Cloud computing is to grow 48.7 percent in 2012 according to Gartner:

The fastest-growing segment within the ITO market is cloud compute services, which is part of the cloud-based infrastructure as a service (IaaS) segment. Cloud compute services are expected to grow 48.7 percent in 2012 to $5.0 billion, up from $3.4 billion in 2011. 

Gregor Petri, research director at Gartner said:

“Today, cloud compute services primarily provide automation of basic functions. As next-generation business applications come to market and existing applications are migrated to use automated operations and monitoring, increased value in terms of service consistency, agility and personnel reduction will be delivered.”

At the start of this year Flexiant engaged with analysts, such as Gartner, to explain why we believed that value will migrate from enterprise IT to outsourced managed cloud services thereby creating ‘the decade of the service provider’. We explained that, unlike other vendors in the market, our primary customer was the service provider and that our development efforts exist to ensure that the service provider can capture the opportunities for growth that are emerging. Critical to this is the ability to meet the exacting service delivery expectation of the enterprise audience.

In February most analysts were warming to the concept of value migration, however one or two remained fixed in their belief that enterprise spend on internal IT infrastructure would continue to grow. We believed that this latter view was, and is, myopic.

In the last few months, Gartner and others have been producing data that better reflects the significant transfer of value that Flexiant has been witnessing. The service providers we are working with are in Olympic condition in their ability to rapidly develop, deploy, meter and bill differentiated services to meet growing and changing enterprise demands. Furthermore, many are in the process of aggressive international expansion and, as one client stated:

“We are no longer worried about commoditisation of services since our productivity and efficiency is so low that we can compete, at any price point and still make healthy margins.”

Service providers need to react now. If you are a service provider considering growth strategies or considering how to capture the growth of cloud services opportunities, I would encourage you to visit our Learning Centre.

This is the decade of the service provider. Gartner and others are finally publishing the hard data that shines the light on where true value will be created. It is critical that service providers know this information and need to understand the ramifications of not responding immediately to these market changes. It is not an accident that this is where Flexiant is strongest and uniquely positioned to help service providers.