It should surprise no one that the cloud computing industry is growing and creating a vast ecosystem of new businesses and services. What did surprise the smart folks at Forrester Research, Inc., however, is just how fast this industry is growing.
In the recent report, “The Public Cloud Market is Now in Hypergrowth” by Andrew Bartels, John R. Rymer, and James Staten, analysts at the firm said this will be a $191 billion industry by 2020, or 20% larger than it forecast in 2011. Software as a Service (SaaS) is the leading segment at $133 billion. However, cloud platform services – Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) – are on a rocket ride as well, with a 38 percent CAGR through 2020 to reach $44 billion. Business services such as Database as a Service (DaaS) and disaster recovery make up the balance.
“Cloud platforms are increasingly delivering higher availability, performance and security, making them viable candidates for an increasing number of production applications,” said Forrester about IaaS and PaaS. “The growth in use, maturity and financial viability of public cloud platforms are proving their long-standing value as legitimate deployment options for enterprise systems and applications.”
Many of the developments occurring in the industry that account for this growth have been available from Peak 10 for years. Take vertical industry focus and regulatory compliance, for example. The financial services, healthcare and credit card industries, and those handling government data, are heavily regulated and subject to major financial penalties for failure to comply. Not only has Peak 10 set the standard in the industry for being compliant with the laws and regulations affecting these and other industries. It designed specialized cloud services – a PCI-compliant cloud and a HIPAA-compliant cloud – optimized for customers subject to these standards.
Another driver is geographic expansion – international expansion in particular – and local presence. While Peak 10’s expansion has remained in the U.S. to this point, it continues in major markets across the country. There are advantages to this. One is the jurisdiction of data. Knowing precisely where data is stored is often a matter of regulatory compliance, which may be a reason why some providers have shied away from vertical-industry expertise. Another advantage is local serviceability — actually having people in the market you can consult with and hold accountable. Disaster recovery can also benefit when a provider can bring multiple, geographically dispersed data centers into the solution design.
In its report, Forrester points to another driver. Cloud platforms are increasingly delivering higher availability, performance and security, making them viable candidates for an increasing number of production applications. We’ve talked about security and compliance at Peak 10 already. Using the Cisco Unified Computing System, EMC storage systems and systems from other leading industry vendors, all rigorously managed according to industry best practices, performance and availability, have long been positive points of differentiation.
These advancements in the industry, and increasing recognition by the user community that cloud must become part of a larger IT strategy, are the factors responsible for this period of hyper-growth. “Their unique economic models and abstracted and automated services make them well suited for a growing portfolio of agile modern applications,” Forrester notes in its report.
At the same time, the user community is not throwing in the towel when it comes to their own data centers and moving wholesale to the cloud. Some combination of the two, described as hybrid cloud servies, will predominate in the future. As such, cloud adoption as a complement to on-premise computing is growing faster than cloud as a replacement for on-premise computing.
SaaS is clearly a cloud model that will be used heavily in hybrid cloud computing. Another good example of this is Database as a Service (DBaaS), such as Peak 10 offers. Forrester’s research indicates that DBaaS is inevitable as both comfort with cloud databases and their advantages for time-to market and scaling expand. “We don’t ever expect on-premises databases to go away, but we do expect cloud alternatives to make a sizable dent in their future market potential,” Forrester said.
Another inevitability is that the hybrid cloud of the future will be composed of many services from multiple vendors, leading to advancements in cloud service management tools. There is clearly an advantage to engaging with a service provider capable of providing multiple services in a coordinated, integrated fashion in a secure, state-of-the-art infrastructure.
Data storage, disaster recovery, hosting, compliant clouds, virtual desktop infrastructure (VDI) and managed security are but a few of the outsourced capabilities that will be elements in the hybrid cloud. These and more have been in the Peak 10 services portfolio since before this period of hyper growth commenced in earnest. As others in the industry add these piecemeal to their catalogs, Peak 10 is looking beyond that to new capabilities and services that will be important to the people it serves.