Yesterday Gartner gave its quarterly forecast on enterprise IT spend. For the first time it produced a more in depth look at public cloud spend. The title of the update, ‘Cloud is the Silver Lining’, nicely summarises the results. Gartner states there will be a decreased spend in enterprise hardware computing and a significant increase in IT outsourcing.
The biggest beneficiary of this will be cloud infrastructure as a service (IAAS) which is estimated to grow at 41% CAGR. Furthermore, between 2012 and 2016 the spend on public cloud is predicted to double from around $100bn to $200bn. All of this at a time where overall IT spend shows no significant growth.
This reinforces Flexiant’s firmly held belief that this is the decade of the cloud service provider. Indeed we are the only company with a cloud orchestration solution that is service provider ready and that will enable service providers to capitalise on this predicted growth in demand.
However, the Gartner analysis is only part of the story. There is growing evidence that the current investments in wholly owned, enterprise private clouds will also migrate to service provider owned, hosted private clouds. In this scenario the enterprise will retain systems management control. Recent research, sponsored by Microsoft showed that, even at this early stage, over half of respondents agreed that most of internal IT will be based on private clouds and already one third agreed that most of this will be externally hosted.
It is becoming increasingly clear that the industry is finally waking up to the reality of business logic and the influence of technology innovation. Why would any enterprise continue to carry the overhead of owning and managing infrastructure if it was not mandated by regulation or governance issues?
The opportunity for service providers reaches far beyond the creation of public and hosted private clouds and Flexiant is at the forefront of preparing them to seize both existing and emerging opportunities.
Finally, if any further evidence is required, we need look no further than those who are placing financial bets. The venture capital community is extremely active at the moment and the founder of OpenView Venture Partners, Scott Maxwell, is on record as saying
“I fully expect that cloud service providers will be the dominant location for server loads over the next decade or two. Only companies that have the largest data center needs or specialized needs will be running their own data centers in the future.”
Flexiant is working on a number of initiatives to help service providers understand where market opportunity exists and how they can capture the revenue and margin growth opportunities that are being created. As a first step in joining us on our quest why not download our paper “The Future of the Service Provider”.
This really is the decade of the cloud service provider.