Building up Cloud IT Infrastructure Services

IDC's April 2016 Worldwide Quarterly Cloud Infrastructure Tracker found that cloud IT infrastructure sales accounted for 32.2% of the total IT infrastructure spend in the fourth quarter of 2015, up from 28.6% a year ago. Organizations are nearly split between private (17.5% growth) and public cloud (14.6% growth) deployments, the IDC research found, as they modernize their computing infrastructure, specific workloads, and performance. In addition, enterprises are still experimenting and evaluating the trade offs of different cloud models. 

With cloud hosting (Infrastructure -as-a-Service), users pay a service provider for a set of dedicated resources, including bandwidth, CPU, RAM and drive space. This model delivers the flexibility, scalability, and high availability of the cloud, but the customer must manage the environment, including making updates and overseeing system maintenance.

The third model is managed services (Platform-as-a-Service), where the customer also pays for either a pre-determined or hand-selected amount of dedicated bandwidth, CPU, RAM, and drive space, but lets the provider handle management of the environment. With this approach, IT hands off responsibility for daily upkeep, updates, maintenance, and operations to its MSP partner, including security and system up time. While the managed services approach frees IT to focus on value-added initiatives, it can also be more expensive than other cloud models because customers pay for “management” services. In addition, providers do not typically offer visibility into exact system configuration, which can limit flexibility and prevent customization to meet the needs of a specific application or workload.

An IDG Research survey found most organizations are leaning toward managed services (63%) or cloud hosting (65%) over the next 12 months. Only 33% of respondents said they were currently using or planning to use shared hosting due its perceived limitations.

Email and other messaging applications, along with data storage and data management, were the top contenders for managed cloud services, cited by 61% and 50% of respondents, respectively. This supports the premise that small and mid-sized businesses (SMBs) prefer to offload as much of their IT infrastructure as possible to outside resources to stretch limited IT capacity. Contracting for third-party cloud services also allows organizations to focus on technology-related initiatives with growth opportunity or cost savings potential.