Plus 5 Observations on the Market Landscape

Last year, we opined that the cloud market, based on our read of the Gartner Magic Quadrant for Cloud Infrastructure as a Service, had grown up.  If 2013 was the year of maturity, 2014 is the year the market hit the gas.

Download the Magic Quadrant reprint here, and take a look at the findings for yourself. You’ll notice that most vendors are lower and to the left than they were when the last MQ was published. This market raises the bar at a rapid pace – and only a handful of companies have been able to improve their standing by adding new features and new customers.

Per usual, the cloud team at Gartner doesn’t take vendors at their word, but instead dives into each vendor’s product portfolio, while conducting countless customer interviews.  Their findings on CenturyLink?

This is a brilliant summary of our platform.  Further, it reflects our slogan of “IT-Ready, Developer-Friendly.” Delivering a platform that delights both constituencies is our core focus.

What about the future?

With IT and developers in mind, we’re building our platform, 21 days at a time.  In the coming months, enterprises will consume managed services and other infrastructure products via the CenturyLink Cloud UI.

This comment really stood out to us.  We talk a lot about infrastructure today, but in a few years, the conversation will go up the stack to focus more on application services – whereby the underlying infrastructure needs to be application-fluent.  As Gartner notes, this is a big part of our vision, along with Cloud Foundry and their growing ecosystem.

Here’s a few other observations of noted after reading the 2014 Gartner Cloud IaaS MQ:

  1. Consolidation - but not as much as some thought.  Most of the players have survived in tact since August 2013.  CenturyLink includes the products from Savvis and Tier 3, while IBM and SoftLayer combine.
  2. Scale and deep pockets matter.  Analysis from Jack Clark at the Register (including his article on our recent price reduction), and now the positioning on the MQ, reflects the reality that two camps have the ability to compete over the long-term: the large Internet companies with consumer businesses to subsidize their cloud build outs; and the traditional enterprise IT brands with a diverse portfolio of services.  If you don’t fall into one of these categories, your position is likely weakening.
  3. Managed services and cloud – the next wave of enterprise differentiation?  By our count, there are only 6 companies that appear on both of the most recent Cloud Infrastructure and Managed Hosting Magic Quadrants.  As enterprise adoption of cloud matures, these are likely to become attractive services as IT seeks to further outsource tactical applications, all while getting the inherent benefits of cloud computing.  But as Gartner notes, customers are not going to settle for a vanilla IaaS offering just to reap the benefits of managed services.  Vendors need to be highly competitive in both areas if they want to succeed.
  4. Convergence.  Technology is at its best when it’s invisible.  With cloud infrastructure, so much complexity is abstracted away from the user.  But it’s still too hard to manage multi-tenant workloads alongside those that have different isolation requirements.  That difficulty will go away soon.  In addition, Gartner predicts that IaaS and PaaS will overlap.  These are not the tidy product categories that many vendors talk about today; Gartner notes that customers will “decide on a trade-off between control and convenience” from a range of blended services.
  5. Customers are looking for strategic partners as their cloud spend grows.  For as quick as the market is moving, the IT spend is shifting to cloud even faster.  In fact, “Gartner’s 2013 CIO Priorities Survey indicates that 28% of CIOs expect to source all critical applications and operations via the cloud by 2016, and 55% expect to do so by 2020 (see “Hunting and Harvesting in a Digital World: The 2013 CIO Agenda)”.  This, in turn, means that most businesses are increasingly viewing vendors as a “long-term strategic partner,” instead of on a tactical “per project” basis.

Each cloud vendor has a story to tell. We would love to hear about your plans for cloud, then discuss how we can help.

1“Magic Quadrant for Cloud Infrastructure as a Service,” Lydia Leong et al, May 28, 2014