Cloud IaaS market segmentation
Posted by Lydia Leong on March 13, 2011
Over the past couple of months, I’ve been mulling over a way to structure and segment the cloud infrastructure as a service market. Some of those ideas have appeared on my blog, and have since been refined, heavily peer reviewed, and then trial-ballooned at clients. The result is a new research note, called The Structure of the Cloud Compute IaaS Market. (Sorry, Gartner clients only.)
In brief, I’ve used a two-axis strategy to break the market into eight segments.
The first axis is your general use case. Are you sourcing infrastructure that is focused on a single application (or a group of tightly-related applications, like your e-commerce application)? Or are you sourcing infrastructure for a range of diverse applications, essentially replacing a part or all of your data center? For the former, you are essentially doing a form of hosting. For the latter, you have a whole host of significantly more complex requirements.
The second axis is the level of management services. The first possibility is unmanaged — you’re doing pretty minimal operations, probably because this is a test/dev environment. The second possibility is self-managed — the provider offers the IaaS platform (data center, hardware, and virtualization), but you do the OS layer on up yourself. The third possibility is that the core foundation is service-provider managed — they also handle the OS management, usually with a security emphasis (patch management et.al.). The fourth possibility is that some or all of the rest of the application stack, minus the app itself, is service-provider managed (which usually means DBA support, maintenance of a Java EE or .Net stack of middleware, etc.).
That gets you eight market segments, as follows:
| SCENARIO | Single Application | Multiple Applications |
|---|---|---|
| Unmanaged | Developer-centric cloud hosting | Virtual lab enviroment |
| Self-Managed | Scale-out cloud hosting | Self-managed virtual data center |
| Core Foundation Managed | Simple managed cloud hosting | Turnkey virtual data center |
| Application Stack Managed | Complex managed cloud hosting | Cloud-enabled data center outsourcing |
Each of these segments has very different buyer profiles and requirements. No single service provider serves all of these segments. At best, a service provider might serve a few of these segments well, at the current state of the market. These are all cloud IaaS, but each segment serves a different kind of customer need.
Want more details? Read the research note.
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