Executive Summary: New World Order
The infrastructure services market has been around for two decades now and it has always had a very predictable quality to it. Things have changed over the years, but it has always been fascinating how much has stayed the same. Even when AWS entered the market back in 2006, it was just a curiosity for many years and few in the sector paid much attention to it.
Things have changed to say the least. There was a wave of cloud building in the period between 2008-12. Service providers of all shapes and sizes began to roll out cloud infrastructure services and shift to utility-based billing. Differentiation was tough to come by, as is often the case in infrastructure services, but support and user experience were two areas that were legitimately seen as weak spots for AWS, and service providers decided to battle in these areas.
There was initial optimism, but fast forward to 2018, and it is increasingly clear that the public cloud – not just AWS, but Azure, Google and others – is winning the battle for raw compute and storage infrastructure. Service provider-operated clouds have dropped out of the game and large technology entities such as Dell, HP and Cisco, along with a number of telcos, have exited the cloud compute market altogether. Along with Amazon, only Microsoft, Google, Alibaba, Oracle and IBM have stayed on the radar. Few if any new entrants are expected.
The rise of public cloud is undeniable, but it has not yet become a one-size-fits-all platform. And while it is difficult to project too far out, there are many reasons to believe that we may never get there. The reality of the competitive landscape is that end users will use multiple infrastructure deployment models and likely through more than one service provider. They will host in multiple locations and have a varied set of security, compliance, data location and performance requirements. The world will be hybrid and federated. It will be increasingly complex and require significant levels of refinement, optimization and management.
The service provider remains in a prominent position within this new world. It provides the underlying infrastructure, the networks and connective tissue (interconnection). While many service providers are increasingly asset-light, they are still very much involved with the end user.
MSPs and hosters are helping organizations migrate to cloud and optimize and manage the deployments once they are there. They are providing managed services and consulting and taking on a more strategic role overall. At the same time, they are still hosting infrastructure when the situation and requirements dictate. Meanwhile, service providers remain agnostic and heavy users of third party technology. They rely on technology to enable the services they provide and stay on top of the cutting edge. Things are changing faster than ever before and working with partners has become increasingly critical.
The new world order is complex and has more pieces than ever before. At the public cloud takes over at the centre of the infrastructure world, everything will flow from and connect to it.