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The worldwide infrastructure as a service (IaaS) market grew 37.3% in 2019 to total $44.5 billion, up from $32.4 billion in 2018, according to research released today by Gartner. Amazon continues to lead the IaaS market in 2019, followed by Microsoft, Alibaba, Google and Tencent.
“Cloud underpins the push to digital business, which remains at the top of CIOs’ agendas,” said Sid Nag, research vice president at Gartner. “It enables technologies such as the edge, AI, machine learning and 5G, among others. At the end of the day, each of these technologies require a scalable, elastic and high-capacity infrastructure platform like public cloud IaaS, which is why the market witnessed strong growth.”
In 2019, the top five IaaS providers accounted for 80% of the market, up from 77% in 2018. Three-quarters of all IaaS providers exhibited growth in 2018.
Amazon continued to lead the worldwide IaaS market with an estimated $20 billion of revenue in 2019 and 45% of the total market (see Table 1). Amazon leveraged its No.1 spot in 2018 to build out its capabilities beyond the IaaS layer in the cloud stack and maintain its top position in 2019.
“There will be a continued push of cloud spending as an outcome of the coronavirus pandemic,” said Nag. “When enterprises were compelled to move their applications to the public cloud as a result of the pandemic, they realized the true benefits of public cloud and it is unlikely that they will change course. In the recovery and rebound phase, CIOs are recognizing that they don’t need to bring workloads back on premises, which will further increase cloud spending and drive new applications around cloud-hosted collaboration that incorporate emerging technologies such as virtual reality and immersive video experiences.”
Market oveview from a Gartner report on Infrastructure as a Service. (Source: Gartner)
TeleGeography Maps Cloud Regions and On-Ramps
When it comes to the geography of the cloud, Asia is home to the most cloud data centers (122) with the United States and Canada not too far behind (98), according to telecommunications market research firm TeleGeography, which last week released its Cloud Infrastructure Map. The report found that Asia and North America account for 67% of the world’s cloud data centers, with Europe housing 23% and Latin America just 2%.
“This map shows us that networks have been evolving,” said Principal Analyst Patrick Christian. “As time passes, cloud service providers are building out their networks and we see them offering their own services.”
Cloud network infrastructure is organized around geopolitical regions and zones in proximity to clusters of data centers. Although terminology and architecture vary somewhat between providers. TeleGeography said availability zones typically consist of one or more data centers in a campus, whereas regions are territories (generally, a metro area) that comprise one or multiple zones.
The United States and China are home to the most availability zones with 65 and 55, respectively. Japan, the U.K. and Singapore round out the top five but follow at a distance with between 10 to 20 zones each.
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Enterprises have become increasingly dependent on cloud services and have traditionally connected to them via the internet. For many companies, public internet connections to cloud services are sufficient. But those looking for better performance may interconnect with cloud CSPs through their network service provider or directly with the CSP. These connections complement enterprise private WANs with the promise of secure, high-performance connectivity unexposed to public internet vulnerabilities.
“This map also illustrates what we’ve been saying in our research for years: the cloud is not ubiquitous,” added Christian. “On-ramps to infrastructure as a service (IaaS) providers generally map closely to where those providers have deployed data centers.”
IoT Leaders Focused on Security
A survey of 170 industry leaders in the Internet of Things (IoT) found that an overwhelming majority (85%) believe that security concerns remain a major barrier to IoT adoption. The survey by Omdia for this week’s IoT World virtual event showed that 64% of respondents stated that end-to-end IoT security is their top short-term priority, surpassing edge compute (55%), AI/machine learning (50%) and 5G deployments (28%).
“Enterprises and providers must work together to prioritize and support IoT security requirements,” said Alexandra Rehak, Internet of Things Practice Head at Omdia. “Providers need to make sure IoT security solutions are simple and can be easily understood and integrated. Given how high a priority this is for enterprise end users, providers also need to do more to educate customers as well as providing technology solutions, to help ensure IoT security is not a barrier for adoption.”
When it comes to the medium- to long-term focus for IoT industry leaders, 81% agreed that 5G would “transform” the industry. The top two benefits from 5G deployment are expected to be the ability to manage a massive number of IoT devices (67%) and the ability to achieve ultra-low latency (60%), allowing businesses to be even more agile.
“COVID-19 is expected to impact IoT in 2020,” said Zach Butler, Director, IoT World. “Despite this, Omdia forecasts potential in some segments including connected health, as innovators use IoT technologies to tackle some of the pressing crises of the moment. Long-term, there is little doubt that 5G will change the face of IoT, particularly in the automotive and manufacturing sectors. Right now, however, the focus is on laying the groundwork to take full advantage of it. For enterprises, that means shoring up their security and implementing their AI and edge technologies.”
Data Center Frontier is edited by Rich Miller, the data center industry’s most experienced journalist. For more than 20 years, Rich has profiled the key role played by data centers in the Internet revolution.