451 Research Predicts AWS+1 Will Become Default Cloud Strategy In 2017
By Christine Kern, contributing writer
Analysts predict the rise of cloud services brokers, providing opportunities for MSPs
Cloud has become a default program for digital transformation and 451 Research asserts that, in 2017, the industry’s major competition will be over how, from where, and at what price these cloud transformation services are delivered to customers. Analysts predict the rise of cloud service brokers, with AWS+1 becoming the default cloud strategy in 2017 according to 451 Research’s new report, 2017 Trends in Cloud Transformation. The study examines key themes including the emergence of AWS+1 as an operating principle. In 2017, analysts believe CIOs will accelerate the use of AWS alongside a second public cloud service presenting other providers with new revenue streams.
451 Research finds a blended cloud strategy not only supports responsible financial planning, but also ensures CIOs are not locked into a single vendor or location while gaining the flexibility to match applications, workloads, and service requests to their Best Execution Venues. With an AWS+1 strategy, the CFO and CIO can demonstrate value, choice and flexibility for their balance sheet cloud expenditures.
“AWS is still the biggest player in the cloud space. In a decade AWS has achieved revenues of $12 billion and an enterprise value of some $150 billion, or half the market cap of Amazon.com. Looking at it another way — it took IBM a century to reach the same valuation,” said William Fellows, 451 Research vice president.
In 2017, the growth of hybrid cloud services will prompt the widespread use of brokerage to deliver the right combination of offerings to meet different needs. Brokers’ success will depend on their ability to deliver multiple cloud service types and for those services to be destinations for new application deployments, modernized (aaS), and migrated applications. As a result, 451 Research believes every services supplier — with the current exception of the hyperscalers — is becoming a cloud services broker.
Service providers will likely work to move into untapped markets and higher-value services, including application management, managed security, and business process hosting that are “beyond infrastructure” in order to survive, according to 451 Research. And 451 Research’s Cloud Price Index recently found that, with a multi-cloud approach, an enterprise can cut direct cloud expenditure by up to 74 percent.
A crucial element for 2017 is IT service providers must offer a more agile cloud-tasking delivery model to support digital transformation, leading to the use of cloud management platforms and business process management systems to link together existing systems with new apps that leverage technologies like machine learning to produce more efficient, simplified processes.
451 Research analysts predict the managed infrastructure and cloud market will grow for the next several years to encompass more than $129 billion in spending, with public cloud and hosted private cloud the pre-dominant sources of growth. By 2020, 451 Research predicts the IaaS market will be worth $25.5 billion, or 20 percent of the overall $129 billion hosted IT infrastructure market.
“This not a zero sum game — all segments of the hosted infrastructure market are growing — but the cost of participation is high, so few businesses will afford to build their own. Cloud is part of the managed infrastructure market which itself is more than five times bigger than the cloud market,” Fellows added.