Analysts: The hype about the public cloud is out of control

Posted by Mike Vizard on Jun 11, 2015 11:49:33 AM

8252033786_cf9b9459bd_zDepending on how you measure the market, Amazon Web Services (AWS) is either 14 times larger in terms of compute capacity than all of its nearest competitors combined, or it is simply the biggest player in a segment of the IT outsourcing market that represents a fraction of a rapidly growing $60 billion industry.

That was the core of a debate among industry analysts during a panel discussion this week at a Marketplace LIVE event sponsored by Telx, a provider of hosting services.

Where application workloads are shifting

While the vast majority of application workloads do run and will continue to run on premise, analysts from Structure ResearchIDCForrester Research, and 451 Research all concurred that there is a definite shift underway toward moving more workloads outside the four walls of the traditional data center.

But all four analysts also agreed that the hype surrounding public cloud computing in general and AWS in particular has spun out of control. In fact, Philbert Shih, managing director for Structure Research, notes there is quite a bit of nuance when it comes to where application workloads are shifting in the age of the cloud. Application workloads, for example, are not all shifting into the public cloud or for that matter moving in any one particular direction, says Shih.

451 Research indicates shift back to private cloud

Similarly, Al Sadowski, research director for 451 Research, notes that his firm’s research has found that 68 percent of the workloads currently running in public clouds will actually shift back to private clouds. A big reason for this is that a massive percentage of the workloads running in public clouds involve application development and testing. Once those workloads are ready for production, the organizations that own them often prefer to deploy them on a private cloud.

IDC sees opportunity for managed services

Melanie Posey, vice president of research for IDC, adds that this trend winds up benefiting traditional providers of managed hosting services capable of providing dedicated private cloud services that are integrated with either cloud services they provide or a third-party public cloud service.

Posey says that one of things driving the growth of managed services in the age of the cloud is that IT organizations find it difficult to manage multiple instances of cloud computing on their own. In fact, Posey says IDC research shows that IT leaders admit to already using three or four cloud service providers—and that’s just the ones they know about. It’s easy for line-of-business units to pay for cloud services using a credit card, and that level of convenience makes it hard for internal IT organizations to know how much shadow IT is being invoked.

Forrester uncovers potential hurdle for MSPs

Sophia Vargas, analyst for serving infrastructure and operations professionals at Forrester, says there’s one potential issue that managed service providers need to keep in mind. The issue is that public cloud service providers such as AWS and Google are getting better at bundling their services to include things like content delivery networks (CDNs) and ad serving.

Overall, the analyst consensus was that public clouds are just another type of platform inside the enterprise. As such, IT service providers should expand the scope of their offerings to include public clouds instead of treating them as competitors. After all, the more distributed workloads become, the more complex they are to manage. And, when all is said and done, it’s that complexity that ends up driving more IT organizations into the arms of their local IT services provider.

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Photo Credit: Jerry Kirkhart on Flickr. Used under CC 2.0 license. 

Topics: IT Services Trends, Cloud Trends

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