Hyperscale and IaaS Ascendant In Public Cloud: Study

The end is near for the johnny come-latelies of public cloud: Hyperscale vendors such as Amazon Web Services (AWS), Microsoft, and Google are poised to dominate the market for the future. This will leave little room for smaller, newer players.
This is one of the key takeaways from Gartner’s recent assessment on the global public cloud market. The research firm expects that it will surpass $186 billion by the end of the year — a 21 percent jump year-over year.
Infrastructure as a Service (IaaS), which is one of the many “as-a service” categories in the public cloud, is expected to see the most growth this year. Gartner projects that the IaaS segment will reach nearly $41 billion by 2018, a 36% increase.
Despite this growth, there are still some nuances in the IaaS segment that could be troubling to both vendors and customers. Gartner predicts that the top 10 cloud providers will account for 70% of the IaaS market by 2021. Hyperscale providers are particularly well-positioned. They can shut out smaller vendors and increase the risk of vendor locking-in, which many businesses consider a growing concern.
Sid Nag, Gartner research director, stated that “the increasing dominance by the hyperscale IaaS suppliers creates both enormous challenges and opportunities for end users” While it can help organizations save money and improve efficiency, IaaS providers could gain unchecked power over customers and the market. Multicloud adoption trends will lead to organizations demanding a simpler way to transfer workloads, data, and applications across cloud providers’ IaaS offerings.
Platform as a Service (PaaS) is the second fastest growing segment. It is expected to grow 26 percent to $15 Billion by the end.
Gartner cited the Database Platform as a Service category (DBPaaS), as a key reason for its growth. Gartner pointed out that hyperscale providers are expanding their offerings to include DBPaaS. This is another advantage to their size relative to smaller competitors.
Software as a Service (SaaS) is expected to grow at a slower rate of 22 percent, but will still be the largest segment in the public clouds. Nag called SaaS “the preferred delivery method” and it is expected to grow to nearly $74 billion by 2018, compared with $60 billion in 2017. According to Gartner, SaaS will make up 45 percent of total software spending by 2021.