Traditionally data centers generate the majority of their business from colocation, data center outsourcing, and hosting. The current and future impact of IaaS and PaaS is small but growing rapidly in this market. Gartner estimates the global DCS market generated $150B globally as of 2011, projected to grow to $200B in 2012.
IaaS and PaaS Will Define The Future of the DCS Market
With IaaS generating $4B in global revenues in 2011 and PaaS is generating $1.4B, together they contributed 3.6% of the total DCS revenues last year. The future direction of the DCS market, including the nature and trajectory of IaaS and PaaS, will be determined over the next three to five years by enterprise adoption of these platforms and the increasing move of enterprise applications to the cloud. In sizing the DCS market, it’s useful to take a look at the forecasts from Gartner of cloud application infrastructure and cloud applications as a proportion of enterprise application software. The following tables provide this analysis.
Cloud Application Infrastructure, Cloud Systems Infrastructure as a Proportion of Core ITO and Traditional Web Hosting (Dollars in Billions)
Cloud Applications as a Proportion of Enterprise Application Software (Dollars in Billions)
Mapping the Data Center Services Market – A First Approach
Gartner has proposed a Data Center Services Map and Market Compass for Enterprise Data Center Services, both of which are shown below. Taken as taxonomies for organizing the market, they are effective, resembling value chains in their structure. The Garter Data Center Services Map is shown below:
The Gartner Data Center Services Map
Source: Data Center Services: Regional Differences in the Move Toward the Cloud, 2012
Gartner’s Market Compass for Enterprise Data Center Services takes into account size, scope and management of data center (DC) applications by the use of sharing, pricing models and elasticity (Time to Provision Change) to create a market grid. These are considered to be the six most differentiating factors in DC performance in this model. The foundation of the Market Compass are shown below:
Gartner’s Market Compass for Enterprise Data Center Services
The Garter Market Compass can further be used to define which solution sets in the DCS market best align with a given business’ strategic and IT needs. Elasticity of infrastructure utility and cloud computing are, according to the analysis, the strongest growth factors in the DCS market today.
Analyzing the Six Main Segments of the Data Center Services Market with the Gartner Market Compass
Bottom line: As more enterprise applications migrate to the cloud, DCS providers will be forced to rapidly improve the elasticity and time provisioning options their platforms provide. All these changes will re-order the economics of cloud computing forcing DCS providers to greater level of flexibility that many have attained in the past.