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Study: IaaS set to grow

By Max Burkhalter
April 11, 2011
As companies, government agencies and other organizations continue to make far-reaching changes in the ways they organize their IT infrastructure, the market for Infrastructure-as-a-Service, or IaaS, is expected to experience rapid growth, according to a recent study.

The study, conducted by research firm Gartner, estimated that the current value of the IaaS market is approximately $3.7 billion. By 2014, Gartner predicted, this will grow to around $10.5 billion.

Like other forms of cloud computing, such as Software-as-a-Service, IaaS enables organizations to create a greater distance between IT infrastructure and the experience of the end user.

Before the advent of cloud computing, individual users would store data on their own computers, each using his or her own copy of a given software application. IaaS and SaaS enable companies to situate their applications, data and infrastructure in data centers that are then accessed through networks or over the internet.

When deciding how to deploy IaaS, companies have two main choices - "insourcing" to their own IT departments, or outsourcing to a service provider. Depending on which option an organization opts for, the infrastructure they utilize may be located in their own data center or in one belonging to a cloud computing vendor.

Commenting on the study's findings, Gartner research vice president Lydia Leong said, "We are still at the beginning of the adoption cycle for cloud compute IaaS."

According to Leong, "This is a rapidly evolving market that represents the transformation of IT infrastructure over 10 to 20 years; however, the next five years represent a significant revenue opportunity - as well as a critical period for vendors who need to lay their foundations for the future."

According to Gartner, the fact that the IaaS market is still young means many companies are settling for services that are available quickly, rather than investing in the solutions they actually need.

Leong noted that IaaS providers should ensure they take the necessary steps to retain these customers in the long term, by providing comprehensive and effective solutions.

"Startup IaaS pure-plays, Web hosters, carriers and data center outsourcers are all competing in the cloud computing IaaS market," Leong said. "However, many providers have a market viewpoint that is restricted by the particular use cases that they see in their sales pipeline, and this can lead to tunnel vision."

In fact, according to Leong, companies have diverse and evolving needs. There is no "one size fits all" solution and providers need to recognize this to remain relevant, she said.

A growing number of business IT solutions are heavily dependent on data centers. According to a recent TMCnet report, companies can reduce costs and increase efficiency by consolidating and virtualizing their data centers.


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