Gartner Report Analysis: Can Other IaaS Providers Compete With AWS and Azure?

January 18 2016 | by Yoav Mor

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The global cloud infrastructure services sector is rapidly expanding. But, despite the consistent flow of new players to the IaaS arena, the big four, Amazon, Microsoft, IBM and Google, are tightening their grip on the market. Their combined share is now more than half of the entire market. And competitors, such as Rackspace and CenturyLink, are playing catch-up to match their success in attracting enterprise and midmarket customers.

Of the leading four, Amazon Web Services (AWS) and Microsoft Azure are far and away the most dominant forces in the business. And they’re pulling away from the competition. Gartner recently published Critical Capabilities for Public Cloud Infrastructure as a Service (IaaS) – a report that was led by distinguished cloud analyst, Lydia Leong. It illustrated just how the leading positions of these two providers go far beyond the strength of their branding. The study found that their public cloud offerings continued to forge ahead of the competition in terms of their quality and range of standard capabilities. In this post, we analyze the report’s findings and explore what the competition needs to do to close the gap on the runaway market leaders.

What Made AWS Stand Out?

Although the report stressed that all of the vendors who were included in the study generally provided high-quality service, AWS outshone the competition in nearly every department.
It scored highest in six of the eight capabilities, backing up much of our own analysis of EC2 in our blog.

The report described the platform as a highly sophisticated IaaS offering, with the most extensive range of features and services, that are capable of meeting the needs of most customers. The service is well suited to organizations with a large number of users, where account management is important. It is perfectly adapted for large-scale data processing and meets most requirements for security and regulatory compliance. It hosts an extensive software marketplace, provides excellent scaling and provisioning capability and is the platform of choice for a DevOps way of working.

Product/Service Rating on Critical Capabilities:


Learn more about AWS’ success: $7 Billion Forecast and 33 Other Numbers about AWS

What’s the Appeal of Azure?

Microsoft Azure still lags some way behind AWS on standard capabilities, but nevertheless ranked a strong second in the Gartner report. The platform is relatively young by comparison, but is continually evolving and developing new services and functionality.

It has one key advantage over EC2 – the fact that it’s a particularly good fit for customers with existing Microsoft deployments. But Microsoft also comes close to AWS on several standard capabilities. These include scaling and provisioning VMs, large-scale data processing and storage, and enterprise integration features, such as data migration.

Choose which price-performant cloud you prefer with this AWS vs. Azure detailed analysis

What Do the Other Vendors Have to Offer?

With so much flexibility and so many available options, it’s easy to see why AWS leads the field by a considerable margin. But many vendors still have a place in the market, with their own set of distinct capabilities that cater to specific user requirements.

IBM SoftLayer scored relatively poorly in most categories, yet it offers strong bare-metal capabilities. This could prove to be a winner for customers who need a cleaner and faster processing environment and also want to avoid the potential problem of noisy neighbors on multi-tenant virtual servers. Joyent also offers unique features. In particular, its container-oriented infrastructure will appeal to developers. And Virtustream puts a strong focus on running SAP applications in the cloud.

What’s more, amongst the providers that were included in the study, CenturyLink, CSC, Google and Virtustream all outperformed AWS on their computing resilience. This could make them a better choice where single VM availability and reliability are critical.

How Do the Other Services Need to Improve?

AWS and Microsoft are now so far ahead, it’s difficult to single out particular areas where the competition needs to improve. The cloud infrastructure market is still growing. And many vendors could potentially build a long-term business model by focusing on niche requirements rather than a broad service. What’s more, according to the Gartner report, organizations don’t need to restrict themselves to just one IaaS provider. So much of the IaaS competition may still have a future role as a secondary platform to EC2 or Azure. But some vendors will need to match the depth and breadth of Amazon’s service if they want to grow and survive. The three most common individual areas of improvement are:

Scaling: Many customers are attracted to cloud infrastructure services for their convenience, flexibility and scalability. According to Gartner, most vendors provide “static autoscaling”, which means users can automatically stop and start instances from a preprovisioned instance pool. But AWS is more flexible and supports “dynamic autoscaling,” which means once autoscale is set, provisioning and deprovisioning are performed from scratch and are inherently supported by the infrastructure.

User Management: The study highlighted a number of offerings that need to provide better role-based access control (RBAC), user account management and governance. This is especially important if these vendors want to attract more mid-market and enterprise customers that require integration with their on-premises directory services, such as MS Active Directory. For example, with their bare-metal service, SoftLayer can be very useful for running traditional enterprise workloads. But without strong integration capabilities, such as those offered by AWS AD Connector, SoftLayer will continue to lose ground.

Third-Party Services: Cloud service providers can enhance their offerings and accelerate innovation with a strong ecosystem. This is where both Amazon and Microsoft have a distinct advantage in that they’ve already been running their partner programs for years. For example, Amazon now has more than 1,000 technology partners that provide their solution through the AWS Marketplace, allowing users to deploy services with a single click and be billed through AWS. Building such an environment, however, is something few competing vendors will ever match without first achieving wider adoption.

So What about the Future?

The gap between the two leading players and the competition is widening – both in terms of market share and the value they offer. So if other providers want to stay relevant in the marketplace, they may need to focus more on niche markets, specialist services and maybe find creative payment models rather than attempt to compete on standard capabilities.

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