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May 19, 2015

IaaS spending grows, but is spend being ‘squandered’?

Gartner urges caution when selecting providers.


Global spending on IaaS is expected to increase by almost 33% from 2014 to 2015, resulting ina total spend of $16.5 billion.

With 2014 being a turbulent year for many cloud IaaS providers, it is expected that some will launch entirely new platforms, make substantial changes or move to providing managed services on some of the leading platforms.

Lydia Leong, Gartner vice president and analyst, said: "The sky is not falling — customers are getting great value out of cloud IaaS — but the competitive landscape is shifting. Few providers have the financial resources to invest in being broadly competitive in the cloud IaaS market."

"We urge buyers to be extremely cautious when selecting providers; ask specific and detailed questions about the provider’s roadmap for the service, and seek contractual commitments that do not permit the provider to modify substantially or to discontinue the offering without at least 12 months’ notice."

The market is being dominated by AWS, but increasingly Microsoft Azure and Google Compute Engine are vying for that top spot as between them they comprise the majority of workloads running in public cloud IaaS in 2015.

Gartner highlighted in its 2015 CIO survey that 83% of CIO’s consider cloud IaaS as an infrastructure option and that 10% are cloud first with it as a default infrastructure.

The most common use cases for cloud IaaS are developing and testing environments followed by high-performance computing and batch processing.

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Gartner suggests that a bimodal strategy should be adopted for cloud IaaS with organisations learning to operate in two modes.

Initially, most should adopt for Mode 2, agile IT projects that may be peripheral to the organisation’s IT needs. As the business becomes more comfortable with this use, it should be adopted in Mode 1, traditional IT projects.

Richard Davies, CEO, ElasticHosts, said: "It’s great to see this growth in IaaS, but the bad news for cloud users is a lot of this capacity spend is actually being squandered."

"Even in a cloud environment, people are still regularly over-provisioning by an average of 50% according to recent industry figures from IBM, McKinsey, Google and Gartner. As IaaS workloads continue to surpass the growth of on-premises workloads, this level of wastage is set to increase further."

"However, this could be set to change with the introduction of IaaS containers. Updates to the Linux kernel have enabled auto-scaling containers that can be billed by usage; by billing on usage, rather than capacity, users can be charged for the actual capacity they use, rather than the amount they provision."

"As companies grow their investments in public cloud infrastructure, being able to reduce these costs by 50% will make a significant difference to the bottom line."

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