Here's Who Made Gartner's 2014 Cloud IaaS Magic Quadrant
Can anyone catch AWS?
What jumps out when you first look at Gartner's 2014 Magic Quadrant for Cloud Infrastructure-as-a-Service vendors is an empty patch in the upper left corner of the chart. None of the 15 cloud providers evaluated this year landed in the quadrant whose occupants Gartner classifies as Challengers: clouds rated well in their ability to execute, but falling short in vision.
Much can be inferred through such a brisk visual analysis. Unyielding price wars, consolidation through acquisitions, and major infrastructure investments are sorting the top players primarily along the divide of those that can execute, and those struggling with the immense challenge of mustering and integrating the substantial hardware and software resources necessary to be a serious cloud player.
Leader: Amazon Web Services
AWS pioneered the public cloud a few years ago and hasn't ceded ground since as the industry's undisputed leader. Amazon achieves this status not only through absolute dominance in market share, but also in its ability and willingness to keep acting as the prime innovator and thought leader in providing automated, on-demand, easily accessible public computing services.
It's a business that's beefing up the gravitas of the company's channel partners, with two MSPs—Datapipe and 2nd Watch—having gotten a shout-out in the Gartner report.
Amazon still enjoys a competitive advantage that comes from being ahead of the market, but it's no longer the only cloud player with global reach and aggressive pricing that's looking to innovate.
AWS
Strengths: AWS has engineered its cloud so that it can run just about any workload, making it popular with small businesses, enterprises running mission-critical applications, and Web developers. Its market share is unrivaled—Gartner noting Amazon sells five times more compute capacity than the other 14 companies in the Quadrant combined.
Amazon also remains responsive to the market, continually introducing new features. And AWS has had more time than its rivals to develop a robust partner ecosystem.
Cautions: The biggest complaint about AWS is that all the fixings cost extra. Amazon doesn't bundle its service like some of its competitors. That deficiency especially antagonizes some users when it comes to service and support, which will appear as additional line items on an AWS invoice.
Visionaries: CenturyLink
Telecom giant CenturyLink made a strong move in the cloud space late last year when it acquired Infrastructure-as-a-Service provider Tier 3. CenturyLink then merged the Tier 3 property into a business unit with another acquisition, Savvis, a Web hosting service it bought in 2011 that also had an IaaS component.
Built on Tier 3's infrastructure and technology, the telecom now offers the CenturyLink Cloud, which it operates at several data centers across the U.S., as well as in Canada, Germany and the U.K.
CenturyLink
Strengths: Gartner commended CenturyLink for "a compelling and distinctive vision of application-fluent infrastructure" resulting from the Tier 3 platform that "combines an excellent, differentiated set of features on a well-engineered platform."
The service is attractive to developers and enterprises alike with which Tier 3 had a good track record.
Cautions: The company fell just out of the Leaders quadrant, partly because it's challenged "to muster the resources and agility" of market-leading competitors.
CenturyLink must build out its cloud platform while figuring out how to consolidate various offerings now under its umbrella thanks to acquisitions. Some of its hodgepodge of cloud products are now being phased out but are still for sale. That can possibly be an area of confusion for customers.
Visionaries: IBM Softlayer
IBM's public cloud comes through its acquisition of SoftLayer in July 2013. After taking over the IaaS provider, IBM terminated its then-existing SmartCloud offering and migrated all customers to the new service. The tech giant operates cloud servers at data centers throughout the U.S., in the Netherlands and in Singapore.
IBM Softlayer
Strengths: IBM "has a strong vision for how the shift to cloud will radically transform its business over time," Gartner notes. IBM holds an extensive portfolio of various public and private cloud products, and the company has developed a strategy to expand into a number of global markets this year, partly by taking advantage of SoftLayer's unique architecture.
Before acquisition, SoftLayer had a strong focus in providing SMBs with self-service features and the many service options it offers remain popular in that market.
Cautions: Softlayer's early focus on the small and midsize market might lead some customers to conclude that it's not enterprise-ready, particularly when it comes to the portal, sales and support. The service's propriety API still lacks widespread third-party tool support.
Leaders: Microsoft Azure
Microsoft launched Azure Infrastructure Services last year, entering the IaaS market after having already established its strong presence as a provider of platform and software cloud services. The software giant is increasingly focusing on delivering its software products over its expanding cloud through a variety of offerings. Microsoft recently launched ExpressRoute as a high-speed, dedicated connection to Azure through telecom or exchange partners.
Azure is available in multiple data centers in the U.S. and in Ireland, the Netherlands, and much of Asia.
Microsoft Azure
Strengths: Microsoft's vision for Azure's various services involves seamless interoperability with on-premise Microsoft applications and devices. Microsoft is unique in its ability to build an ecosystem of its own products, and the company is aggressively pushing that vision into global markets.
While a distant second to AWS in terms of market share, Microsoft is still far ahead of its smaller competitors and has pledged to keep Azure prices competitive with Amazon.
Cautions: With Microsoft's many built-in advantages, it's easy to forget Azure's IaaS offering is still a newcomer to the market. Enterprises, according to Gartner, have found "significant capability gaps" when it comes to networking and security. The offering also is still very Microsoft-centric, and Microsoft has yet to introduce a software licensing marketplace.
Niche Players: Rackspace
The company's course has been a topic of great speculation since it said it was seeking a "strategic partnership" with another firm. In a Securities and Exchange Commission filing, Rackspace said it was struggling to keep up in the cloud price wars. But Rackspace, a founder of OpenStack, has long been a leader in managed hosting, and its acquisition could change the topography of the next Gartner Magic Quadrant.
Rackspace operates multiple U.S. data centers, and has a significant footprint in the U.K., Australia and Hong Kong.
Rackspace
Strengths: Rackspace's market share in managed hosting means a large base of customers to which it can sell cloud services. And the company's Fanatical Support philosophy, part of an overall focus on selling complete solutions, is attractive to customers.
Cautions: The many acquisitions Rackspace has made in recent years have not been well-integrated into a seamless offering, Gartner finds. Those businesses under its umbrella position the company well for multicloud management but don't create a compelling value proposition for using the company's IaaS service.
"Although Rackspace now delivers a solid set of basic features, it has not been able to keep up with the pace of innovation of the market leaders, nor maintain a competitive price," Gartner concludes.
Visionaries: Google
Google has been a cloud provider for a few years now. But it's easy to forget the tech giant only entered the IaaS market recently through its introduction of Compute Engine, which allows users to provision a KVM-powered virtual machine in less than a minute.
Unlike Amazon and Microsoft, Google sits in the bottom half of the Magic Quadrant. The newcomer must make strides in the crucial criteria of "ability to execute" before it will find its way into Gartner's Leaders quadrant with its two great rivals.
Google's data centers are grouped into a Central U.S. region, a European region and an Asia region.
Strengths: Google may be a late entrant, but the company has at its disposal unmatched computing resources and technical expertise. Those advantages will allow Google to advance Compute Engine faster than rival IaaS offerings. Google "is primarily productizing existing capabilities, rather than having to engineer those capabilities from scratch," according to Gartner.
Cautions: While Google is aggressively innovating cloud-native applications, it offers no hybrid cloud strategy. Google must still earn the trust of enterprises, a challenge since it doesn't always accommodate migration of legacy workloads. So far, Compute Engine doesn't have much of a partner program, Gartner notes.
"It is still learning to engage with enterprise and midmarket customers, and needs to expand its sales, solutions engineering and support capabilities," the report says.
Niche Players: HP
HP offers an open-stack powered public cloud, called HP Public Cloud, as one of several cloud-related products and services, including the Helion Managed Virtual Private Cloud. The diversified tech giant operates data centers in the Eastern and Western U.S.
HP
Strengths: Gartner notes HP's "ambitious and comprehensive vision of interoperable public and private cloud infrastructure" that takes advantage of the company's many hardware capabilities, its developed partner ecosystem and large sales force.
Cautions: The company views its public IaaS offering as just a component of an overall cloud strategy, and not a business it aggressively pursues on a stand-alone basis. Gartner notes HP Public Cloud also suffers from a lack of interoperability with the company's other virtual computing services, preventing customers from moving workloads from HP Public Cloud to their private clouds.
Niche Players: GoGrid
The small, independent provider specializes in offering a public cloud computing service to crunch big data sets and run advanced analytics. Gartner ranked the company last in both Magic Quadrant criteria: ability to execute and completeness of vision.
GoGrid operates data centers in the Eastern and Western U.S. and in the Netherlands.
GoGrid
Strengths: GoGrid touts its one-button Deploy system to quickly provision complex deployments. The company has pursued a strategy of developing partnerships with software companies that make data management tools and services, part of GoGrid's "open data services" focus. Vendors can easily license and develop their software to run on the GoGrid cloud thanks to an exchange, broad SLAs, and a multipartner compensation model.
Cautions: Like most specialists, GoGrid is light on offering a broad range of features when compared to its competitors. And since it develops software in-house, it's going to be an ever-greater challenge for the company to continue competing against the resources of much larger research and development teams.
Niche Players: Joyent
This small cloud provider is large with ambition when it comes to innovating and investing in fundamental technologies. Joyent develops its own open-source systems for hosting cloud-native applications at data centers throughout the U.S. and in the Netherlands.
Joyent
Strengths: Joyent is unique and innovative in many ways, including through its use of its own open-source SmartOS, a derivative of OpenSolaris. The provider, whose "infrastructure offerings verge on the platform space," Gartner writes, focuses on cloud-native applications, including mobile applications, and big data applications and analytics.
Cautions: A company developing its own technology and committed to innovating will in the long run have to compete against rivals with greater development resources. Joyent's success will depend on an ecosystem emerging around its platform, one that has not yet matured, Gartner writes.
Visionaries: Verizon Terremark
This cloud offering encompasses the telecom giant's data center, cloud and security businesses. As such, Verizon offers a number of cloud variants and editions. Verizon Terremark has the longest track record in the market, but the differentiators that set it apart from competitors have mostly faded with time.
Verizon Terremark operates data centers across the U.S. and in the Netherlands and Brazil.
Verizon Terremark
Strengths: Last year, the company introduced the beta version of Verizon Cloud, which will allow for a broader range of use cases.
"Although the Verizon Cloud has an innovative architecture, it needs to deliver more than a capable cloud IaaS platform and associated network services in order to realize its cloud ambitions," Gartner writes.
Cautions: Verizon is going up against companies with greater engineering resources, yet has adopted a strategy dependent on developing its own software and tools. That stance means Verizon Cloud will only be successful if it can develop with rapid agility to meet the evolving demands of the market. As Gartner notes, that's "an unusual strategy for a company owned by a telecom carrier."
Niche Players: Virtustream
Another small, independent provider that operates data centers in the Eastern and Western U.S., U.K. and the Netherlands. Virtustream has developed its own cloud platform technology to facilitate production applications, both coming from traditional enterprise workloads and cloud-native applications.
Gartner notes Virtustream may be an attractive target for acquisition.
Virtustream
Strengths: Virtustream uses a single architecture for servers in its own data centers and those operated by its customers, enabling federation across multiple clouds.
The company has expertise with SAP and last year received a direct investment from SAP America.
Cautions: The Virtustream IaaS cloud offers self-service features, but the company is really focused on attracting customers with complex business applications that require the assistance of professionals for implementation, and managed services from then on. That's a good focus area, but also limits the provider's base of customers.
Niche Players: VMware
The software vendor that specializes in virtualization technologies launched the VMware vCloud Hybrid Service late last year. The company's public cloud, available in two variants, is hosted at data centers across the U.S. and in the U.K.
VMware
Strengths: VMware leads the market in virtualization technologies, providing a massive base of existing customers committed to its technology. Its strategy of offering those existing customers its hybrid cloud services sounds like a pretty effective method of gaining market share.
Cautions: As a virtualization software vendor, VMware has tried in the past to use MSPs to get its product to market, but with limited success.
"VMware is now directly competing with this channel, but it faces the same technical challenges, and many of the same business challenges, as those service providers," the report says.
Niche Players: Dimension Data
Dimension Data was primarily a VAR and system integrator until it acquired OpSource in 2011 to take a plunge into the cloud market.
It's got a large global footprint. In addition to both coasts of the U.S., Dimension Data operates data centers in the U.K. Netherlands, Australia, Hong Kong, Japan, Brazil and South Africa.
Dimension Data
Strengths: The Dimension Data IaaS cloud offers a unified architecture across public and private platforms, enabling multicloud federations to emerge. And the company allows a unique reseller model where its channel partners can white-label the cloud product they offer consumers. Dimension Data has also retained OpSource's solid suite of software and platform offerings.
Cautions: Dimension Data has been developing its own software with the goal of speeding up innovation and keeping down its costs.
"Although it has consistently rolled out incremental improvements in a continuous delivery model, it has not been able to keep up with the pace of innovation in the overall market. It is now focusing primarily on deals that include managed services," Gartner finds.
Niche Players: Fujitsu
The Japanese IT manufacturer markets a number of offerings for public and private cloud services at the software, platform and infrastructure levels. It operates data centers on the West Coast of the U.S., as well as in Germany, the U.K., Australia, Japan and Singapore.
Fujitsu
Strengths: Fujitsu's size and reach in the IT services market provides it with a large, global sales force, and more importantly, a massive base of captive customers with workloads that can be migrated into its cloud. The company has had success selling legacy customers its cloud products.
The diversified company's large technology portfolio allows it to develop most of its own hardware and software products to power its varied cloud services.
Cautions: Fujitsu's IaaS capabilities "lag significantly behind those of the market leaders, and the gap is increasing, not narrowing," the Magic Quadrant report reads.
Visionaries: CSC
In last year's Magic Quadrant rankings, CSC was the only cloud vendor sharing the Leaders category with AWS. As such, the company was praised by Gartner for having fully embraced the standardized, automated model for cloud computing. In the latest report, CSC has dropped along the "ability to execute" axis, and is just on the cusp of falling into the category of Niche Players.
CSC
Strengths: The strengths are still there: whole-hearted embrace of the cloud model, making the benefits of that cloud model accessible to enterprises, a focus on integrating IT operations management tools into its IaaS cloud services, and a standardized architecture.
Cautions: Last year, CSC acquired ServiceMesh, a cloud management platform. The company now seems to have slightly changed course, drifting from cloud provider to cloud broker. CSC is offering customers a service to manage multiple clouds that aren't its own, including AWS and Azure.
Gartner concludes that shift might limit the company's willingness down the road to invest in its own IaaS cloud, although the Magic Quadrant report notes, "At present, however, CSC is investing heavily in its cloud business."