IBM has launched the beta of BlueMix, its Cloud Foundry-based PaaS. Understanding what BlueMix, and IBM, do and don’t bring to the table means a bit of a digression into how Cloud Foundry works as a PaaS. Since my blog is usually pretty infrastructure-oriented, I’m guessing that a significant percentage of readers won’t know very much about Cloud Foundry (which I’ll abbreviate as CF).
In CF, users write application code, which they deploy onto CF runtime environments (defined by “buildpacks”) — i.e., programming languages and associated frameworks. When CF is deployed as a PaaS, it will normally have some built-in buildpacks, but users can also add additional ones through a mechanism called buildpacks (which originated at Heroku, a PaaS provider that is not CF-based). CF runs applications in its own “Warden” containers (which are OS-independent), staging the runtime and app code into what it calls “droplets”. These application instances are of a size controlled by the user (developer), and the user chooses how many of them there are. Cloud Foundry does not have native auto-scaling currently.
CF can also expose a catalog of services; these services might or might not be built on top of Cloud Foundry. These services are called “Managed Services”, and they support CF’s Service Broker API, allowing CF to provision those services and bind them to applications. Users can also bind their own service instances, supplying credentials for services that exist outside of CF and that aren’t directly integrated via the Service Broker API. Users of CF can also bind external services that don’t support CF explicitly.
IBM has built its own UI for BlueMix. IBM has said at Pulse that it’s got a new focus on design, and BlueMix shows it — the interface is modern and attractive, and its entire look-and-feel and usability are in stark contrast to, say, its previous SmartCloud Application Services offering. Interacting with the UI is pleasant enough. Most users will probably use the CF command-line tool (CLI), though. Apps are normally deployed using the CLI, unless the customer is using JazzHub (a developer service created out of IBM UrbanCode).
For the BlueMix beta, IBM has created two buildpacks of its own, for Liberty (Java) and Node.js, which it says it has hardened and instrumented. They also supply two community buildpacks, for Ruby on Rails and Ruby Sinatra. As with normal CF, users can supply their own buildpacks, and the open-source CF buildpacks appear to work fine, IBM calls these “runtimes” in the BlueMix portal.
IBM also has a bunch of CF services — “Managed Services” in CF parlance. Some of these are IBM-created, like the DataCache (which is WebSphere eXtreme Scale) and Elastic MQ (WebSphere MQ). Others are labeled “community” and are likely open-source CF service implementations of popular packages like MySQL and MongoDB. As is true with all CF services, the implementation of a service is not necessarily on Cloud Foundry — for instance, one of the services is Cloudant, which is entirely external.
Finally, IBM provides what it calls “boilerplates”, which you can click to create an application with a runtime plus a number of additional services that are bound to the app. The most notable is the “mobile backend starter”, which combines Node.js with a number of mobile-oriented services, like a mobile data store and push notifications.
All in all, the BlueMix beta is a showcase for IBM middleware and other IBM software of interest to developers. IBM has essentially had to SaaS-ify (or PaaS-ify, if you prefer that term) its enterprise software assets to achieve this. Obviously, this is only a sliver of its portfolio, but bringing more software assets into BlueMix is clearly key to its strategy — BlueMix is as much a service catalog as a PaaS in this case.
Broadly, though, it’s very clear that IBM is targeting the enterprise developer, especially the enterprise developer who is currently developing in Java on WebSphere technologies. It’s bringing those developers to the cloud — not targeting cloud-native developers, who are more likely to be drawn to something like AppFog if they’re looking for a CF service. Given that IBM says that it will provide strong support for integrating with existing on-premise applications, this is a strategy that makes sense.
Standard CF constraints apply — limited RAM per application instance (and tight resource limitations in general in BlueMix beta), no writes to the local filesystem, and so forth. Other features that would be value-added, like monitoring and automatic caching of static content, are missing at present.
The short-form way to think of BlueMix beta is “Cloud Foundry with some IBM middleware as a service”. It’s hosted in SoftLayer data centers. Presumably at some point IBM will introduce SLAs for at least portions of the service. It’s certainly worth checking out if you’re a WebSphere shop, and if you’re checking out Cloud Foundry in general, this seems to be a perfectly decent way to do it. There’s solid promise here, and my expectation is that at this stage of the game, PaaS might well be a much stronger play for IBM than IaaS, at least in terms of the ability to articulate the overall value of the IBM ecosystem and make an argument for making a strategic bet on IBM in the cloud.
Once upon a time, IBM Pulse was a systems management conference. But this year, IBM has marketed it as a “cloud” conference. The first day of keynotes was largely devoted to IBM’s cloud efforts, although the second day keynote went back to the systems management roots (if still with a cloudy spin). IBM has done a good job of presenting a coherent vision of how it intends to go forward into the world of cloud, which is explicitly a world of changing business demands and an altered relationship between business and IT.
Notably absent amidst all of this has been any mention of IBM’s traditional services business (strategic outsourcing et.al.), but the theme of “IBM as a service” has resonated strongly throughout. IBM possesses a deep portfolio of assets, and exposing those assets as services is key to its strategy. This is going to require radical changes in the way that IBM goes to market, with a much greater emphasis on marketing-driven online sign-up and self-service. (IBM, like other large tech vendors, is largely sales-driven today.)
Some serious brand-building for IBM’s SoftLayer acquisition is being done here, although IBM seems to be trying to redefine everything that SoftLayer does as cloud, although SoftLayer’s business is almost all dedicated hosting (bare metal, sold month-to-month), not cloud IaaS in the usual sense of the word. There’s abundant confusion as a result; the cloudwashing is to IBM’s benefit, though, at least for now.
IBM has an enormous installed base, across its broad portfolio, and for a large percentage of that base, it is a strategic vendor. IBM has to figure out how to get that customer base to buy into its cloud vision, and to make the bet that IBM is the right strategic partner for that cloud journey. IBM looks to be taking a highly neutral stance on the balance of cloud (services) versus internal IT; arguably, much like Microsoft, its strength lies in the ostensible ability to blend on-premises do-it-yourself IT with services in the cloud, extending the lifetime of existing technology stacks.
Much like Microsoft, IBM has an existing legacy of enterprise software — specifically, software built for single-tenant, on-premise, bespoke environments. Such software tends not to scale, and it tends not to be easily retrofitted into a services model. Again like Microsoft, IBM is on a journey towards “cloud first” architecture. IBM’s acquisition of Cloudant isn’t just the acquisition of a nice bit of technology — it’s also the acquisition of the know-how of how to build a service at scale, a crucial bit of engineering expertise that it needs to absorb and teach within IBM, as IBM’s engineers embark on turning its software into services.
Again like Microsoft, IBM has the advantage of an existing developer ecosystem and middleware that’s proven to be sticky for that ecosystem — and consequently IBM has the potential to turn itself into a compelling cloud platform (in the broadest of senses, integrated across the IaaS, PaaS, and SaaS boundaries). Since cloud is in many ways about the empowerment of the line-of-business and developers, this is decidedly helpful for IBM’s future ambitions in the cloud.
So another juggernaut is on the move. Things should get interesting, especially when it comes to platforms, which is arguably where the real war for the cloud will be fought.
As my colleague Daryl Plummer has put it: We’re at the end of the beginning phase of cloud computing.
As 2014 dawns, we’re moving into an era of truly mainstream adoption of cloud IaaS. While many organizations have already been using cloud IaaS for several years, gradually moving from development to production, with an ever-expanding range of use cases and applications, the shift to truly strategic adoption is just getting underway. Increasingly, organizations are asking what can’t go to the cloud, rather than what can.
Organizations that haven’t done at least a cloud IaaS pilot by now, however informal (“informal” includes that one crazy developer who decided to give his credit card to Amazon) are at the trailing edge of adoption. The larger the business, the more likely it is to be doing things in cloud IaaS; this is a trend that starts from enterprises and works its way down. (Technology companies of all sizes, of course, are comfortably ensconced in the cloud.)
Gartner’s clients with multiple years of cloud IaaS under their belts are now comfortably going towards more strategic adoption. What’s interesting, though, is that later adopters are also going towards strategic adoption — they’re skipping the years of early getting-their-feet-wet, and immediately jumping in with more significant projects, with more ambitious goals. That makes a great deal of sense, though — by this point, the market is more mature, and there are immediate and clear answers to practical issues like, “How do I connect my enterprise network?” (That one question, by the way, continues to benefit Amazon, which has a precise answer, versus the often-fuzzy or complex answers of other competitors who have less industrialized processes for doing so.)
I’ve said before that developers are the key to cloud IaaS adoption in most organizations. It’s also becoming clear that the most successful strategic efforts will be developer-led, usually with an enterprise architect as the lead for the organization-wide effort. It is the developers that have the strategic vision for the future of application development and operations, and that care about things like faster delivery (i.e., business agility), continuous integration, continuous deployment, application lifecycle management, and infrastructure as code. IT operations seems to almost inevitably be mired in thinking about solely their own domain, which tends to be focused on a data center view that effectively reduces to “how do we keep the lights on, at a lower cost?” This has a high probability of leading to solutions that might be right for IT operations, but wrong for the business.
At the moment, I’m writing research focused on best practices — the lessons learned from the trenches, from organizations who have adopted cloud IaaS over the last seven years of the market. I’m always interested in hearing your stories.
If you’re a service provider interested in participating in the research process for Gartner’s Magic Quadrant for Cloud IaaS (see the call for vendors), or the regional Magic Quadrants for Cloud-Enabled Managed Hosting (see that call for vendors), you will probably want to read some of my previous blog posts.
The Magic Quadrant Process Itself
AR contacts for a Magic Quadrant should read everything. An explanation of why it’s critical to read every word of every communication received during the MQ process.
The process of a Magic Quadrant. Understanding a little bit about how MQs get put together.
Vendors, Magic Quadrants, and client status. Appropriate use of communications channels during the MQ process.
The art of the customer reference. Tips on how to choose reference customers.
Gartner’s Understanding of the Market
Foundational Gartner research notes on cloud IaaS and managed hosting, 2014. Recommended reading to understand our thinking on the markets.
Having cloud-enabled technology != Having a cloud. Critical for understanding what we do and don’t consider cloud IaaS to be.
Infrastructure resilience, fast VM restart, and Google Compute Engine. An explanation of why infrastructure resilience still matters in the cloud, and what we mean by the term.
No World of Two Clouds. Why we do not believe that there will be a separation of the cloud IaaS offerings that target the enterprise, from those that target cloud-native organizations.
Cloud IaaS market share and the developer-centric world. How developers, rather than IT operations admins, drive spend in the cloud IaaS market.
With the refresh of the Magic Quadrant for Cloud IaaS, and the evolution of the regional Magic Quadrants for Managed Hosting into Magic Quadrants for Cloud-Enabled Managed Hosting, I am following my annual tradition of highlighting researching that myself and others have published that’s important in the context of these MQs. These notes lay out how we see the market, and consequently, the lens that we’re going to be evaluating the service providers through.
As always, I want to stress that service providers do not need to agree with our perspective in order to rate well. We admire those who march to their own particular beat, as long as it results in true differentiation and more importantly, customer wins and happy customers — a different perspective can allow a service provider to serve their particular segments of the market more effectively. However, such providers need to be able to clearly articulate that vision and to back it up with data that supports their world-view.
This updates a previous list of foundational research. Please note that those older notes still remain relevant, and you are encouraged to read them. You might also be interested in a previous research round-up (clients only).
If you are a service provider, these are the research notes that it might be helpful to be familiar with (sorry, links are behind client-only paywall):
Magic Quadrant for Cloud IaaS, 2013. Last year’s Magic Quadrant is full of deep-dive information about the market and the providers. Also check out the Critical Capabilities for Public Cloud IaaS, 2013 for a deeper dive into specific public cloud IaaS offerings (Critical Capabilities is almost solely focused on feature set for particular use cases, whereas a Magic Quadrant positions a vendor in a market as a whole).
Magic Quadrant for Managed Hosting, North America and Magic Quadrant for European Managed Hosting. Last year’s managed hosting Magic Quadrants are likely the last MQs we’ll publish for traditional managed hosting. They still make interesting reading even though these MQs are evolving this year.
Pricing and Buyer’s Guide for Web Hosting and Cloud Infrastructure, 2013. Our market definitions are described here.
Evaluation Criteria for Public Cloud IaaS Providers. Our Technical Professionals research provides extremely detailed criteria for large enterprises that are evaluating providers. While the customer requirements are somewhat different in other segments, like the mid-market, these criteria should give you an extremely strong idea of the kinds of things that we think are important to customers. The cloud IaaS MQ evaluation criteria are not identical (because it is broader than just large-enterprise), but they are very similar — we do coordinate our research.
Technology Overview for Cloud-Enabled System Infrastructure. If you’re wondering what cloud-enabled system infrastructure (CESI) is, this will explain it to you. Cloud-enabled managed hosting is the combination of a CESI with managed services, so it’s important to understand.
Don’t Be Fooled By Offerings Falsely Masquerading as Cloud IaaS. This note was written for our end-user clients, to help them sort out an increasingly “cloudwashed” service provider landscape. It’s very important for understanding what constitutes a cloud service and why the technical and business benefits of “cloud” matter.
Service Providers Must Understand the Real Needs of Prospective Customers of Cloud IaaS. Customers are often confused about what they want to buy when they claim to want “cloud”. This provides structured guidance for figuring this out, and it’s important for understanding service provider value propositions.
How Customers Purchase Cloud IaaS, 2012. A lifecycle exploration of how customers adopt and expand their use of cloud IaaS. Important for understanding our perspective on sales and marketing. (It’s dated 2012, but it’s actually a 2013 note, and still fully current.)
Market Trends: Managed Cloud Infrastructure, 2013. Our view of the evolution of data center outsourcing, managed hosting, and cloud IaaS, and broadly, the “managed cloud”. Critical for understanding the future of cloud-enabled managed hosting.
Managed Services Providers Must Adapt to the Needs of DevOps-Oriented Customers. As DevOps increases in popularity, managed services increasingly want their infrastructure to be managed with a DevOps philosophy. This represents a radical change for service providers. This note explores the customer requirements and market implications.
If you are not a Gartner client, please note that many of these topics have been covered in my blog in the past, if at a higher level (and generally in a mode where I am still working out my thinking, as opposed to a polished research position).
We began the call-for-vendors process for Gartner’s 2014 Magic Quadrant for Cloud Infrastructure as a Service, as well as the regional Magic Quadrants for Cloud-Enabled Managed Hosting, in December. (See Doug Toombs’s call for vendors for the latter.)
The pre-qualification survey, which is intended to gather quantitative metrics and information about each provider’s service, is going out imminently. We sent out contact confirmations on December 26th to all service providers who are currently on our list to receive the survey. If you haven’t received a contact confirmation and you want to receive the survey, please contact Michele Severance (Michele dot Severance at Gartner dot com), who is providing administrative support for this Magic Quadrant. You must be authorized to speak for your company. Please note we cannot work with PR firms for the Magic Quadrant; if you are a PR agency and you think that your client should be participating, you should get in touch with your client and have your client contact Michele.
This year, we are doing an integrated survey process for multiple Magic Quadrants. The cloud IaaS MQ is, in many ways, foundational. Cloud-enabled managed hosting is the delivery of managed services on top of cloud IaaS and, more broadly, cloud-enabled system infrastructure. Consequently, this year’s survey asks about your platforms, your managed services levels, and how those things combine into service offerings. Because the survey is longer, we’re starting the survey process earlier than usual.
The survey is an important part of our data collection efforts on the markets, not just for the Magic Quadrants. We use the survey data to recommend providers throughout the year, particularly since we try to find providers that can exactly fit a client’s needs — including small niche providers. Far from everything fits into the one-size-fits-all mold of the largest providers.
The Cloud IaaS MQ continues to be updated on a 9-month cycle, reflecting the continued fast pace of the market. It will have similar scope to last year, with a very strong emphasis on self-service capabilities.
Please note that receiving a survey does not in any way indicate that we believe that your company is likely to qualify; we simply allow surveys to go to all interested parties (assuming that theyÃ¢re not obviously wrong fits, like software companies without an IaaS offering).
The status for this Magic Quadrant will be periodically updated on its status page.
I’ve been spending the last week revising the combined service-provider survey for our Magic Quadrant for Cloud IaaS, and the new regional Magic Quadrants for Cloud-Enabled Managed Hosting.
With every year of revision, the way I ask questions becomes lengthier and more specific, along with the boldfaced “THESE THINGS DO NOT COUNT” caveats. These caveats almost inevitably come from things vendors have tried to claim count as X, with varying degrees of creativity and determination.
I consider my behavior part of a category I’ll call “shooting squirrels from the roof”. It comes from a story that a friend once told me about a rental agreement on a house. This rental agreement had all the usual stipulations about what tenants aren’t allowed to do, but then it had a list of increasingly specific and weird directives about what the tenant was not allowed to do, culminating in, “Tenant shall not shoot squirrels from the roof.” You just know that each of these clauses came from some previous bad experience that the landlord had with some tenant, which caused them to add these “thou shalt not” behaviors in great specificity to each subsequent lease.
So, I use the phrase “shooting squirrels from the roof” to denote situations in which someone, having been burned by previous bad experiences, tries to be very specific (often in a contract) to avoid being burned in that way again.
When I look at customer contracts for managed hosting and indeed, for services in general, I sometimes see they’ve got “shooting squirrels from the roof” contract clauses, specifying a list of often-bizarre, horrible things that the provider is not allowed to do. Those customers aren’t crazy (well, at least not entirely); they’ve just been burned before. No doubt if you’re in the services business (whether IT or not), you’ve probably had this experience, too.
Google Compute Engine (GCE) — Google’s cloud IaaS offering — is now in general availability, an announcement accompanied by a 10% price drop, new persistent disk (which should now pretty much always be used instead of scratch disk), and expanded OS support (though no Microsoft Windows yet). The announcement also highlights two things I wrote about GCE recently, in posts about its infrastructure resilience features — live migration and fast VM restart.
Amazon Web Services (AWS) remains the king of this space and is unlikely to be dethroned anytime soon, although Microsoft Windows Azure is clearly an up-and-coming competitor due to Microsoft’s deep established relationships with business customers. GCE is more likely to target the cloud-natives that are going to AWS right now — companies doing things that the cloud is uniquely well-suited to serve. But I think the barriers to Google moving into mainstream businesses are more of a matter of go-to-market execution, along with trust, track record, and an enterprise-friendly way of doing business — Google’s competitive issues are unlikely to be technology.
In fact, I think that Google is likely to push the market forward in terms of innovation in a way that Azure will not; AWS and Google will hopefully goad each other into one-upsmanship, creating a virtuous cycle of introducing things that customers discover they love, thus creating user demand that pushes the market forward. Google has a tremendous wealth of technological capabilities in-house that it likely can externalize over time. Most organizations can’t do things the way that Google does them, but Google can certainly start making the attempt to make it easier for other organizations to adopt the Google approach to the world, by exposing their tools in an easily-consumable way.
GCE still lags AWS tremendously in terms of breadth and depth of feature set, of course, but it also has aspects that are immediately more attractive for some workloads. However, it’s now at the point where it’s a viable alternative to AWS for organizations who are looking to do cloud-native applications, whether they’re start-ups or long-established companies. I think the GA of GCE is a demarcation of market eras — we’re now moving into a second phase of this market, and things only get more interesting from here onwards.
On a totally personal note (a rarity for my blog, for better or for worse):
I am the soloist for the Glazunov violin concerto with the Montgomery Philharmonic, on Sunday, December 15th. (7 pm, Gaithersburg Presbyterian Church, in suburban Washington DC. Free concert, no tickets required, kids welcome.)
It’s an enormously rare opportunity to be able to play a concerto with orchestra, and I’m immensely pleased to have been asked to do so. It’s also an incredibly large investment of time to do the preparation for a performance, and thus, it would be lovely to have a larger audience. So, if you’re in the DC area, I invite you to come — it’s an all-Russian program (the other works are Rimsky-Korsakov’s “Russian Easter” Overture, and Tchaikovsky’s Nutcracker suite).
For me, this is a kind of mark of reclaiming my life outside of work. I used to play semi-professionally when I lived in the Bay Area, and a brief hiatus when I moved cross-country turned into a decade-long break, the last few years of which I have pretty much done nothing but work. During 2013, I’ve tried to find a more reasonable balance between working and other things; if you’re a client of mine, you know that I’ve been much stricter about the way I schedule travel, and pushing more things to my colleagues rather than allowing myself to be as heavily over committed.
My personality doesn’t really ever allow me to just veg out, and so the other things that I do, I tend to do pretty intensively, whether it’s the violin, building Lego sets, or cycling through various games (at the moment, I’m trying to dominate my PvP bracket in Marvel Puzzle Quest). So if you’d like to see me do something in a totally different context, please do come and hear the performance!
If you’re an investment banker or a vendor, and you’ve asked me in the last year, “Who should we buy?”, I’ve often pointed at enStratius (bought by Dell), ServiceMesh (bought by CSC last week), and Tier 3.
So now I’m three for three, because CenturyLink just bought Tier 3, continuing its acquisition activity. CenturyLink is a US-based carrier (pushed to prominence when they acquired Qwest in 2011). They got into the hosting business (in a meaningful way) when they bought Savvis in 2011; Savvis has long been a global leader in colocation and managed hosting. (It’s something of a pity that CenturyLink is in the midst of killing the Savvis brand, which has recently gotten a lot of press because of their partnership with VMware for vCHS, and is far better known outside the US than the CenturyLink brand, especially in the cloud and hosting space.)
Savvis has an existing cloud IaaS business and a very large number of offerings that have the “cloud” label, generally under the Symphony brand — I like to say of Savvis that they never seem to have a use case that they don’t think needs another product, rather than having a unified but flexible platform for everything.
The most significant of Savvis’s cloud offerings are Symphony VPDC (recently rebranded to Cloud Data Center), SavvisDirect, and their vCHS franchise. VPDC is a vCloud-Powered public cloud offering (although Savvis has done a more user-friendly portal than vCloud Director provides); Savvis often combines it with managed services in lightweight data center outsourcing deals. (Savvis also has private cloud offerings.) SavvisDirect is an offering developed together with CA, and is intended to be a pay-as-you-go, credit-card-based offering, targeted at small businesses (apparently intended to be competitive with AWS, but whose structure seems to illustrate a failure to grasp the appeal of cloud as opposed to just mass-market VPS).
Savvis is the first franchise partner for vCHS; back at the time of VMworld (September) they were offering indications that over the long term that they thought that vCHS would win and that Savvis only needed to build its own IaaS platform until vCHS could fully meet customer requirements. (But continuing to have their own platform is certainly necessary to hedge their bets.)
Now CenturyLink’s acquisition of Tier 3 seems to indicate that they’re going to more than hedge their bets. Tier 3 is an innovative small IaaS provider (with fingers in the PaaS world through a Cloud Foundry-based PaaS, and they added .NET support to Cloud Foundry as “Iron Foundry”). Their offering is vCloud-Powered public cloud IaaS, but they entirely hide vCloud Director under their own tooling (and it doesn’t seem vCloud-ish from either the front-end or the implementation of the back-end), and they have a pile of interesting additional capabilities built into their platform. They’ve made a hypervisor-neutral push, as well They’ve got a nice blend between capabilities that appeal to the traditional enterprise, and forward-looking capabilities that appeal to a DevOps orientation. Tier 3 has some blue-chip enterprise names as customers, and it has historically scored well on Gartner evaluations, and they’re strongly liked by our enterprise clients who have evaluated them — but people have always worried about their size. (Tier 3 has made it easy to white-label the offering, which has given them more success from its partners, like Peer 1.) The acquisition by CenturyLink neatly solves that size problem.
Indeed, CenturyLink seems to have placed a strong vote of confidence in their IaaS offering, because Tier 3 is being immediately rebranded, and immediately offered as the CenturyLink Cloud. (Current outstanding quotes for Symphony VPDC will likely be requoted, and new VPDC orders are unlikely to be taken.) CenturyLink will offer existing VPDC customers a free migration to the Tier 3 cloud (since it’s vCD-to-vCD, presumably this isn’t difficult, and it represents an upgrade in capabilities for customers). CenturyLink is also immediately discontinuing selling the SavvisDirect offering (although the existing platform will continue to run for the time being); customers will be directed to purchase the Tier 3 cloud instead. (Or, I should say, the CenturyLink Cloud, since the Tier 3 brand is being killed.) CenturyLink is also doing a broad international expansion of data center locations for this cloud.
CenturyLink has been surprisingly forward-thinking to date about the way the cloud converges infrastructure capabilities (including networking) and applications, and how application development and operations changes as a result. (They bought AppFog back in June to get a PaaS offering, too.) Their vision of how these things fit together is, I think, much more interesting than either AT&T or Verizon’s (or for that matter, any other major global carrier). I expect the Tier 3 acquisition to help accelerate their development of capabilities.
Savvis’s managed and professional services combined with the Tier 3 platform should provide them some immediate advantages in the cloud-enabled managed hosting and data center outsourcing markets. It’s more competition for the likes of CSC and IBM in this space, as well as providers like Verizon Terremark and Rackspace. I think the broad scope of the CenturyLink portfolio will mesh nicely not just with existing Tier 3 capabilities, but also capabilities that Tier 3 hasn’t had the resources to be able to develop previously.
Even though I believe that the hyperscale providers are likely to have the dominant market share in cloud IaaS, there’s still a decent market opportunity for everyone else, especially when the service is combined with managed and professional services. But I believe that managed and professional services need to change with the advent of the cloud — they need to become cloud-native and in many cases, DevOps-oriented. (Gartner clients only: see my research note, “Managed Service Providers Must Adapt to the Needs of DevOps-Oriented Customers“.) Tier 3 should be a good push for CenturyLink along this path, particularly since CenturyLink will make Tier 3′s Seattle offices the center of their cloud business, and they’re retaining Jared Wray (Tier 3′s founder) as their cloud CTO.