Gartner Analysts Assess the Future of Cloud Infrastructure

• The comparison
• Tutorials
• Gartner Analysts Assess the Future of Cloud Infrastructure

Service providers will continue to be affected, influenced by and compete with the large providers of IT infrastructure platforms and cloud services for the next five years. Until the rise of the Cloud Infrastructure and Platform Service Provider (CIPS), the specific service architecture and/or platform was often a differentiator. However, now all CIPS-oriented service providers are starting with similar platforms, offering little room for differentiation. As the COVID-19 pandemic continues to grip the world, the global expansion of large and well-capitalized CIPS providers has recently been fueled by the growth of digital initiatives to support remote operations through SaaS, IaaS, and PaaS. The speed of innovation of large-scale cloud infrastructure and platform services has accelerated digitization in the space, dramatically changing the landscape in a short period of time. Over the next five years, small technology and service providers (TSPs) must evolve by partnering, aligning or innovating with these large providers based on their circumstances and expertise in order to survive.

The future of CIPS providers

Even before the coronavirus pandemic, major CIPS providers like AWS, Alibaba Cloud, Microsoft Azure, IBM Cloud, Google Cloud Platform or Oracle Cloud enabled new trends and directions in various industries with new offerings and regular updates. features / services. With their global reach and aspirations, as well as their strong brand loyalty, these vendors are innovating and differentiating themselves in a crowded marketplace. In 2019, the large CIPS vendors owned more than 90% of the CIPS market. Gartner expects the following assumptions to affect the industry:

• By 2025, 30% of TSPs will sell business results rather than software / services, and 70% of the underlying technology will provide integrated value measurement facilities.
• By 2025, 90% of all software purchasing decisions for all companies will be made outside of the IT organization by non-technical C-level managers and business units.
• By 2025, 95% of software application providers that use cloud platform services as part of their product offerings will also market, sell and deliver their offerings through cloud platform marketplaces.
• By 2025, the top three cloud service providers from the western and eastern ecosystems will account for more than two-thirds of revenue in their respective hemispheres.
• By 2023, more than half of the technology product and service categories will be served by at least one global mega-seller

Important decisions to make

As the large CIPS providers continue to expand their standard cloud infrastructure offerings using emerging and advanced technologies, such as AI, blockchain, and edge/IoT, other providers are finding it more difficult to differentiate their solutions solely on technology. Large CIPS vendors can dominate primarily by their ability to innovate. TSPs must think about the most beneficial strategic directions to keep their business competitive and thriving and take steps to survive, or as the industry continues to consolidate, vendors that don't take these steps risk disappearing.

Growth stages

Non-CIPS oriented vendors must, to some degree, build, operate and maintain their platforms at additional cost and effort, and often at the expense of versatility and innovation. Therefore, it is necessary to assess whether it is feasible to maintain stacks of non-CIPS-oriented technologies in the long term or to take advantage of their services where possible and innovate at the margins. Product managers developing business plans based on emerging technologies and trends should take the following steps:

• Create more value by working with CIPS suppliers, strengthening their specialization and knowledge of the market and moving forward in the value chain.
• Optimize your value proposition and go-to-market plans by planning by scenario for the impact of changes in partner programs and market movements of CIPS providers.
• Implement a strategy to explicitly compete or partner with major CIPS vendors by working with vendors or delving into market expertise and value.

To make a business more competitive, tailor your messaging to your specific area of ​​interest while collecting evidence, such as case studies and customer testimonials, to support your position. By matching their vision with market needs, a TSP can issue thought leadership to support that goal and this, in turn, will build credibility in the space. Product updates, ecosystem partners, and community building can follow, and this model can be replicated in other segments of your business to facilitate broader growth and expansion. Evolving your business model to be more competitive and gain a level of market expertise is not a quick fix. It should be rolled out gradually and rolled out through a mix of business results messaging, thought leadership, product functionality, and work in the broader ecosystem and community. However, the road ahead will not be easy, the big CIPS provider's strategy is working and the recent pandemic has accelerated the success of their strategies. They are here to stay and will continue to be a dominant force. Monitoring the landscape as it becomes clearer and adapting accordingly will be key to success, whether working with, through, or without Microsoft, Amazon, and IBM.

• Jeff Chamberlain, Research Director, Gartner Technology and Service Provider Organization (T&SP).