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10 Key Takeaways From Gartner's 2018 Magic Quadrant For Cloud IaaS

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Gartner has recently published the Magic Quadrant for public cloud IaaS. The report points us to some interesting insights from the public cloud market. Based on the analyst’s commentary, it is becoming clear that the market consolidation is almost complete.

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When compared to 2017, Gartner made the entry criterion much harder and stringent. The focus has squarely shifted to hyperscale infrastructure providers. This change resulted in dropping more than 14 vendors from the list.

According to Gartner, there are no more visionaries and challengers left in the market. There are only a handful of leaders and niche players driving the cloud momentum.

Here are ten takeaways from this year's Magic Quadrant:

1) It is easy to get started with AWS but complicated to maintain

AWS is an undisputed leader of the public cloud. Its cloud platform is mature, proven and credible becoming a safe choice for enterprises. Customers should be aware of the fact that it is easy to get started with AWS but optimizing it for performance and cost is increasingly getting complex. With more managed service partners (MSPs) joining the AWS partner program, that designation is becoming less of an assurance of MSP quality.

 

2) Microsoft’s bet on open source and hybrid cloud investments appeal to enterprises

Microsoft's strong commitment to cloud services has been rewarded with significant market success, which is making it a viable alternative to AWS. Microsoft’s adoption of Linux and open source technologies combined with its Azure Stack software are attracting enterprise customers to Azure. It is estimated that Microsoft closed 2017 with a revenue run-rate for integrated IaaS and PaaS exceeding $4 billion.  Gartner cautions customers from occasional reliability issues that Azure deployments encounter in some regions.

 

3) Google Cloud Platform makes its debut into the leadership quadrant

Google finally made it to the coveted leadership quadrant. However, it has to close the gap with the top two competitors. Google’s differentiation factor lies in its deep investments in analytics and ML. Many customers who choose Google for strategic adoption have applications that are anchored by BigQuery. According to Gartner, “Google is frequently rigid in contract negotiations, save for its largest customers.”

 

4) Alibaba Cloud is now a global hyperscale IaaS platform

Initially, Alibaba was confined to the China market, which restricted its inclusion in Gartner MQ. With the Singapore and India data centers becoming operational, Alibaba Cloud now qualifies as the global hyperscale cloud provider. Gartner states that the company does not have substantial mindshare with buyers in most markets, as it is still building the required local talent, industry expertise and go-to-market capabilities.

 

5) Applications, database and middleware anchor Oracle Cloud

 Customers prefer Oracle Cloud due to the availability of integrated applications, databases and middleware services. Gartner found that the second generation of Oracle IaaS based on KVM-virtualized VMs and bare-metal servers make it a mainstream offering. However, “Gen 2” cloud is still in an early stage of maturity. The company has reliably met engineering timelines, partly by recruiting technical and product leaders from other hyper-scalers, according to Gartner.

 

6) IBM Cloud must fix its branding and user experience

Gartner’s updated criterion pushed IBM Cloud out of the visionary quadrant to the niche player quadrant. IBM is currently dealing with a major rebranding exercise which is hurting its positioning. It is in the process of phasing out the SoftLayer and Bluemix brands for a new IBM Cloud brand. IBM still has two portals - the IBM Cloud portal for PaaS and the SoftLayer portal for IaaS. Gartner also cautions customers that SoftLayer infrastructure remains SMB-centric and hosting-oriented, and is missing many cloud IaaS capabilities required by midmarket and enterprise customers.

 

7) Eight vendors from 2017 didn't make it to the current MQ report

CenturyLink, Fujitsu, Interoute, Joyent, Rackspace, NTT Communications, Skytap and Virtustream were dropped for not adequately meeting the 2018 inclusion criteria. All these vendors failed to deliver the technical capabilities relevant to Gartner clients which are based on supporting mission-critical, large-scale production workloads, whether enterprise or cloud-native.

 

8) There are no net new additions to the magic quadrant

Apart from the six vendors evenly spread out between the leaders and niche players, Gartner didn’t include new players. While some of the vendors in the niche player quadrant may move into the visionary or leadership tiles, we may not see new players in the Cloud IaaS MQ.

9) 2018 marks the consolidation of the public cloud market

A decade after the launch of public cloud IaaS, the market seems to be completely consolidated. There may not be massive, multi-million-dollar M&A deals in this space. Existing players will compete with each other for market share and mindshare.

 

10) Customers want more from the public cloud

Customers are not adopting public cloud for features such as self-service, pay-by-use, automation and programmability. They are expecting reliability, scale, maintainability and better support. Gartner MQ for Cloud IaaS reflects the changing mindset of customers.

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