to global customer requirements remains a key decision point for ISVs leveraging SaaS to scale business.
IaaS is a way of delivering cloud-computing infrastructure—including servers, storage, network, and operating systems—on demand. IaaS adoption and growth increases are also supported by research organizations such as Forrester, which forecasts the global market for cloud computing will grow from $40.7 billion in 2011 to $241 billion in 2020.
IDC predicts that by 2015 about 24 percent of all new business software purchases will be service-enabled software.
“IaaS provides the flexible infrastructure for SaaS that allows ISVs to scale operations, bring services to market more quickly, and offer reliable, highly-available apps to their customers globally,” adds Rami. “Depending on the provider, IaaS can also offer granular controls that allow businesses to tailor the compute capacity directly to their needs and realize cost efficiencies by not having to pay for unused servers/capacity.”
Self-service provisioning and auto-scaling also create efficiencies that reduce IT staff management time and costs.
IaaS is primarily used to provide additional capacity on demand. “With IaaS, companies solve an identified problem, such as insufficient IT capacity that was resulting in slower business objective execution,” explains O’Day. “By adding dynamic capacity to the existing datacenter through IaaS, the roadblock is removed. By adding cloud-based RaaS, businesses protect existing IT systems and apps from prolonged downtime.”
In addition, IaaS and RaaS allow small and medium businesses to compete at the same level as enterprises by allowing access to similar technologies at an affordable price.
Lastly, PaaS benefits the software development world and allows the creation of quick and easy Web apps without the complexity of buying and maintaining the software and infrastructure underneath it. PaaS is analogous to SaaS, except that rather than delivered over the Web, it is a platform for the creation of software delivered over the Web.
The line between PaaS and IaaS is becoming more blurred as vendors introduce tools as part of IaaS that help with deployment.
Microsoft’s cloud platform spans IaaS, PaaS, and SaaS. This cloud infrastructure is available to customers and partners to build and operate their own clouds.
Microsoft’s public cloud, Windows Azure PaaS and IaaS, is available in 109 countries and backed by $15 billion it has invested in global data infrastructure. The company estimates that 50 percent of the Fortune 500 are using it, and on average more than 1,000 customers sign up every day. Microsoft collaborates with organizations across the industry to provide third-party software and services in its cloud.
As for mobile, Windows Azure supports scalable mobile apps, so that within minutes, users can store data in the cloud, authenticate users, and push notifications to millions of devices. Identity and access management is also important. Windows Azure Active Directory delivers an enterprise-ready cloud identity service, enabling a single sign-on experience across cloud and on-premise apps. It allows multi-factor authentication for added security and compliance.
Microsoft also delivers first-party SaaS apps for business services like Dynamics CRM, Office 365, Yammer, and consumer services such as Bing, Outlook.com, and Xbox Live. The widespread use of services like Office 365 provides a foundation for other critical cloud technologies that enterprises adopt, such as identity and application management.
As a cloud service provider and systems integrator, Dimension Data helps ISVs transition from a traditional licensed software model to a SaaS delivery model, which enables companies to leverage outsourced infrastructure to reduce resources spent on managing hardware and on-premise environments.
Where We’re Headed
The main focus of a cloud OS strategy is to provide solutions that allow organizations to manage top IT challenges and opportunities, such as cloud computing models, big data, bring your own device, and app development.
In the future, Bluelock expects small- and mid-size businesses to benefit by competing on equal footing with enterprise companies by leveraging the cloud. Also, outages and failures of single datacenters will only cause a few minutes of disruption, at most, as delays in recovery continue to decrease and shorten with the new paradigm of all apps running in the cloud.
Given the small amount of revenue that SaaS represents for the overall software industry, Dimension Data sees tremendous opportunity for ISVs and SaaS players to grow their share of revenue through an expanded reliance on SaaS, especially in markets like the U.S. and Europe where many large software vendors are based.
In addition, Dimension Data sees both enterprises and ISVs leveraging the public cloud for more than just testing and development as we move into the future. “We believe that the future of cloud lies in using it to support production apps that represent the lion’s share of enterprise computer resources. The economic benefit of the cloud is truly realized only when it supports a majority of the IT infrastructure supporting enterprise apps,” notes Rami.
With all business aspects heading this way, it makes sense to ride the trend and get organizations on board with cloud conveniences. SW
Apr2014, Software Magazine