cloud infrastructure as a service market update

U.S. Cloud Infrastructure as a Service (IaaS) Market Update, 2013

Steady Growth Across all Segments

Roopa HonnachariProgram Manager – Business

Communication ServicesJune 19, 2013

© 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.

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Today’s Presenter

• Industry Expertise includes –

• Evolving Network Services ( MPLS and Carrier Ethernet), Data Center Services and Cloud Computing.

• Specialization in analyzing Cloud implications on communication service provider business – emergence of

“everything as a service” model.

• Functional expertise includes –

• Providing strategic advice to companies on new market entry, new product/service development market share

expansion and partnership development

• Building market revenue forecasts, pricing forecasts, market share analysis and competitive analysis reports

• 11 years of market research, growth consulting, and technical marketing in the Telecom industry.

Roopa Honnachari, Program ManagerFrost & Sullivan

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Agenda

• Defining Cloud IaaS

• Why Should You Care About Cloud IaaS?

• Market Drivers & Restraints

• Market Revenue Evolution

• Competitive Landscape

• Key Takeaways

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Defining Cloud IaaS - What’s Included?

Hosted, scalable data center infrastructure resources, available on-demand, without term or usage commitments, and charged via a pay-per-use model. IaaS comprises “raw” infrastructure, onto which users can build and deploy

applications or workloads.

Cloud Services Market

IaaS

Hosted Private Cloud

Storage as a Service

Computing as a

Service

Public Cloud

PaaS SaaS

Included in sizing

Excluded from sizing

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Why Should you care about the Cloud IaaS market?

MEASUREMENT NAME MEASUREMENT TREND

Market Stage (Nascent, Growth, Mature) Growth —

Market Revenue (2012) $3.02 B ▲

Base Year Market Growth Rate (2011 to 2012) 78.4% ▲

Compound Annual Growth Rate (CAGR), 2012-2016 60.0% —

Customer Price Sensitivity (scale of 1 to 10, Low to High) 8 ▼

Number of Competitors 20+ ▲

Market Concentration (% of base year market controlled by top four

competitors)

85% ▼

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Market Drivers

• Decrease IT infrastructure costs

• Cited by 55 percent of IT decision makers as a key driver for IaaS adoption

• Support for business continuity and disaster recovery plans

• Cited by 35 percent of IT decision makers as a key driver for IaaS adoption

• Improve security and compliance profile

• Cited by 25 percent of IT decision makers as a key driver for IaaS adoption

• Reduce IT staff

• Cited by 35 percent of IT decision makers as a key driver for IaaS adoption

Source: 2012 Frost & Sullivan Cloud End User Survey. N=108

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Market Restraints

• Concerns about application performance and reliability

• Cited by 71 percent of respondents as a top restraint to cloud IaaS adoption

• Unwillingness to recede control

• Cited by 65 percent of respondents as a top restraint to cloud IaaS adoption

• Concerns about security risks

• Cited by 58 percent of respondents as a top restraint to cloud IaaS adoption

• Concerns about regulatory compliance

• Cited by 55 percent of respondents as a top restraint to cloud IaaS adoption

Source: 2012 Frost & Sullivan Cloud End User Survey. N=108

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Market Revenue Trends - $ 3 Billion in 2012 Revenues

Source: Frost & Sullivan

73%

27%

2012 Revenue breakdown by Compute vs. Storage

Compute Storage

88%12%

2012 Revenue breakdown by Public vs Hosted Private IaaS

Public Hosted Private

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Competitive Landscape

Amazon Web Services

Rackspace

Verizon/Terremark

SAVVIS/CenturyLink

Others

Infrastructure as a Service Market: Market Share Analysis (U.S.), 2012

“Others” category includes Microsoft, GoGrid, AT&T, SoftLayer, Windstream, NewServers,

EMC, HP, IBM, Virtustream and several other small providers.

Source: Frost & Sullivan

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Key Takeaways

•IaaS adoption is growing, as enterprises increasingly turn to cloud-based IT model

to reduce their capital expenditure.

•The 2012 initiatives from leading cloud IaaS providers—to launch public cloud

offerings and object-based storage offerings—are a testament to the fact that

market demand for bare-metal IaaS continues to grow.

•As enterprise-class IaaS services evolve, providers will take greater responsibility

for security, compliance, backup and recovery, and application delivery—with the

additional functionality either “baked in” to their services or available as an option.

•The future IT landscape will be a hybrid one, combining multiple cloud and

traditional environments under the management of a single enterprise.

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Questions?

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Detailed TOC

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Competitive Structure?

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For Additional Information

Mireya EspinozaCorporate CommunicationsInformation & Communication Technologies(210) 247-3870Mireya.espinoza@frost.com

Roopashree (Roopa) HonnachariProgram Manager, Business Communication Services - ICT Stratecast | Frost & Sullivanrshree@frost.com www.twitter.com/roopa_shree

Lynda Stadtmueller Program Director | Cloud Computing Stratecast | Frost & Sullivan lynda.stadtmueller@frost.com

Perry Somers,Director of Business Development, Stratecast | Frost & Sullivanpsomers@frost.com P: 360.416.4982