Industry analyst firm Gartner predicts that the infrastructure as a service (IaaS) market will grow 38.4% in 2016 to reach $22.4 billion by the end of the year. A new report from the Cloud Security Alliance (download a free copy here) finds that Microsoft is quickly catching up with industry leader Amazon in the race to tap this growing market. Amazon, Google, and Microsoft collectively own 82.0% of the IaaS market today. Even at companies that have a strict “no cloud” philosophy, IT leaders admit that nearly one fifth of their computing workloads will be in the public cloud this year versus their own data centers.
Amazon remains the dominant IaaS provider but Microsoft is closing their gap in market share. IT professionals at 37.1% of companies indicated that Amazon AWS is the primary IaaS platform at their organization. Microsoft Azure is a close second, at 28.4% followed by Google Cloud Platform at 16.5%. Enterprises using public cloud benefit in many ways including greater agility, lower cost of ownership, and faster time to market. IaaS providers, meanwhile, are also benefitting. In April 2016, Amazon reported that AWS is its most profitable division and is growing 64% annually.
IaaS adoption trends
Enterprises are increasingly relying on public cloud infrastructure providers such as Amazon, Microsoft, and Google for their computing resources, rather than managing their own data centers. A plurality of organizations (45.1%) have a “hybrid cloud” philosophy, another 25.1% prefer private cloud, and 21.5% take a predominantly public cloud approach. Just 8.2% of enterprises have a “no cloud” philosophy. Today, 31.2% of an enterprise’s computing resources come from infrastructure as a service (IaaS) providers. IT professionals expect that number to rapidly grow to 41.0% of computing workloads in the next 12 months.
Not surprisingly, companies with a “public cloud” philosophy have more computing in the public cloud. At these companies, nearly one half (47.8%) of computing resides in the public cloud today and IT professionals at these organizations expect a majority of their computing (56.5%) will reside in the public cloud 12 months from now. Even companies with a “no cloud” philosophy estimate that 14.6% of their computing nevertheless resides in the public cloud, and they expect that number will grow to 18.8% in the next 12 months. There is a sizable amount of computing in public cloud IaaS even for organizations that are philosophically opposed to cloud.
There is a clear correlation between company size and IaaS adoption. Companies with fewer employees rely on public IaaS platforms for more of their computing today. Companies with 1-1,000 employees have the largest share of computing workloads in the public cloud (37.1%) versus companies with more than 10,000 employees (22.3%). However, in the next 12 months, companies with more than 10,000 employees are anticipating growing their use of IaaS to 32.9%, which would eclipse companies with 5,000-10,000 employees and would put them roughly on par with companies with just 1,000-5,000 employees. Public IaaS appears to be reaching an inflection point in the enterprise.
Barriers to IaaS projects
Despite the rapid growth of public cloud infrastructure, there are still barriers holding back IaaS adoption. The most common barrier reported by IT professionals is concern about the security of the IaaS platform itself (62.1% of respondents). The next most common roadblock is also security related – 40.5% of respondents indicated that concern about the ability to secure applications deployed on IaaS platforms is a barrier to adoption. The third most common barrier, reported by 37.9% of respondents, is the inability to store data within their country to comply with data privacy laws (e.g. EU General Data Protection Regulation).
Despite concerns, overall confidence in cloud
Despite concerns about security, an overwhelming 61.6% of IT leaders believe that, generally speaking, custom applications they deploy on IaaS platforms are as secure, if not more secure, than applications they deploy in their own datacenter. That may be due in part to the significant investments cloud providers have made in their own security, and in achieving compliance certifications such as ISO 27001 and 27018 to demonstrate their investments. It could also be due to a growing sentiment that cloud companies such as Amazon, Microsoft, and Google can dedicate far more resources to IT security than the average company where IT is not their core business.
Cameron Coles, Director of Product Marketing, Skyhigh Networks
[Cloud Security Alliance Blog]