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Asia Pacific Infrastructure as a Service (IaaS) Market 2010
Frost & Sullivan, May 2011, Pages: 53
Infrastructure as a Service (IaaS) is a provision model in which organizations outsource their IT (storage and compute) hardware to a service provider that owns the equipment and is responsible for housing, running and maintaining it with the client typically paying on a per-use basis. The IaaS market is witnessing increasing traction as the delivery model offers lower total cost of ownership and is fast to implement. The research study covers the Asia Pacific IaaS market, examining drivers and restraints for growth, exploring trends that are impacting the market and the key market participants in the region. Forecasts and market sizing is included in this study with the base year is 2010 with forecasts running through 2017.
Research Overview
This report provides an overview of the market scenario as well as the factors that are aiding or deterring its growth. In this research expert analysts thoroughly examine the following segments: computing and storage.
Market Overview
Cost Benefits Ensure Strong Demand Levels in the Asia Pacific Infrastructure as a Service Market
During 2010, the Asia Pacific IaaS market witnessed explosive growth, owing largely to customer need for utility based computing services with predictable operational expenditure. Growing awareness of the benefits of leveraging infrastructure from the cloud has led to increasing traction in the Asia Pacific IaaS market. The roll out of next-generation networks across the region is expected to improve network infrastructure in favor of IaaS. “The ability to instantaneously provision infrastructure and scale it in an on-demand manner is a highly attractive model for enterprises in the region,’ notes the analyst of this research service. “The value proposition is even more compelling considering the operational expenditures (OpEx) nature of the services, eliminating the need for capital expenditure (CapEx) required for setting up and/or ramping up dedicated infrastructure.”
Most enterprises in the region are testing these services to gain a better understanding of the delivery model. This is being made possible due to the low cost, such as a few cents for an hour of compute instance, of trying out these services and the absence of long- term contracts. The delivery model is especially beneficial for small and medium businesses (SMBs), as it provides them access to infrastructure that may have earlier been unaffordable. This has expanded the market for IaaS and is another important growth driver.
Security Issues Surrounding Data Storage in the Cloud Can Restrain Uptake
Widespread adoption of cloud-based infrastructure in the region is still a few years away. Concerns around security, privacy, and sovereignty of data are the prime challenges for the market. Further, the choice of adopting a public or a private cloud is not easy for enterprises, given the perceived security and cost savings trade-off. Enterprises are hesitant to give complete control of their infrastructure and data to a third-party service provider. Their concerns range from inability to track data in the cloud to access rights for data in a multi-tenant environment. Non availability of services in the event of a system’s failure or outage at the service providers’ end or in the network is another concern. Furthermore, latency and Internet access reliability issues are making enterprises cautious while adopting IaaS. These factors are limiting usage to trial, testing, and development, and to meet spikes in demand.
Service providers are looking to assuage these concerns by conducting third-party audits, adoption of best practice frameworks, such as Statement on
Auditing Standards (SAS) 70 and International Standard for Standardization
(ISO 27001), and ramping up awareness of the security measures in place. Educating the enterprises is a critical piece of the service provider strategy to mitigate end-user concerns. Periodic third-party assessments will help instill enterprise confidence in security features. Setting up local data center presence is a sure way to overcome enterprise concerns. “The upsurge in demand from enterprises in the Asia Pacific has already led global players such as Amazon, Microsoft, Rackspace, and Verizon to establish local presence,” says the analyst. ‘Furthermore, local presence gives more confidence to enterprises that their data will stay geographically closer and curb latency issues.” It is also essential for service providers to evolve service level agreements (SLAs) beyond availability in line with client requirements. They are also likely to include disaster recovery/business continuity plan (DR/BCP), incident handling, and guarantees instead of credits to further drive enterprise confidence.
Market Sectors
Expert analysts thoroughly examine the following market sectors in this research:
- Computing
- Storage
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