Magic Quadrant for Cloud Infrastructure as a Service

Transcription

1 Magic Quadrant for Cloud Infrastructure as a Service 18 October 2012 ID:G Analyst(s): Lydia Leong, Douglas Toombs, Bob Gill, Gregor Petri, Tiny Haynes VIEW SUMMARY Cloud compute infrastructure as a service (a virtual data center of compute, storage and network resources delivered as a service) is a still-maturing, rapidly evolving market. Each service provider has a unique offering, and the sourcing of these services must be done with care. Market Definition/Description Cloud infrastructure as a service (IaaS) parallels the infrastructure and data center initiatives of IT. Cloud compute IaaS constitutes the largest segment of this market (the broader IaaS market also includes cloud storage and cloud printing). Only cloud compute IaaS is evaluated in this Magic Quadrant; it does not cover cloud storage providers, platform as a service (PaaS) providers, software as a service (SaaS) providers, cloud services brokerages or any other type of cloud service provider, nor should it be considered to be an evaluation of the broad, generalized cloud computing strategies of the vendors. Cloud compute IaaS (hereafter referred to simply as "cloud IaaS" or "IaaS"), in the context of this Magic Quadrant, is defined as a standardized, highly automated offering, where compute resources, complemented by storage and networking capabilities, are owned by a service provider and offered to the customer on demand. The resources are scalable and elastic in nearreal-time, and metered by use. Self-service interfaces are exposed directly to the customer, including a Web-based UI and, optionally, an API. The resources may be single-tenant or multitenant, and hosted by the service provider or on-premises in the customer's data center. This Magic Quadrant primarily evaluates cloud IaaS providers in the context of the fastest-growing use case among Gartner clients: the desire to have a "data center in the cloud," where the customer retains most of the IT operations responsibility. Gartner's clients are mainly enterprises, midmarket businesses and technology companies of all sizes, and the evaluation focuses on typical client requirements. What Cloud IaaS Use Cases Are Covered by This Evaluation? Gartner's market structure for cloud IaaS (defined in "Market Insight: Structuring the Cloud Compute IaaS Market") segments the market by two axes: single application needs versus needs that encompass multiple unrelated workloads; and the level of managed services. Unmanaged solutions do not have formal IT operations management; self-managed solutions require the customer to be responsible for all management at the guest OS layer and above; core foundation managed solutions make the provider responsible for the guest OS and most security functions; application stack managed solutions make the provider responsible for everything through the middleware layer. The eight segments of the full market are: Single application, unmanaged: developer-centric cloud hosting. Single application, self-managed: scale-out cloud hosting. Single application, core foundation managed: simple managed cloud hosting. Single application, application stack managed: complex managed cloud hosting. Multiple unrelated workloads, unmanaged: virtual lab environment. Multiple unrelated workloads, self-managed: self-managed virtual data center (VDC). Multiple unrelated workloads, core foundation managed: turnkey VDC. Multiple unrelated workloads, application stack managed: cloud-enabled data center outsourcing. This Magic Quadrant represents only a portion of the market. The four segments of this market, and their use cases, represented by this Magic Quadrant are: Scale-out cloud hosting. These customers typically have a website or Web application that they seek to run on dynamically scalable infrastructure. E-marketing sites (especially marketing microsites), SaaS enablement (that is, a software company sourcing infrastructure on which it will host its SaaS offering) and Microsoft SharePoint hosting are common use cases. Technology startups may be wholly dependent on scale-out cloud hosting to run their customer-facing infrastructure. These applications often have cloud-native architectures. Virtual lab environment. These customers typically try to provide self-service infrastructure to a group of technical users, such as developers, scientists or engineers, for the purposes of test and development, or scientific computing or other batch computing. (See "Virtual Lab Automation: The Foundation for Private Cloud Infrastructure Service Delivery" for a guide to evaluating test and development environments; it covers both public and private cloud IaaS. See "How Cloud Computing Relates to Grid Computing" for details of batch computing on public cloud IaaS.) EVIDENCE Gartner client inquiries in 2011 and Service provider interviews and product demonstrations in Surveys of more than 60 cloud IaaS providers in Customer references from the service providers in Hands-on trials of service offerings in Public information, such as U.S. Securities and Exchange Commission filings, press releases, vendor websites and community support forum s. EVALUATION CRITERIA DEFINITIONS Ability to Execute Product/Service: Core goods and services offered by the vendor that compete in/serve the defined market. This includes current product/service capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria. Overall Viability (Business Unit, Financial, Strategy, Organization): Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product and will advance the state of the art within the organization's portfolio of products. Sales Execution/Pricing: The vendor's capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel. Market Responsiveness and Track Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness. Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional initiatives, thought leadership, word-of-mouth and sales activities. Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements and so on. Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis. Completeness of Vision Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen and understand buyers' wants and needs, and can shape or enhance those with their added vision. 1/17

2 Self-managed VDC. These customers seek self-provisioned, self-managed and cost-effective infrastructure as an alternative to buying their own equipment, virtualizing it and placing it into co-location or into their own data center. These customers typically begin by running a variety of non-mission-critical business applications within the VDC, but may eventually intend to move as many workloads as possible into the VDC. Turnkey VDC. These customers seek all the capabilities of a self-managed VDC, but want someone else to be responsible for securing that infrastructure and handling routine, nonvalue-added operations. Usually, they want management through the OS level, including OS patch management, and often want managed security services as well. Many of these management functions can be partially, if not fully, automated; at present, they generally require some human intervention by the service provider, but we expect them to become fully automated in the future. These customers do not want to give up control, and they view these functions as things that simply ought to be part of the service they accept people performing these functions as a temporary substitute for automation. These customers typically run a variety of business applications, some or all of which may be mission-critical; they may eventually intend for cloud IaaS, in conjunction with co-location, to replace their existing data center infrastructure entirely. This Magic Quadrant strongly emphasizes self-service and automation in a standardized environment. It is focused on the needs of customers whose primary need is self-service cloud IaaS, although it may be supplemented by a small amount of co-location or dedicated servers. Organizations that need significant customization or managed services for a single application, or which are seeking cloud IaaS as a supplement to a traditional hosting solution ("hybrid hosting"), should see "Magic Quadrant for Managed Hosting" instead. Organizations that do not want to self-service, but that rather want to use underlying cloud-enabled system infrastructure, should consult our Magic Quadrants for data center outsourcing and infrastructure utility services instead (published regionally for North America and Europe). This Magic Quadrant evaluates only solutions that are delivered in an entirely standardized fashion specifically, public cloud IaaS, along with private cloud IaaS that leverages the same or highly similar platform. While the providers in this Magic Quadrant do offer custom private cloud IaaS, we have not considered these offerings in our evaluations. Organizations that are looking for custom-built, custom-managed private clouds should use our Magic Quadrants for data center outsourcing and infrastructure utility services instead (see above). Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements. Sales Strategy: The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service, and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base. Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements. Business Model: The soundness and logic of the vendor's underlying business proposition. Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets. Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-em ptive purposes. Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market. Understanding the Vendor Profiles, and IaaS providers that target enterprise and midmarket customers generally offer a high-quality service, with excellent availability, good performance, high security and good customer support. Exceptions to this will be noted in this Magic Quadrant's evaluations of individual providers. Keep the following in mind when reading the vendor profiles: Most of the evaluated providers are oriented toward the needs of traditional IT operations, with an emphasis on control, governance and security, and the ability to run both new applications and legacy workloads. The providers that are oriented toward the needs of developers are noted as such; these providers typically emphasize easy access to infrastructure for individuals who are building new applications. Most of the providers evaluated have a "reliable cloud," achieved through redundant infrastructure in conjunction with virtual machine (VM) clustering; they are thus able to offer a very high SLA for infrastructure availability often as high as % (sometimes expressed as a 100% SLA with a 10-minute exclusion). Offerings without VM clustering or an equivalent technology that provides higher levels of infrastructure availability than can be expected from a single physical server are referred to as "best-effort cloud." In general, monthly availability SLAs of 99.95% and higher are the norm, and are typically higher than availability SLAs for managed hosting. Service credits for outages in a given month typically cap at 100% of the monthly bill. This availability percentage is typically non-negotiable, as it is based on an engineering estimate of the underlying infrastructure reliability. Very few of the providers in this Magic Quadrant have an SLA for compute or storage performance. However, most of the providers do not oversubscribe compute or RAM resources; providers that do not guarantee resource allocations are noted explicitly. Storage performance varies considerably between providers. Many providers have additional SLAs, covering network availability and performance, customer service responsiveness and other service aspects. Infrastructure resources are not normally automatically replicated into multiple data centers unless otherwise noted; customers are responsible for their own business continuity. Some providers offer optional disaster recovery solutions. Most of the providers offer either a shared resource pool (SRP) pricing model or are flexible on how they price the service. In the SRP model, customers contract for a certain amount of capacity (in terms of CPU and RAM), but can allocate that capacity to VMs in an arbitrary way, including being able to oversubscribe that capacity voluntarily; additional capacity can usually be purchased on demand by the hour. Providers that are paid by the VM, rather than on an SRP model, are noted as such. All the providers offer per-hour metering. Most of the providers allow customers to choose arbitrary-size VMs any combination of vcpus, RAM and VM storage, subject to some limits. Providers that do not allow this are explicitly noted as offering fixed-size VMs. Most of the providers are able to offer an option for single-tenant VMs within a public cloud IaaS offering, on a fully dynamic basis, where a customer can choose to place a VM on a host that is temporarily physically dedicated to just that customer. These VMs are typically more expensive than VMs on shared hosts. Providers that do not have this option are noted as such. Some of the providers are able to offer "bare metal" physical servers on a dynamic basis. Due to the longer provisioning times involved for physical equipment (two hours is common), the minimum billing increment for such servers is usually daily, rather than hourly. All the providers offer an option for co-location, unless otherwise noted. Many customers have needs that require a small amount of supplemental co-location in conjunction with their cloud most frequently for a large-scale database, but sometimes for specialized network equipment, software that cannot be licensed on virtualized servers, or legacy equipment. 2/17

3 Co-location is specifically mentioned only when a service provider actively sells co-location as a stand-alone service; a significant number of midmarket customers plan to move into colocation and then gradually migrate into that provider's IaaS offering. Most of the providers offer optional managed services on IaaS. However, not all offer the same type of managed services on IaaS as they do in their broader managed hosting or data center outsourcing services. Some may have managed services provider (MSP) or system integrator (SI) partners that provide managed and professional services. All of the providers have a public cloud IaaS offering. Many also have a "cookie cutter" private cloud offering, where every customer is on standardized infrastructure and cloud management tools, although this might or might not resemble the provider's public cloud service in either architecture or quality. A single architecture, feature set and cross-cloud management, for both public and private cloud IaaS, make it easier for customers to combine and migrate across service models as their needs dictate, and allows the provider to leverage its engineering investments more effectively. All of the providers also offer custom private clouds unless otherwise noted. All the providers offer an option for private network connectivity (usually in the form of Multiprotocol Label Switching [MPLS] or Ethernet purchased from the customer's choice of carrier), unless otherwise noted. Most of the providers support the use of Internet-based IPsec VPN. All the providers allow customers to have VMs with only private Internet Protocol (IP) addresses (no public Internet connectivity), and also allow customers to use their own IP address ranges, unless otherwise noted. Some providers may enforce secure access to management consoles, restricting access to VPNs or private connectivity. All the providers evaluated claim to have high security standards. The extent of the security controls provided to customers varies significantly, though. Most providers offer a firewall (intrusion detection system/intrusion prevention system) as part of their offering, although a few offer only access control lists (ACLs) and a few offer no self-service network security at all. Most providers offer additional security services. All of the providers evaluated can offer solutions that will meet common regulatory compliance needs, unless otherwise noted. All the providers allow customers to bring their own VM images, unless otherwise noted. This allows a customer to create snapshots of existing VMs within their own internal data center, and then directly import them into the provider's cloud, rather than having to start from the provider's own VM image library. This also allows the import of VM appliances and other prepackaged VM images from independent software vendors (ISVs). Very few of the providers offer availability and performance monitoring, visible in their customer portal, as part of their self-service IaaS offering. Some providers may offer monitoring as an option, and many will include it with a hybrid hosting or other managed services offering. All the providers evaluated offer a portal and self-service mechanism that is designed for multiple users and that offers hierarchical administration and role-based access control (RBAC). However, the degree of RBAC granularity varies greatly. We strongly recommend that customers that need these features, but want to use a provider that doesn't have strong support for them, evaluate a third-party management tool, such as RightScale or enstratus. We consider enterprise-class support to require 24/7 customer service, via phone and , along with an account manager. Most providers include this with their offering. Some offer a lower level support by default, but allow customers to pay extra for enterprise-class support. All the providers evaluated will sign contracts with customers and can invoice; while some may also offer online sign-up and credit card billing, they recognize that enterprise buyers prefer contracts and invoices. Some will sign "zero dollar" contracts that do not commit a customer to a certain volume. All the providers evaluated are believed to be financially stable, with business plans that are adequately funded. Customers should not need to worry about them going out of business. However, many of the smaller providers are likely to be potential acquisition targets; an acquisition can cause significant changes in the strategy and direction of a business, and may result in a service transition period if the merged companies consolidate their platforms. Many of the providers have white-label or reseller programs, and some may be willing to license their software. We mention software licensing only when it is a significant portion of the provider's business; other service providers, not enterprises, are usually the licensees. We do not mention channel programs; potential partners should simply assume that all these companies are open to discussing a relationship. (See "Infrastructure as a Service in the Cloud Services Value Chain" for details.) Format of the Provider Descriptions When describing the providers, we briefly summarize the nature of the company, where the data centers that host their cloud IaaS offerings are located, and their range of service offerings. We specifically note other cloud-related services, such as cloud storage, as well as the availability of managed services, even though those service offerings are not specifically evaluated in the context of this Magic Quadrant, because they are capabilities frequently requested by customers in conjunction with cloud IaaS. (See "Market Insight: Customers Need Hybrid Cloud Compute Infrastructure as a Service" for details.) We also state the basis of every provider's virtualization technology and, if relevant, their cloud management platform (CMP). For many customers, the underlying hypervisor will matter, particularly for customers that intend to run commercial software on IaaS. Many ISVs support only VMware virtualization, and those vendors that support Xen may support only Citrix XenServer, not open-source Xen (which is often customized by IaaS providers and is likely to be different from the current open-source version). Services that use VMware's virtualization technologies are labeled as follows: vcloud Datacenter Service. This service has been certified to meet VMware's globally consistent service definitions, security and regulatory compliance requirements, and requirements for availability and high performance. It is based on a prescriptive architecture intended to maximize portability between providers of vcloud Datacenter Service and a business's own VMware-virtualized data center infrastructure. Only eight providers 3/17

4 worldwide have such a service and several of them do not yet have a significant customer base on this platform. These providers also meet the requirements for being vcloud Powered. vcloud Powered. These providers are part of VMware's service provider partner program. The service is based on VMware's vsphere and vcloud Director (vcd), exposes the vcloud API, and supports the Open Virtualization Format (OVF) for image upload and download. Unless otherwise stated, these providers expose the vcd UI to customers. Because the vcd features exposed can be customized by the service provider, and the service provider typically needs to provide an array of features not included in vcd (such as monitoring), there is still significant differentiation between vcloud Powered providers. In a vcloud Powered offering with the vcd UI exposed, vcd is used to drive self-service management and provide a service catalog. vcd is a key part of VMware's strategy for driving adoption of hybrid internal-external cloud IaaS, and facilitates interoperability between VMwarevirtualized infrastructures, regardless of whether they are internal to a business or offered by a service provider. vcd provides the capability to manage very complex infrastructure needs, but also requires a greater investment in training and setup time from an IT administrator in order to facilitate easier self-service for users. vcloud Express. vcloud Express is a VMware-defined offering targeted at developers and small businesses, with online sign-up, credit card payment, self-service and by-the-hour service. VMware-virtualized. This service uses VMware's hypervisor, but is not a vcloud Datacenter, vcloud Powered or vcloud Express service. Many such offerings are high-quality services from early, market-leading innovators; these providers typically entered the market before vcd became available and have elected to continue to develop their own technology. Recommended Uses For each vendor, we also provide a recommendation for use. The most typical recommended uses are: Cloud-native applications. These are applications that are specifically architected to run in a cloud IaaS environment, using cloud transaction processing (TP) principles. E-business hosting. These are e-marketing sites, e-commerce sites, SaaS applications, and similar modern websites and Web-based applications. They are usually Internet facing. They are designed to scale out and are resilient to infrastructure failure, but they might not use cloud TP principles. General business applications. These are the kinds of general-purpose workloads typically found in the internal data centers of most traditional businesses; the application users are usually located within the business. Many such workloads are small, and they are often not designed to scale out. They are usually architected with the assumption that the underlying infrastructure is reliable, but they are not necessarily mission-critical. Examples include intranet sites, collaboration applications such as Microsoft SharePoint, and many business process applications. Enterprise applications. These are general-purpose workloads that are mission-critical, and may be complex, performance-sensitive or contain highly sensitive data; they are typical of a modest percentage of the workloads found in the internal data centers of most traditional businesses. They are usually not designed to scale out, and the workloads may demand large VM sizes. They are architected with the assumption that the underlying infrastructure is reliable and high-performance. Test and development. These workloads are related to the development and testing of applications. They are assumed not to require high availability or high performance. Batch computing. These workloads include high-performance computing (HPC), "big data" analytics and other workloads that require large amounts of capacity on demand. They do not require high availability, but may require high performance. In the case of all vendors, the recommended use is specific to the four market segments evaluated within this Magic Quadrant scale-out cloud hosting, virtual lab environment, selfmanaged VDC and turnkey VDC. This means that even if a provider excels in one aspect of a nonevaluated segment, such as complex managed cloud hosting, this will not be mentioned as a recommended use. We may mention hybrid hosting as a recommended use, however, as customers may blend solutions (for instance, an entirely self-managed front-end Web tier on public cloud IaaS, but managed hosting for the application servers and database), even though hybrid hosting is often primarily a complex managed cloud hosting use case. Magic Quadrant Figure 1. Magic Quadrant for Cloud Infrastructure as a Service 4/17

5 Source: Gartner (October 2012) Vendor and Amazon Web Services Amazon Web Services (AWS) is a cloud-focused service provider with a very pure vision of highly automated, cost-effective IT capabilities, bought without any need to commit to a contract. Its Elastic Compute Cloud (EC2) is a fixed-size, paid-by-the-vm, Xen-virtualized, public cloud IaaS. It has groups of data centers, which it calls "regions," in the U.S., Brazil, Ireland, Japan and Singapore, along with one region that is dedicated to the U.S. federal government. It also offers object-based storage with an integrated content delivery network (CDN), Hadoop as a service, database as a service, and a number of PaaS-like services. It does not have any private cloud offerings. It does not offer co-location, but customers can cross-connect in the data centers of select partners (notably Equinix). AWS is the market share leader, and a thought leader; it is extraordinarily innovative, exceptionally agile and very responsive to the market. It has the richest IaaS product portfolio, and is constantly expanding its service offerings and reducing its prices. AWS has by far the largest pool of capacity, which makes it one of the few infrastructures suitable for batch computing, especially those workloads that require short-term provisioning of hundreds of servers at a time. AWS also offers specialized infrastructure options for highperformance computing and big data applications, along with a "spot pricing" market for compute capacity. AWS has a very large technology partner ecosystem. Many software vendors have specially licensed and packaged their software to run on EC2, either independently or via the AWS Marketplace, easing deployment and eliminating some of the challenges associated with licensing software to run in the cloud. Its API is supported by many third parties that provide associate management tools, and many open-source and commercial CMPs are compatible with its API. AWS has been aggressively expanding its targeting of enterprises. It has been doing so by both broadening its technical capabilities and increasing its go-to-market partnerships with system integrators. It has obtained many security and compliance-related certifications and audits. Customers may be able to access these audits under a nondisclosure agreement, but cannot conduct their own independent audits. AWS has multiple "availability zones" (AZs) within its regions. These AZs are effectively multiple data centers in close proximity to one another. Its services are designed to make it easier to run applications across multiple AZs; customers are responsible for architecting their applications for high availability. However, new capabilities are rolled out region-byregion, so not all regions have identical capabilities. Recommended uses: Cloud-native applications, batch computing, e-business hosting, general business applications, and test and development. AWS is a best-effort cloud. Its weak, narrowly defined SLA requires that the customer runs workloads in at least two AZs within a region; a violation requires that connectivity to both AZs be unavailable. The SLA does not include Elastic Block Store (known as EBS), which most customers use for persistent storage. However, unlike most other providers, AWS does not have any SLA exclusions for maintenance windows, and it offers continuous availability on its 5/17

6 portal and API. AWS is a price leader, but it charges separately for optional items that are often bundled with competitive offerings, including enterprise-grade support. Prospective customers should be careful to model the costs accurately, especially network-related charges, to normalize comparative costs based on actual compute performance, and to compare the costs of reserved and unreserved capacity. AWS does not offer any managed services, although they are available through MSP partners (such as Datapipe) and SIs (such as Capgemini, Wipro and Cognizant). As it expands its service portfolio, it is adding offerings that automate some aspects of infrastructure management, such as its Relational Database Service. AWS has a field sales and solutions engineering organization, but it does not consistently satisfy prospects that need consultative sales. For better terms and conditions, customers should sign an Enterprise Agreement, which is typically a zero-dollar contract. Invoicing is available on request, but AWS's billing reports are difficult to understand and audit. Bluelock Bluelock is a small, independent cloud-iaas-focused provider that targets the midmarket and enterprise markets. It offers a vcloud Datacenter Service for both public and private cloud IaaS, with optional managed services. Its data centers are located in the U.S. Bluelock has a track record of successfully serving production use cases, including complex and mission-critical needs. It is one of VMware's closest service provider partners, and is usually one of the first service providers to implement new VMware products and version upgrades. Bluelock has strong multicloud capabilities. In addition to supporting vcloud Connector, it also supports vcloud Global Connect, which allows federation between participating vcloud Datacenter Service providers. Bluelock offers two tiers of service, a "5-series" aimed at production workloads, and a "2- series" aimed at development workloads; the latter uses oversubscription and has a lower SLA. Bluelock has a tool in its portal called Portfolio, which provides monitoring and is focused on IT financial management of IaaS resources, helping customers to understand where they are spending money and how they can optimize their resource usage. Recommended uses: E-business hosting, general business applications, enterprise applications, and test and development. Bluelock is a small provider and, while it is financially stable, its size and excellence of service make it a prime target for acquisition. Bluelock is trying to compete with much larger vendors, but its more limited engineering resources mean that it has little margin for error in execution if it wants to keep up its pace of innovation. Bluelock has concentrated on quickly delivering VMware's technologies and services and its road map continues this pattern. It is highly dependent on VMware's release cycles and technological innovation. Bluelock's data centers are in Indianapolis, Indiana, and Salt Lake City, Utah, which are not major network hub cities. This impacts Internet performance, and does not offer the breadth and depth of connectivity options available at major carrier-neutral exchange points. CSC CSC is a large, traditional IT outsourcer with a broad range of data center outsourcing capabilities. It offers a vcloud Datacenter Service, a VCE Vblock-based cloud IaaS architecture in three variants public multitenant in a CSC data center (CloudCompute), and private singletenant in a CSC data center or in the customer's own data center (BizCloud) and optional managed services. It offers both paid-by-the-vm and SRP pricing. API access is only offered in BizCloud. CSC has multiple cloud data centers in the U.S., as well as in Australia, Canada, Germany, Luxembourg, Singapore, Switzerland and the U.K. CSC is one of the few providers to have a standardized architecture across both public and private cloud offerings, as well as a single rate card across all of these offerings while the pricing is the same, the minimum commitments vary. Contrary to most other traditional data center outsourcers, CSC has fully embraced the highly standardized, highly automated cloud model, successfully blending the benefits of a true cloud service into an enterprise-ready offering. It has a strong road map focused on bringing enterprise-class IT operations management tools, including automated managed services, to cloud IaaS. It is also building infrastructure utility services for specific applications on top of the platform. CSC has developed a portfolio of cloud-related professional services, including Smart Start, a proof-of-concept program intended to help a customer achieve a "quick win" in moving an application onto IaaS, and then methodically migrating other workloads over time. In general, it is generous about offering trials to prospective customers. Recommended uses: General business applications, test and development, cloud-enabled data center transformation, and transition. Cloud computing is driving a radical reinvention of the way that CSC delivers services, 6/17

7 including significantly broadening the range of companies that CSC targets with its offerings. The cloud division is run as its own business unit, which gives it greater agility but also sometimes brings it into conflict with its slower-moving and more conservative parent company. CSC's drive and innovation in this market might be diluted by interference from other parts of the company, and it can be impacted by the challenges facing CSC as an overall corporation. While CSC's road map is ambitious, and it has done an excellent job of quickly delivering a successful competitive cloud IaaS offering, it is only just beginning to launch its offerings for automated IT operations management. CloudCompute is a best-effort cloud, without VM HA. Capabilities are introduced into BizCloud first, before being later rolled out into CloudCompute, so CloudCompute offers a subset of the BizCloud features. Dell Dell is a large diversified technology company. It offers a vcloud Datacenter Service for public cloud IaaS in both pay-by-the-vm and SRP pricing models, as well as a VMware-virtualized "Dedicated Cloud" solution with single-tenant compute, from data centers in the U.S. and the U.K. Dell has a realistic, logical strategy of building integration between its hardware platforms and its cloud offerings over time. These are planned integrations, however, and Dell has yet to establish a track record in this regard. Since Dell has a hardware business, it potentially has a lower cost base for some hardware components that power its cloud services. Dell has a very large sales force, with global reach, along with well-established channels. It has been very successful at signing up customers for its platform, although it must still prove that it can retain and grow those customers beyond their initial pilot deployment. Recommended uses: Test and development and pilot projects for existing Dell hardware customers. Dell is a very recent entrant to the market, and it has not yet established a track record. Its public cloud IaaS offering contains a minimal feature set, and it is missing traits that are critical to enterprise customers, such as the ability to meet compliance requirements and the ability to use customer-provided IP addresses. It oversubscribes its infrastructure. Its road map for service enhancements is weak. Dell does not seem to have settled on a cloud IaaS platform strategy. Its current approach divides the needs of typical existing business workloads from the needs of new applications, with different architectures, CMPs and offerings for each, rather than moving toward the single integrated offering that enterprises desire. Dell entered the data center outsourcing business via its acquisition of Perot Systems, and its broader cloud strategy cuts across the company. However, self-service cloud offerings are primarily being driven out of Dell proper, which has less experience with recurring-revenue services. Dell's cloud support organization and related back-office systems are nascent. Dimension Data Dimension Data is a large system integrator and value-added reseller. It entered the cloud IaaS market through the 2011 acquisition of OpSource. It offers VMware-virtualized paid-by-the-vm public cloud IaaS, as well as SRP-priced private cloud IaaS, with optional managed services, from data centers in the U.S., Australia, the Netherlands and South Africa. It does not have a singletenant VM option in its public cloud. It does not offer any co-location, but it does have crossconnect options for customers who want to connect to a co-location provider. Dimension Data's offering is designed to compete against best-effort cloud IaaS offerings, with very aggressive prices. However, it is a reliable cloud, and has excellent SLAs, including 100% availability. In addition to its own API, it offers AWS API compatibility. Dimension Data's Managed Cloud Platform (MCP) is a single unified architecture across its public and private cloud offerings one of the few providers to provide such an architecture. The MCP is also offered via resale and white-label. Dimension Data can enable federation across MCP clouds. Dimension Data has launched Cloud Software, a set of partnerships with ISVs. It offers Dimension Data-tested and -licensed software from those ISVs, on demand. Depending on the software, the price may be hourly or monthly. OpSource had a long history as a SaaS hoster, and Dimension Data has retained these capabilities. Its rich suite of offerings for that market includes not only infrastructure, but also an on-demand billing platform, custom application management and help desk support. Recommended uses: E-business hosting, cloud-native applications, general business applications, and test and development. Dimension Data is still integrating OpSource into its overall portfolio. Although this integration is mostly complete, and we do not foresee any business disruptions as a result, there are still business risks, particularly as Dimension Data phases out the OpSource brand. At the moment, the OpSource and Dimension Data brands are used inconsistently throughout the customer experience. While Dimension Data's offering is VMware-virtualized, it is not vcloud Powered. Instead, Dimension Data is doing extensive software development of its own, allowing it to drive a faster pace of innovation and better control it costs. Although it is able to invest in the 7/17

8 necessary engineering resources, this also represents a new way of doing business for Dimension Data, which has historically been an integrator of technology, not a developer of technology. Dimension Data is owned by NTT Group. While NTT has deliberately chosen Dimension Data to be its most agile business, with minimal interference from the parent, Dimension Data's future ability to move quickly is likely to depend on continued non-interference. Fujitsu Fujitsu is a large diversified technology company. It has many cloud platforms, including Fujitsu Global Cloud Platform (FGCP), multiple local cloud platforms (FLCPs) based on a reference architecture, and multiple private cloud offerings. FGCP is a paid-by-the-vm, Xen-virtualized, public cloud IaaS, offered in data centers in Japan, Australia, Germany, Singapore, the U.K. and the U.S. Individual FLCP regions have different capabilities. Managed services are optional. Although Fujitsu has received vcloud Datacenter Service Provider partner status, it has not yet launched this offering. Fujitsu has a long history in IT services and data center outsourcing. It has a large global sales force, is the leader in IT outsourcing in Asia/Pacific and has a strong European presence. This gives it a large existing base of captive customers into which it can sell cloud services, and it is successful at extending existing Fujitsu relationships into cloud deals. It has very responsive support, and good account management. Fujitsu is a global vendor of hardware and software, and consequently could have a lower cost base for many hardware components, when compared to most other cloud providers. Fujitsu's strategy of allowing its regions to pursue their own cloud strategies has enabled certain regions, such as Australia, to develop offerings tailored to the needs of the local market, at a faster pace than Fujitsu has been able to do so as a global entity. Fujitsu rolls out FGCP features first in Japan, then extends them to its other regions. Furthermore, Fujitsu in Japan offers additional cloud capabilities Japan-based organizations or projects targeted at the Japanese market should investigate what capabilities are specifically available in Japan, such as object-based storage, database as a service, and Hadoop as a service. Recommended uses: General business applications, and test and development. The FGCP is missing some features that are important to customers, such as the ability to have single-tenant VMs, virtual console access to VMs and the option to bring your own VM images. Users are likely to find its portal UI to be non-intuitive, and its provisioning times are lengthy compared to other providers. It cannot meet common compliance requirements. Fujitsu's strategy of allowing regional control means that development efforts are fragmented across the globe. As such, service offerings may differ in each region, making it difficult for Fujitsu to fully leverage engineering resources and to achieve economies of scale, although Fujitsu has recently strengthened its global cloud strategy and management. Fujitsu is developing much of its own technology, and thus will be challenged to maintain a competitive level of engineering investment and pace of development. We believe that its global strategy is primarily focused on leveraging its cloud IaaS platforms to win managed services business, although it is also pursuing the self-service business. GoGrid GoGrid is a small, independent cloud-iaas-focused provider. It offers fixed-size, paid-by-the-vm, Xen-virtualized IaaS as both public cloud and private cloud, with optional managed services, in data centers in the U.S. and the Netherlands. GoGrid is among the top five public cloud IaaS providers by VM count. Although it has a competitively priced, best-effort, developer-centric IaaS offering, it has excellent SLAs that include 100% availability. It is one of the few providers that has a standard architecture across its public and private cloud offerings. The GoGrid Exchange allows software vendors to license and package their software to run on GoGrid, easing deployment and eliminating some of the headaches associated with licensing software to run in the cloud. It has a unique multipartner compensation model, allowing partners to build on top of each other's software stacks. Recommended uses: Cloud-native applications, e-business hosting, and test and development for individuals or small teams. GoGrid's software is developed entirely in-house. This allows it to innovate quickly and to drive down its costs, but also provides significant long-term challenges in competing against providers that can devote significant resources to R&D. GoGrid's offering lacks some features that are important to enterprise users, such as granular RBAC, single-tenant VMs within the public cloud, the ability to use customerprovided IP addresses, and the option to bring your own VM images. GoGrid has its own API, which is supported by a limited number of third-party tools. GoGrid is pursuing a strategy of broader interoperability, and its future success will be dependent on ensuring that it can partake in one or more of the emerging platform ecosystems. 8/17

9 Joyent Joyent is a small, independent service provider that is solely focused on cloud services. It offers fixed-size, paid-by-the-vm public and private cloud IaaS, using KVM. Its data centers are located in the U.S. and the Netherlands. Joyent places strong emphasis on application performance and it takes a holistic approach to its delivery, including integrating network-based acceleration. It has particularly deep portalbased performance analytics, using the DTrace framework for application instrumentation. Joyent has a unique vision for cloud IaaS and is highly innovative from a technology perspective. It is developing an integrated technology stack and its infrastructure offerings verge into the platform space. It is making deep investments in fundamental technologies, including its own SmartOS operating system, based on Illumos (which is derived from Solaris). Joyent's cloud uses Solaris Containers. KVM runs natively within a container, thus providing additional security, resource control and resource visibility within the virtualization layer. Joyent has a pure focus on new, cloud-native applications, including mobile applications. Joyent is one of the top five public cloud IaaS providers by VM count. It has a strategy of international expansion that targets emerging markets with innovative developer ecosystems. It is the sponsor of Node.js, and it offers proprietary tools focused on Node.js operations within its platform. Joyent intends to derive its future revenue from a mix of offering cloud services directly and selling its SmartDataCenter software (including via OEM partners such as Dell). It has launched its Global Compute Network, a cloud federation alliance focused on mobile carriers; its strategic carrier partners include Telefonica and Bharti Airtel. Recommended use: Cloud-native applications where visibility into application performance is crucial. Joyent's feature set is oriented solely toward the hosting use case. It is a best-effort cloud, and it is highly developer-centric. It emphasizes API capabilities and the enablement of thirdparty tools, rather than portal capabilities of its own. It has a single-account model, and depends on a partnership with enstratus to provide granular RBAC. The unique nature of Joyent's offering makes it particularly critical for Joyent to develop an ecosystem around its platform; it must attract ISVs and third-party tools vendors, along with MSPs and SIs that can provide managed and professional services. Joyent is focused on developing its own technology, which creates long-term challenges in competing against providers with greater development resources. That said, it has chosen to focus its efforts in particular areas, leaving certain capabilities, notably enterprise management features, to partners such as enstratus. OVH OVH is an independent Web hoster with a focus on small or midsize businesses (SMBs). It offers paid-by-the-vm, VMware-virtualized public cloud IaaS, as well as a vcloud Datacenter Service for private cloud IaaS, with optional managed services, from data centers in France and Canada. It also offers object-based storage. OVH emphasizes self-service and a high degree of automation. It is one of the largest European cloud IaaS providers, by VM count. It has localized its site and documentation for a broad range of European languages. OVH's private cloud IaaS offering is particularly innovative. The offering can be set up within 30 minutes, and it allows customers to dynamically add and subtract hardware from their capacity pool with hourly billing and provisioning times of under five minutes, thus offering economics and flexibility comparable to public cloud in a single-tenant environment. Customers have a choice between vcloud Director and OVH's own, more user-friendly portal. Recommended uses: General business applications, e-business hosting, and test and development. OVH primarily targets SMBs, although it does have customers of significant size. Customers using OVH cloud services should strongly consider OVH's "VIP Support" option, which provides priority support and a dedicated account manager. OVH's cloud presence is heavily concentrated in a limited data center footprint. It has also just launched its Canadian data center. OVH cannot support common compliance requirements. Its public cloud cannot support complex network topologies, VMs that only have a private IP address, or customer-provided IP addresses, although these capabilities exist in its private cloud. Rackspace Rackspace is an independent Web hoster with a long track record of leadership in the managed hosting market. It offers a fixed-size, paid-by-the-vm, Xen-virtualized public cloud IaaS (Cloud Servers), with optional managed services, from data centers in the U.S. and the U.K. It also offers object-based storage (Cloud Files) with an integrated CDN (via a partnership with Akamai), database as a service, and cloud PaaS (Cloud Sites). It is a founder and the initial primary sponsor of OpenStack, an open-source cloud management platform, and its Cloud Builders business provides traditional commercial open-source support and professional services around it. 9/17

10 OpenStack's broad community of participating vendors is likely to make it a key cloud infrastructure ecosystem, in competition with VMware, Microsoft and Amazon. It should eventually allow Rackspace to introduce service enhancements at an improved pace and expand third-party management tools support. Rackspace intends to use OpenStack to enable it to offer hybrid clouds to customers who want OpenStack both in their internal data centers and in Rackspace data centers. Rackspace Cloud Servers is an easy-to-use service with a basic feature set, and excellent customer support. It has one of the lowest entry price points, making it attractive for initial experimentation with cloud IaaS. Rackspace has a large base of existing managed hosting customers that it can sell cloud into. Although most such customers currently opt for VMware-virtualized dedicated servers rather than using Cloud Servers, and Rackspace does not offer the full range of its managed services on Cloud Servers, the RackConnect hybrid offering may nevertheless be attractive to cost-sensitive customers. Recommended uses: Hybrid hosting where cloud IaaS is supplementary to a primarily dedicated infrastructure; and test and development for individual developers and small teams, where simplicity and ease of use are critical attributes. OpenStack is an emerging technology whose future direction is still uncertain. Rackspace recently relinquished most of its control over the project by launching the independent OpenStack Foundation (of which it remains a platinum sponsor). OpenStack's evolution may not necessarily align closely with Rackspace's needs it is possible that OpenStack could be successful without it leading to Rackspace's success. Rackspace Cloud Servers is a developer-centric, best-effort IaaS. While it has the secondlargest market share in public cloud IaaS, it has appealed primarily to small businesses seeking a replacement for low-cost mass-market hosting. It is missing many features that are part of the offerings of most of the evaluated providers, and which are vital for many enterprise use cases. For instance, it cannot support customer-provided IP addresses, granular RBAC, single-tenant VMs, or the ability to import a customer's own VM images. Rackspace is currently in a transitional stage, running two public cloud IaaS technology platforms simultaneously the previous proprietary Cloud Servers platform and the new OpenStack-based platform launched in August Some features are only available on one of those platforms. Rackspace's pace of new feature introduction has accelerated significantly since the new platform's launch. Existing Cloud Servers customers will eventually need to migrate to the new OpenStack offering. Rackspace has a diverse set of cloud-related businesses and will be challenged to manage the broad range of demands on its management team and its engineering resources. It must devote significant resources to OpenStack development, while also investing in its own proprietary, differentiated capabilities. Savvis Savvis, a CenturyLink company, is a Web hoster with a long track record of leadership in the hosting market. It has a suite of both public and private VMware-virtualized IaaS offerings with optional managed services, under the Symphony brand, offered in data centers in the U.S., Canada, Germany, Hong Kong, India, Japan, Singapore and the U.K. It also offers database as a service and co-location. Savvis has a very broad, multitiered IaaS product portfolio that can address a diverse range of customer needs, and a well-established track record of delivering enterprise cloud services for production and mission-critical needs. It has a particular emphasis on broad, deep security features. It offers its own custom portal, although Symphony Virtual Private Data Center (VPDC, its public cloud offering) also has a vcloud Director portal option. Most Web hosters do not offer their managed hosting customer portal to self-service, cloudonly customers. Savvis is one of the few that does. Its customer portal has one of the most comprehensive feature sets in the hosting industry and is, consequently, exceptional for the cloud IaaS market. While Savvis is increasingly focused on using the cloud as a means to enter the data center outsourcing market, it nevertheless has a competitive feature set for self-service, and successfully blends the self-service and managed services models across a hybrid solution portfolio. The existing Savvis base of managed hosting and co-location customers, along with the CenturyLink customer base, provides Savvis with cross-selling opportunities. Recommended uses: General business applications, enterprise applications, and test and development. Savvis has an extremely diverse product portfolio, with multiple flavors of single-tenant and multi-tenant IaaS. This can be confusing to prospective customers, and it can be difficult to decide which solution or combination of solutions is right for one's needs. It also proliferates narrow point solutions, rather than creating a unified platform that can be used to deliver a variety of flexible solutions. CenturyLink acquired Qwest and Savvis in While it is focused on integrating Qwest, Savvis has been left as a largely unchanged stand-alone entity, except for the integration of Qwest's hosting assets. But once CenturyLink finishes "digesting" Qwest, it may reassess its strategy for its Savvis assets. SoftLayer 10/17

11 SoftLayer is an independent Web hoster with a focus on SMBs. CloudLayer, its paid-by-the-vm, Citrix-Xen-virtualized, public and private cloud IaaS, is offered in data centers in the U.S., the Netherlands and Singapore. It also offers OpenStack object-based storage with an integrated CDN (via a partnership with Internap). SoftLayer is a thought leader in automated, highly standardized infrastructure services, provisioned on demand. It has an excellent portal, which offers integrated management across all its offerings. CloudLayer has a particularly clean service composition, with a range of options that can be added on a per-instance, paid-by-the-hour basis, including aspects such as the type of monitoring and the automated response to a failure detected by that monitor. Instances can be either VMs or dedicated servers, and it emphasizes that "bare metal" physical servers can be managed with the same elasticity as VMs. CloudLayer has an array of paid-by-the-hour, per-instance security options, including the option to integrate with third-party authentication (such as VeriSign Identity Protection). SoftLayer also offers free vulnerability scanning and payment card industry (PCI) compliance scans (in partnership with McAfee). Recommended uses: E-business hosting, general business applications, self-managed hybrid hosting, batch computing, and large-scale use cases such as gaming where "bare metal" is desirable. SoftLayer is strongly focused on self-service for SMB customers, although it has begun to target large-scale enterprise deals that need more consultative sales, a deeper level of support and greater flexibility from a service provider. Its feature set and road map, however, are focused on the needs of SMBs. Although SoftLayer has historically targeted technology businesses, it has previously principally targeted IT administrators rather than developers. It now has active developer outreach efforts, but its proprietary API has not gained widespread third-party tools support. Terremark Terremark, a Verizon company, encompasses Verizon's data center, cloud and security businesses. Its Enterprise Cloud brand encompasses multiple VMware-virtualized offerings the standard Enterprise Cloud (public cloud from the original Terremark), Private Edition (public cloud with single-tenant compute), Managed Edition (formerly the Verizon Computing as a Service public cloud offering), Express Edition (vcloud Express-based paid-by-the-vm public cloud), Public Sector (U.S. federal government community cloud) delivered from data centers in the U.S., Brazil, Hong Kong, the Netherlands and the U.K. Managed services are optional. Terremark also offers colocation. Terremark, via the standard Enterprise Cloud service, is the market share leader in VMwarevirtualized cloud IaaS. It has the longest track record in the market for enterprise-class public cloud IaaS, and among the best feature sets. Terremark can address hybrid hosting use cases via the Enterprise Cloud Managed Edition, which can offer "bare metal" physical servers on daily metering. This service also bundles in managed services, but it has fewer self-service capabilities. Terremark is developing a next-generation, unified platform that will launch in This new platform will enable Terremark to address a much broader range of use cases, and consolidates its development efforts onto a single hypervisor-neutral platform. Terremark's CloudSwitch acquisition gives it a tool that can be used to facilitate migration from, and interoperability with, other cloud environments, including AWS. It is using management talent acquired from CloudSwitch to drive its future strategy. Recommended uses: General business applications, and test and development. Until Terremark launches its new unified platform, customers must be careful to match the service they choose to their particular use case. Customers should also be aware that while Terremark is continuing to enhance existing offerings, its engineering focus has shifted to the new platform. Although Terremark has always done a significant amount of software development, rather than being wholly reliant on VMware, it is staking its future success on rapid innovation driven by agile development. This is an unusual strategy for a company that is owned by a carrier, and it is highly dependent on Verizon's willingness to interfere minimally with management. Tier 3 Tier 3 is a small, independent service provider that is solely focused on cloud services. It offers paid-by-the-vm, vcloud Powered public cloud IaaS from data centers in the U.S., Canada, Germany and the U.K. It also offers database as a service, and is venturing into Cloud Foundrybased PaaS. It is responsible for Iron Foundry, the.net extension of Cloud Foundry. Tier 3 combines a good set of features on a well-engineered platform, with an easy-to-use self-service portal. Although it is a vcloud Powered offering, its core architecture and software platform contain substantial custom engineering of its own, and it has an innovative and ambitious road map. It can offer a "premium" tier of VMs that are automatically replicated into a second data center, a unique feature. It has an exceptionally 11/17

12 strong SLA. Tier 3 has a scriptable templating feature called Blueprints. Blueprints can be used to provision complex, multi-data-center infrastructure configurations incorporating VMs, network elements and applications. For instance, one of Tier 3's provided Blueprints can provision highly available Microsoft Exchange Server using data availability groups. Tier 3 is becoming a hypervisor-agnostic provider, with the intent to provide a unified interface to clouds that are built using multiple different CMPs. It is emphasizing white-label and reseller capabilities, and the ability to federate between different Tier 3-based clouds. Recommended uses: E-business hosting, cloud-native applications, general business applications, and test and development. While Tier 3's offering is vcloud Powered, it does not expose the vcd UI. Consequently, customers do not receive the full extent of vcd's self-service capabilities. However, Tier 3 offers many additional features that are not part of vcd, and it is trying to strategically reduce its dependence on VMware. Tier 3 has limited brand awareness, marketing budget and sales capacity. It will be challenged to grow its business in an increasingly noisy, crowded market, and its global expansion will be highly dependent on partners. Tier 3 is a small but innovative service provider with a pure cloud IaaS business, which makes it a highly attractive target for acquisition. Virtustream Virtustream is a small, independent service provider that is solely focused on cloud services. It offers hypervisor-neutral public and private IaaS on its xstream platform, available from data centers in the U.S. and the U.K. Managed services are optional. Virtustream's founders have backgrounds in VMware and SAP consultancies, and the company has a strongly consultative approach, as well as particular expertise in SAP. Its cloud is targeted primarily at production applications, but in an unusual approach, it is targeting both traditional enterprise workloads, including ERP applications, as well as cloudnative applications. Virtustream has developed its own cloud platform technology, and uses a single unified architecture across public and private offerings, both within its own data centers and within customer data centers. While much of its infrastructure is VMware-virtualized, it can also support other hypervisors, and it is compatible with the AWS API. Virtustream's micro-vm technology allows it to charge for resources consumed, rather than resources allocated, and to offer policy-based service-level management and application performance SLAs. It has focused on meeting enterprise security and compliance needs, and it will be one of the first IaaS providers to support Intel's Trusted Execution Technology (TXT). Recommended uses: Enterprise applications, general business applications, e-business hosting and cloud-native applications. Although Virtustream supports a solid set of self-service features, it primarily targets complex, mission-critical applications where it is likely that the customer will purchase professional services assistance for implementation, and managed services on an ongoing basis. Virtustream is a small but innovative service provider, and may be an attractive target for acquisition. Its strategy will require it to attract and retain significant engineering talent as well as application expertise. It will be challenged to grow its brand awareness and to manage the lengthy sales cycles that will be common in its target use cases. Vendors Added or Dropped We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor appearing in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. This may be a reflection of a change in the market and, therefore, changed evaluation criteria, or a change of focus by a vendor. Added Dell Dimension Data (replacing OpSource, which it acquired) Fujitsu OVH Virtustream Dropped We dropped several vendors from this Magic Quadrant because we changed the inclusion criteria 12/17

13 to limit the evaluation to the top 15 vendors by market share, rather than using a minimum amount of revenue; this reduced the number of included vendors from 20 to 15. All of the vendors that were dropped qualify for this Magic Quadrant on all criteria except for market share, and should still be considered in competitive evaluations. The dropped vendors are: AT&T Carpathia Hosting Datapipe Hosting.com IBM iland NaviSite Tata Communications Virtacore Systems Inclusion and Exclusion Criteria To appear in this Magic Quadrant, vendors had to meet, as of June 2012, the following criteria: They must sell public cloud compute IaaS as a stand-alone service, without the requirement to bundle it with managed hosting, application development, application maintenance or other outsourcing. They may, optionally, also sell a private version of this offering that uses the same architecture but is not multi-tenant. The service must be enterprise-class, offering 24/7 customer support (including phone support), SLAs, the ability to scale an application beyond the capacity of a single physical server, an allowable VM size of at least eight compute units and 15 GB of RAM, the ability to support secure connectivity to the infrastructure, and support for role-based access control. They must offer this service in a minimum of two data centers, located in different metropolitan areas. They must be among the top 15 global providers, by Gartner-estimated market share for the evaluated services (public cloud IaaS and standardized private cloud IaaS). Vendors Considered, but Not Included This Magic Quadrant is global, but many of the providers are based in the U.S. This is a reflection of the way the market is evolving. The market has matured more quickly in the U.S. and the bulk of revenue comes from U.S.-based customers and flows to U.S.-based companies U.S.-based IaaS providers typically derive 20% or more of their revenue from customers outside the U.S. However, most of the providers in this Magic Quadrant offer their services on a global basis; most have at least one data center in North America, Western Europe and Asia/Pacific. In the evaluations for this Magic Quadrant, we considered a variety of interesting cloud IaaS providers but we were unable to include them because they did not have sufficient market share. The more distinctive providers include: CloudSigma, which has a unique pricing model with five-minute billing increments and programmatically accessible, demand-based, dynamic pricing. FireHost, which specializes in compliant solutions, especially for PCI. NaviSite, a Time Warner Cable Company, which has a broad and innovative feature set, and is one of the most capable platforms for enterprise applications. Peer 1 Hosting, whose Zunicore cloud IaaS offering has HPC options, including nvidia GPUs in "bare metal" physical servers. There were also providers that did not have public cloud IaaS offerings in general availability by June 2012, but had launched betas. Such providers include Microsoft (which introduced a persistent VM capability into Windows Azure, thereby giving it full IaaS functionality along with PaaS), Google (which introduced Google Compute Engine, an IaaS offering) and HP (which introduced HP Cloud Compute). We excluded PaaS providers from this Magic Quadrant, even though some businesses may use PaaS in a very IaaS-like manner. However, these PaaS offerings do not allow customers to obtain raw VMs that can be loaded with arbitrary OSs, middleware and applications, which is a requirement for being considered as IaaS. For PaaS providers, see "Platform as a Service: Definition, Taxonomy and Vendor Landscape, 2012." Evaluation Criteria Ability to Execute Gartner analysts evaluate technology providers on the quality and efficacy of the processes, systems, methods or procedures that enable IT providers' performance to be competitive, efficient and effective, and to positively affect revenue, retention and reputation. Ultimately, technology providers are judged on their ability to capitalize on their vision, and on their success in doing so. We evaluated vendors' Ability to Execute in this market by using the following criteria: Product/Service: Service providers were evaluated on the capabilities of their cloud IaaS offering to support the four use cases being evaluated. We evaluated the breadth and depth of the feature set, self-service capabilities, automated system management and suitability to run a broad range of workload types. Overall Viability (Business Unit, Financial, Strategy, Organization): Providers were evaluated on: 13/17

14 the success of their cloud IaaS business, as demonstrated by current revenue and revenue growth since the launch of their service; their financial wherewithal to continue investing in the business, and to execute successfully on their road maps; and their organizational commitment to this business, and its importance to the company's overall strategy. Sales Execution/Pricing: Providers were evaluated on their ability to: address the range of buyers for IaaS, including developers and business managers, as well as IT operations organizations; adapt to "frictionless selling" with online sales, immediate trials and proofs of concept; provide consultative sales and solutions engineering; be highly responsive to prospective customers; and offer value for money. Market Responsiveness and Track Record: The market is evolving extremely quickly and the rate of technological innovation is very high. Providers were evaluated on how well they have historically been able to respond to changing buyer needs and technology developments, rapidly iterate their service offerings, and deliver promised enhancements and services by the expected time. Marketing Execution: Providers were evaluated on: their mind share and brand awareness in the market; their ability to convey marketing messages based on their ability to deliver real business value, not empty hype or misleading "cloudwashing;" and the clarity and accuracy of their marketing messages, compared with their actual service offering. Customer Experience: Providers were evaluated on: the quality and responsiveness of their account management and technical support; the ease of use of their self-service functionality; the capabilities of their customer portal (additional functionality such as monitoring, reporting and trouble ticketing); the usefulness of their documentation and customer communications; the quality of their SLAs; ease of doing business with them; and overall customer satisfaction. Operations: Providers were evaluated on: their ability to meet their goals and commitments, including their track record of service delivery; the quality of their response to outages; and their ability to meet timelines that are communicated to customers and to the market. Table 1. Ability to Execute Evaluation Criteria Evaluation Criteria Weighting Product/Service Overall Viability (Business Unit, Financial, Strategy, Organization) Sales Execution/Pricing Market Responsiveness and Track Record Marketing Execution Customer Experience Operations Source: Gartner (October 2012) high standard standard high standard standard standard Completeness of Vision Gartner analysts evaluate technology providers on their ability to articulate logical statements convincingly about current and future market direction, innovation, customer needs and competitive forces, as well as how they map to Gartner's position. Ultimately, technology providers are assessed on their understanding of the ways in which market forces can be exploited to create opportunities. We assessed vendors' Completeness of Vision in this market by using the following criteria: Market Understanding: Providers were evaluated on their understanding of the wants and needs of three different buying constituencies in this market enterprises, midmarket businesses and technology companies of all sizes both currently and in the longer term as the use of IaaS matures. Marketing Strategy: Providers were evaluated on their ability to articulate their position in the market and their competitive differentiation, and to communicate these messages clearly and consistently, both internally and externally. Sales Strategy: Providers were evaluated on their understanding of the buying centers for the market, and the way that these different buying centers want to engage with sales, as well as their strategy for adapting their sales force, online channel and partner channels to the IaaS market. Offering (Product) Strategy: Providers were evaluated on the breadth, depth, quality and differentiation of their service road maps, as relevant to the four use cases under evaluation, with an emphasis on self-service, automated IT operations management and overall feature set. Business Model: Providers were evaluated on their overall value proposition and their strategy for providing solutions for the use cases under consideration, not just raw infrastructure elements. This included evaluating how IaaS fits into their broader product portfolio and product strategy. Vertical/Industry Strategy: Providers were evaluated on their ability to offer targeted services for particular verticals, such as government, biotech, media and entertainment, and retail. This includes sales and marketing to such verticals, their ability to meet specialized compliance needs, and vertical-specific solutions. Innovation: Providers were evaluated on the level of investment in the future of their business, and the quality of those investments, whether financial or human capital; this includes aspects such as the deployment of engineering resources, investments in new technology, mergers and acquisitions, and partnerships and alliances. Geographic Strategy: Providers were evaluated on their ability to expand their offering beyond their home region, serving the needs of multinational businesses, as well as adapting their offerings to other geographies. In particular, this included their strategy for 14/17

15 international sales and support, as well as their data center footprint and internationalization efforts. Table 2. Completeness of Vision Evaluation Criteria Evaluation Criteria Weighting Market Understanding Marketing Strategy Sales Strategy Offering (Product) Strategy Business Model Vertical/Industry Strategy Innovation Geographic Strategy Source: Gartner (October 2012) high standard standard high standard low high low Quadrant Descriptions Leaders Leaders have distinguished themselves by offering an excellent service and having an ambitious future road map. They usually serve a broad range of use cases well, although they do not excel in all areas, and they are not necessarily the best providers for a specific need. They have a track record of successful delivery, along with many referenceable customers. Challengers Challengers are well-positioned to serve current market needs. They deliver a good service that is targeted at a particular set of use cases, and they have a track record of successful delivery and many referenceable customers. They typically have a road map that is well focused on the customer segments that they serve, but it is not broadly ambitious, although they are making significant investments in the business. Visionaries Visionaries have an ambitious vision of the future, and are making significant investments in the development of unique technologies, but the service that they deliver today is best for a narrow range of use cases. Niche Players Niche Players may be excellent providers for the use cases in which they specialize, but may not serve a broad range of use cases well, or have a broadly ambitious road map. They may be relatively new entrants to this market. Context When people think about "cloud computing," cloud IaaS is often one of the first things that comes to mind. It's the "computing" in cloud computing on-demand compute, storage and network resources, delivered on-demand, in near-real-time, as a service. There has been tremendous hype surrounding these services, but there are a number of use cases for which cloud IaaS delivers excellent business value. Although the market is immature, it is evolving rapidly; it is beginning the journey up the Slope of Enlightenment on Gartner's "Hype Cycle for Cloud Computing, 2012." Unfortunately, there is a great deal of market confusion and many providers articulate their offerings poorly. Therefore, care should be taken in sourcing these services. The common use cases for cloud IaaS are: development and testing environments; highperformance computing and batch processing; Internet-facing websites and Web-based applications (which may or may not have architectures specifically designed for the cloud); and non-mission-critical internal business applications. Initially, most businesses choose use cases that are peripheral to their organization's IT needs, but over time, adopt cloud IaaS for mainstream business applications as well, including mission-critical applications, mirroring the past decade's adoption pattern of virtualization in the data center. Many businesses, especially in the midmarket, will eventually migrate away from running their own data centers in favor of relying primarily on infrastructure in the cloud. Although, at present, sourcing cloud IaaS is typically a tactical decision, many organizations are also looking for long-term strategic partners. However, we believe that the market is too immature for strategic choices to be made at this stage, and we recommend that prospective customers focus on finding the cloud provider that matches their specific use case, and likely their anticipated use cases for the next year. In many cases, businesses may have to use multiple cloud IaaS providers to meet the needs of a set of diverse use cases. 15/17

16 Market Overview Cloud IaaS is computing resources, along with associated storage and network resources, offered to the customer via self-service in a highly-automated way, on-demand and in near-real-time. In IaaS, the provider manages the data center facilities, hardware and virtualization, but everything above the hypervisor layer the OS, middleware and application is managed by the customer, or is an add-on managed service from the provider or another third party. This market is wholly separate and distinct from cloud PaaS and SaaS. Cloud IaaS is owned, built, and operated by a service provider, but it may be delivered onpremises within a customer's data center or hosted in the provider's data center. It may be "public" (multi-tenant) or "private" (single-tenant), although, in practice, there is no consistency in the application of these labels, and most hosted offerings use some degree of shared resources in services labeled "private." Cloud IaaS is not a commoditized service, and even providers with very similar offerings and underlying technologies often have sufficiently different implementations that there is a material difference in availability, performance, security and service features. See "Evaluating Cloud Infrastructure as a Service" and its related reports to understand the range of options available in this market. What Type of Workloads Are Being Placed on Cloud IaaS? There are three broad categories of customer needs in cloud IaaS: The hosting of a single application, or a closely related group of applications A VDC that will serve a broad range of different workloads Batch computing Hosting is the most common need. For instance, a media company with a marketing microsite for a movie, a software company offering SaaS and a retailer needing a lightweight version of its e- commerce site for disaster-recovery purposes are all examples of customers with hosting needs that can be fulfilled by IaaS. These are generally production applications, although there is some test and development as well. Some of these customers have mission-critical needs, while others do not. Customers with a broad range of unrelated workloads are less commonplace, but are growing in importance, particularly in the midmarket, where IaaS is gradually replacing or supplementing traditional data center infrastructure. The VDC is typically used very similarly to the organization's internal virtualization environment primarily for less mission-critical production applications, or test and development environments but is increasingly being used to run more mission-critical applications. The least common need, but one that nevertheless drives significant revenue for the small number of providers that service this portion of the market, is batch computing. For these customers, IaaS serves as a substitute for traditional high-performance computing or grid computing. Customer needs include rendering, video encoding, genetic sequencing, modeling and simulation, numerical analysis and data analytics. Other than the need to access large amounts of commodity compute at the lowest possible price, with little concern for infrastructure reliability, these customers typically have needs very similar to those of VDC customers, although some HPC use cases benefit from specialized hardware such as GPUs and high-speed interconnects. What Are the Key Market Aspects of Which Buyers Should Be Aware? One size does not fit all. As the IaaS market matures, clarity is emerging about the range of different customer needs. Workloads vary in their availability and performance needs, and in the general complexity of the overall application infrastructure. Customers vary in the importance that they place on security, customer service and ease of use. Customers also vary in how much they want to manage themselves, versus how much they want the IaaS provider to manage for them. While some providers are beginning to address differentiated customer needs in a targeted fashion, most service providers still take a "one size fits all" approach, which can make it difficult to determine if a particular provider is the right one for a particular set of business and technical needs. IaaS can be used to run a broadening range of workloads. Service providers are moving toward infrastructure platforms that can offer physical (non-virtualized) and virtual resources, priced according to the level of availability, performance, security and isolation that the customer selects. This allows customers to run both "cloud native" applications that have been architected with cloud transaction processing principles in mind (see "From OLTP to Cloud TP: The Third Era of Transaction Processing Aims to the Cloud"), as well as migrate existing business applications from their own virtualized servers in internal data centers into the cloud, without changes. Public and private cloud IaaS are converging. Service providers are increasingly using dynamic physical and logical isolation mechanisms to create "private" infrastructure within a shared, multitenant capacity pool. This allows economies of scale while enabling customers to meet a broader range of security and compliance requirements. See "Best Practice: Evaluate Isolation Mechanisms in Public and Private Cloud IaaS" for details on this convergence and how to choose the level of isolation that you need. We believe that over time, the leading providers will offer a single, highly flexible platform across both their own data centers and customer data centers. As a result, this 2012 Magic Quadrant covers not only public cloud IaaS, but standardized private cloud IaaS as well. The buying centers for IaaS are diverse. The early adopters in the IaaS market were developers. As the market matures, developers remain an important audience, because a great deal of IaaS adoption is business led driven by business managers who hold the budget, need greater agility and have shorter time frames than IT Operations is able to accommodate, and who therefore turn to application developers and enterprise architects for a solution. This is particularly true for the single-application, "hosting" side of the market. IT Operations is, however, increasingly involved in IaaS sourcing, and is likely to be the primary buying center for multiple- 16/17

17 application needs. IaaS providers vary in their ability to target these different buying centers. Furthermore, most providers focus on either a developer audience or an IT operations audience, and their feature set and style of service are oriented accordingly. More aspects of IT operations management are being automated, so that IaaS offers value beyond self-service provisioning. For companies with reasonable access to capital and which already have an IT operations team, today's IaaS offerings may not represent cost savings for typical business workloads. Self-service provisioning in the public cloud is often not a significant improvement over a well-managed virtualized infrastructure within an internal data center. To truly drive value to customers, cloud IaaS providers must expose superior IT operations management tools to customers, and find ways to reduce the burden of operations, starting with automated patch management and backups. Manual managed services are frequently used to substitute for automated offerings. Evolving toward the delivery of automated IT operations management, in conjunction with self-service tools and reports, is critical for leadership in this market. Similarly, providers are increasingly offering programmatic (API) access to their infrastructure, which enables customers, as well as third parties, to build management tools for their platforms. Customers do not usually save money by using cloud IaaS. While many customers first investigate using IaaS to achieve cost savings, most customers buy IaaS to achieve greater business agility, or to gain access to infrastructure capabilities that they do not have within their own data center. IaaS can drive significant cost savings when customers have short-term, seasonal, disaster recovery or batch computing needs. It can also be a boon to companies with limited access to capital and to small companies, especially startups, which cannot afford to invest in infrastructure. (See "Cloud Computing Can Be the Singular Solution for at Least Five Use Cases" for details.) For larger businesses with existing internal data centers and IT operations teams, IaaS for steadystate workloads is often no less expensive, and may be more expensive, than an internal private cloud. While provider efficiencies will increase over time, and automated managed services will substantially drive down the cost of infrastructure management, the state of technology has not yet advanced to that point. There are many providers, but they vary widely in quality. There are many competitors in the market; new entrants continue to launch offerings and existing providers are expanding the market segments that they serve. Many providers are more interested in managed services than in the highly automated, self-service market, and consequently the quality of their technology and their investment in engineering varies greatly. Moreover, many of the newer market entrants are very large IT companies with a great deal of sales reach, which has enabled them to rapidly take market share. Yet these companies do not necessarily have superior offerings. Indeed, many of the better providers are actually smaller, highly innovative companies. Nevertheless, this is becoming a scale business, and many providers will be challenged to execute well in the rapidly evolving market. Most providers are able to deliver a basic offering with reasonable availability, performance and security, and good customer support but many have limited differentiation and value-add beyond the ability to provision resources quickly. Therefore, significant due diligence must be taken to evaluate providers thoroughly Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in any form without Gartner s prior written permission. If you are authorized to access this publication, your use of it is subject to the Usage Guidelines for Gartner Services posted on gartner.com. The information contained in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication consists of the opinions of Gartner s research organization and should not be construed as statements of fact. The opinions expressed herein are subject to change without notice. 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