Dominance of the Big Cloud Providers — The End of Growth for Traditional DC Vendors

The center of gravity for new application development and deployment is shifting from in-house to cloud-first as consumer/mobile needs dominate. This is also starting to influence the expectations

around new internal applications, which require more-flexible, distributed and hybrid IT.

 The SaaS/cloud-first approach to new, high-growth workloads means that growth in infrastructure hardware is generally aligned to webscale architectures. While workloads may not run more efficiently in the cloud, providers ensure that excess capacity is used, in some cases, at lower prices to ensure highest utilization, and, therefore, highest monetary return for the provider. This result is top-level improvement in efficiency, which, as cloud provider dominance increases, has the immediate effect on the DC market of reducing the demand of total amount of compute to total workload.

 Traditional managed service providers (MSPs) and infrastructure providers are failing to deliver compelling alternatives to platform as a service (PaaS) from Amazon, Google, IBM, Microsoft and Baidu. MSPs are relegated to providing basic transport, or, at best, become managed service brokers. Amid this churn, traditional vendors find it increasingly hard to compete. Their growth gradually slows as large cloud providers acquire greater market share. In a very short time, these providers will come to dominate the infrastructure as a service (IaaS) and PaaS markets, and strongly influence the price of DC infrastructure.
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