Here's Who Made Gartner's 2017 Magic Quadrant For Cloud IaaS
An Expanding IaaS Field?
In recent years, the global public Infrastructure-as-a-Service market has both grown rapidly, and seen the number of prominent vendors decrease.
That dynamic was reflected in the past few Gartner Magic Quadrants for IaaS, which saw the research company consistently shed vendors from its eagerly anticipated rankings. But Gartner's 2017 report, released Thursday, bucked that trend, evaluating four more companies than the previous year's.
Two of those newcomers -- Interoute and Joyent -- made comebacks to the list after having fallen off in 2016. And two others -- Alibaba Cloud and Oracle -- are new players that have the technical talent, funding and market reach to make their presence felt in the market.
The only vendor dropped in 2017 from the previous year's Magic Quadrant was VMware, which recently sold off the remnants of its vCloud Air public cloud to European provider OVH.
While several companies made moves, the Leaders Quadrant in the 2017 report once again only contained two companies -- dominant industry kingpin Amazon Web Services, and Microsoft Azure. Google just came up short from busting into that category.
Methodology
The Gartner Magic Quadrant ranks cloud vendors on two criteria: Ability to Execute and Completeness of Vision.
Execution is represented on the Y-axis of Gartner's chart; vision on the X-axis. That lands competitors into one of four quadrants: Niche Players (low in both criteria), Visionaries (complete vision but lacking execution), Challengers (good execution but lacking vision), and Leaders (excelling in both vision and execution).
Among the 14 providers evaluated this year, eight were relegated to Niche Player status. Four others, including newcomers to the list Alibaba Cloud and Oracle, were deemed Visionaries. Only Amazon Web Services and Microsoft, once again, made the Leaders quadrant.
Leader: Amazon Web Services
AWS has been at the top of the IaaS heap for more than a decade, still the most popular choice among enterprises looking for strategic, organizationwide cloud adoption.
The Amazon division closed out last year with a run rate exceeding $14 billion.
"It continues to be the thought leader and the reference point for all competitors, with an accelerating pace of innovation on top of an already rich portfolio of services, and an expanding impact across a range of IT markets," Gartner noted.
"AWS has just begun to adapt to the emergence of meaningful competitors," said Gartner.
There's little you can't do in the AWS cloud, although complex legacy applications with strict compliance restrictions need special attention to architecture.
"Transformation efforts are best undertaken in conjunction with an SI," the research firm noted.
Amazon Web Services
Strengths: AWS is widely viewed as the safe choice in public cloud because of its longtime market leadership, with appeal to customers looking for a broad range of capabilities.
"It is the provider not only chosen by customers that value innovation and are implementing digital business projects, but also preferred by customers that are migrating traditional data centers to cloud IaaS," said Gartner.
More than 2,000 consulting partners, offering managed and professional services, ease implementation, migration and management. AWS also enjoys the broadest ecosystem of ISVs.
Cautions: Expertise is needed for implementation of advanced features, according to the research firm. But Amazon's extensive training and certification programs, along with accreditation of managed services partners, helps customers find experienced consultancies.
"Customers should be aware that while it's easy to get started, optimal use -- especially keeping up with new service innovations and best practices, and managing costs -- may challenge even highly agile, expert IT organizations, including AWS partners," Gartner said.
While perceived as a cost leader, Amazon's granular pricing is complex, and it's not "eager to be the lowest-cost bidder in a competitive situation."
Leader: Microsoft Azure
Microsoft Azure maintains a firm second place in market share for IaaS and integrated IaaS and PaaS. But while Microsoft currently appears the only true challenger to Amazon Web Services, Azure still lags behind the industry leader on both axes of the Magic Quadrant -- only slightly in Completeness of Vision, more so in Ability to Execute.
Microsoft's cloud, originally born as a PaaS offering, offers a rich set of capabilities, including a container service, CDN, batch-computing and serverless computing, Gartner noted.
After years of high growth, Gartner estimates Azure achieved a run rate at the end of last year of about $3 billion.
Microsoft Azure
Strengths: "Azure is already a very capable and broad platform, and Microsoft continues to accelerate its new-feature velocity," said Gartner. The innovative capabilities being launched are no longer just copying competitors, according to the research firm.
Customers committed to Microsoft technologies are frequently choosing Azure as a strategic cloud provider.
And in a "vital and positive strategic shift," Microsoft has become been embracing open-source technologies.
Cautions: While Microsoft is a highly experienced enterprise software vendor, some clients told Gartner the Azure service "feels less enterprise-ready than they expected."
Those customers cited issues with technical support, documentation, training and breadth of the ISV partner ecosystem -- issues Microsoft is addressing.
Gartner assigned some fault to Microsoft's channel.
"The disorganized and inexperienced ecosystem of managed and professional service partners" has made it difficult for some customers to find experts, fostering reluctance to deploy production applications or migrate entire data centers, according to the research firm.
Visionary: Google
Google barely remains confined to the Visionaries quadrant, just a hair to low on the Ability to Execute axis to break into Leaders territory. Gartner estimates Google a distant third in market share, behind its two rivals in the Leaders quadrant: AWS and Microsoft.
Google Cloud Platform excels for big data applications, batch computing and cloud-native applications, according to Gartner.
The internet giant's strategy for growing its market share remains commercializing its well-known consumer technologies by delivering them as services. That's an enticing offer for cloud-native companies that want to "run like Google," said Gartner.
Strengths: Google has become far more aggressive in pursuing enterprise customers looking for a cloud to host traditional workloads and IT processes, according to Gartner.
"Google's ability to sell to a broad range of customers has improved significantly over the past year -- a visible impact from recent deeper investments in GCP," the research firm said.
Gartner has noticed customers choosing GCP as a secondary, rather than strategic, provider. But companies that compete with Amazon seem to increasingly look to Google as a strategic alternative to the cloud leader.
Cautions: Google is still trying to achieve feature-parity with competitors to compliment its strong core capabilities, according to Gartner.
"Google is introducing more capabilities and partnerships that are important to enterprise customers," but until recently had been mostly focused on cloud-native applications and DevOps-style operations, not legacy workloads, the research firm said.
Google only recently began building a strong channel, and still has few MSP and professional services partners. That "significantly heightens the challenges of adopting GCP," Gartner said.
Google is also busy recruiting partners to build management tools.
Visionary: Oracle
The software and systems giant is a relatively new entrant to the cloud infrastructure market, but made a strong debut on Gartner's Magic Quadrant as a Visionary.
Oracle didn't launch its first IaaS offering until late 2015, when it introduced Oracle Compute Cloud Service, or its "Gen 1 Cloud". In November 2016, Oracle launched Oracle Bare Metal Cloud Services, also known as "Gen 2 Cloud".
The acquisition of Ravello, an overlay on top of third-party clouds to facilitate migrations and interoperability, beefed up those offerings.
Oracle's Gen 2, a combination of bare-metal and virtualized servers, is well-suited for cloud-native applications or batch computing. It's also a pretty good environment on which to run Oracle databases.
Oracle
Strengths: Oracle's Gen 2, which ultimately will support the software giant's SaaS and PaaS products, "is being built by a highly experienced engineering team recruited primarily from hyperscale cloud providers," said Gartner
It includes a "thoughtful selection of current and future features" and the hyper-scale architecture is well-designed, according to the research firm.
Despite the late entry into the market, "Oracle has a realistic perspective" and "a sensible engineering roadmap focused on building a set of core capabilities that will eventually make it attractive for targeted use cases," Gartner said
Oracle also has a powerful anchor -- the Oracle Database.
Cautions: The Gen 2 offering currently delivers only the most "vitally necessary cloud IaaS compute, storage and networking capabilities." And with its limited operational track record, most customers are dependent on direct support from Oracle's engineering team, according to Gartner.
That means customers should have a high tolerance for risk, as well as strong technical acumen, the research firm said.
Oracle has just begun to build a partner ecosystem.
Gartner warns potential customers to be cautious of high-pressure sales tactics.
Visionary: IBM
IBM crossed the vertical axis from Niche Players to Visionaries in the 2017 IaaS Magic Quadrant.
The global technology giant is currently rolling the SoftLayer branding, comprised of assets it acquired in 2013 and then later expanded, into a broadened Bluemix offering. Bluemix initially was only Big Blue's PaaS product.
IBM is also engaged in revamping its hyper-scale infrastructure through the "Next-Generation Infrastructure" (NGI) engineering project, with aggressive design goals for price and performance. No release date has been announced, however.
IBM
Strengths: NGI will eventually be the basis of IBM's cloud IaaS offerings, as well as the platform for other IBM Cloud products, all presented as a "Bluemix experience".
When the platform is ready, IBM intends to gradually transition its existing infrastructure customers to NGI.
"The eventual rollout of its NGI architecture is likely to help IBM evolve beyond its current status as a hosting-scale provider, making it more viable for IBM to match the cost economics of the market leaders," Gartner noted.
Cautions: While NGI is an ambitious project, IBM's current cloud still runs on SoftLayer infrastructure, which has not seen much advancement to its feature sets since the SoftLayer acquisition, said Gartner.
SoftLayer lacks many cloud IaaS capabilities required by midmarket and enterprise customers, according to the research firm.
And there's historical precedent in IBM's cloud business for engineering problems slowing new products from hitting the market.
Visionary: Alibaba Cloud
New to the Magic Quadrant, the Chinese e-commerce giant's cloud has achieved global reach. But the international offering, run out of Singapore, lags the Chinese one in feature set development and performance.
Alibaba Cloud is the current market share leader for cloud IaaS in China, and performs particularly well for Chinese digital businesses and agencies within the Chinese government.
"Alibaba Cloud has substantial challenges that it must overcome before it can translate its success in China to markets outside of its home territory," Gartner said.
Alibaba Cloud
Strengths: Parent company Alibaba Group has the financial means to keep investing in expansion, engineering, sales and marketing efforts. The cloud already offers a diverse set of capabilities comparable to hyper-scale giants, and is building out global data centers.
Alibaba has built "an impressive ecosystem" in China of managed services providers and ISVs, and is beginning to attract global partners, Gartner said.
There's the potential to become an alternative to global cloud giants in some regions based on the combination of integrated IaaS and PaaS with a private cloud stack.
Cautions: The international Alibaba Cloud was only launched in 2016, and there's a limited track record, according to Gartner. That particular product, less developed than the Chinese version, does little to differentiate itself.
"Alibaba Cloud's vision seems inextricably tied to that of its global competitors," Gartner noted. "It takes liberal inspiration from competitors when developing service capabilities and branding."
Niche Player: Fujitsu
Fujitsu is an IT outsourcing leader in Asia. The Japanese electronics giant has offered cloud infrastructure services to its global customer base since 2010.
In 2016, Fujitsu rolled out a new, OpenStack-based platform called K5, one intended to deliver a consistent service across public cloud, hosted private cloud and outsourced private clouds.
The predecessor offering, S5, is still available, though. Fujitsu also has legacy offerings in certain parts of the world that use different technologies.
Fujitsu
Strengths: Fujitsu has a large global sales force that can lean on strong IT services outsourcing businesses in Asia and Europe.
"This gives it a large existing base of captive customers into which it can sell cloud services," according to Gartner.
Fujitsu has been successful at extending those existing relationships into cloud deals, maintaining responsive support and good account management for customers.
Cautions: K5, the new platform Fujitsu intends to expand globally throughout 2017, doesn't have a significant operational track record, according to Gartner. It also doesn't do much to add capabilities beyond S5, which lags significantly behind market leaders, or improve the user experience.
"K5 IaaS provides a better foundation for the future than S5, but Fujitsu will continue to need to aggressively invest in acquiring and building technology in order to be competitive in this market," the research firm said.
Niche Player: Virtustream
A perennial Niche Player on Gartner's list, this Dell subsidiary focuses on delivering complex enterprise applications, especially large-scale SAP implementations.
Virtustream has developed an advanced platform geared for hosting mission-critical production workloads -- both legacy and cloud-native.
The provider focuses on offering deep and differentiated expertise in running large ERP systems.
Virtustream
Strengths: Virtustream differentiates itself with application-specific expertise. The platform is purpose-built for high availability, performance, security, governance and demanding SLA requirements.
"Virtustream has weathered the challenges of being acquired twice within a short period of time and is thriving under Dell, its new host. It has continued to successfully win large-scale enterprise deals, particularly those focused on SAP and that require managed service capabilities," said Gartner
Cautions: Customers should expect Virtustream to continue to focus on core strengths, rather than expanding into the broader cloud IaaS market, according to Gartner.
Gartner also noted the company's road map now "is inextricably tied into other Dell entities, such as VMware, EMC and Pivotal, which each have their own sets of differing, and possibly competing, priorities."
Virtustream is capable of supporting self-service deployments. But customers hosting complex applications should seek professional services for implementation, and ongoing managed services.
Niche Player: CenturyLink
CenturyLink initially built its cloud through the acquisitions of Tier 3 and Savvis, and the telecom continues expanding its capabilities through acquisitions.
Last year, CenturyLink bought netAura to bulk up internal security services expertise, and ElasticBox to gain hybrid cloud management technology. Later in the year, CenturyLink announced its intention to acquire Level 3 Communications, which, while not directly impacting the cloud portfolio, will greatly expand its network.
CenturyLink
Strengths: "CenturyLink has built a solid platform for increasing its own agility and ability to deliver new service offerings," Gartner noted. That platform is increasingly emphasizing hybrid and multi-cloud capabilities.
CenturyLink has historically used cloud IaaS as a means to pursue managed services business. But that strategy hasn't stopped the telecom from building a competitive feature set for self-service customers, and blending self-service and managed-service models across a hybrid solution portfolio, the research firm said.
Cautions: Despite successful execution on its roadmap and recent acquisitions, competitors are still outpacing CenturyLink, according to Gartner. The provider's stated intention of integrating Platform-as-a-Service shows little progress.
The Level 3 acquisition, by which CenturyLink is expanding its global telecom footprint, and the sale of data center assets, "creates some uncertainty around the vendor's future cloud ambitions," said Gartner.
The cloud-focused acquisitions support a hybrid and multi-cloud strategy -- not one focused on its own IaaS and PaaS.
Niche Player: Rackspace
The managed cloud provider was an early entrant in the IaaS market in 2008 after the acquisition of Slicehost, and played a pivotal role in the development of OpenStack.
Of late, Rackspace has tried to expand its IaaS reach with VMware and Microsoft-virtualized clouds, as well as a private offering delivering its own OpenStack technologies.
Rackspace was sold to Apollo Global Management, a private-equity investor, in late 2016.
No longer a publicly traded company required to reveal financials, Rackspace may find it easier to execute a strategic shift toward delivering cloud managed services on a variety of platforms. But the privatization can also make it harder for customers to assess risks, Gartner said.
Rackspace
Strengths: In recent years, Rackspace has evolved its business to delivering private cloud infrastructure across a variety of technology platforms. Rackspace is now the market leader in industrialized private cloud IaaS.
The company, since privatization, has also "returned to its roots in managed services," said Gartner. Rackspace now offers its high-touch managed services for its own infrastructure, as well as on partner platforms: AWS, Microsoft Azure and Google Cloud.
Those partnerships with the three hyper-scale powerhouses make Rackspace "well-positioned to deliver hybrid and multi-cloud solutions," according to Gartner.
Cautions: There's little to differentiate Rackspace's IaaS offerings from competitors, said Gartner.
For private infrastructure, where Rackspace has excelled of late, that's common. But public cloud customers expect more in today's market, Gartner noted.
Niche Player: Interoute
Interoute dropped off the 2016 Magic Quadrant only to find its way back this year. The United Kingdom-based communication services provider offers CloudStack-based infrastructure through the Interoute Virtual Data Centre (VDC).
The cloud includes a "managed container platform" that offers a Rancher-based container management framework on top of VDC infrastructure.
"Interoute's flexible range of choices for tenancy models, hypervisors, pricing models, and support and service models provides customers with a variety of interoperable options," Gartner noted.
Interoute
Strengths: The provider has tightly integrated its cloud with a global communications network spanning Europe. That "network-attached cloud computing" simplifies integration with networking resources and delivers the ability to use an API to configure networks spanning multiple sites.
Interoute's cloud also provides direct connectivity to AWS and Azure, facilitating multi-cloud solutions.
The provider is developing capabilities useful for customers running complex distributed applications with microservices and other container-oriented architectures.
Cautions: Interoute doesn't deliver higher-level cloud services other than those around communications, according to Gartner. The provider is depending on partners to build and offer advanced features on its VDC platform.
While Interoute has begun to build an ecosystem of software partners for its CloudStore online marketplace, it still needs to recruit solution partners. But awareness of its brand is limited outside Europe.
Niche Player: NTT Com munications
The Japanese telecommunications giant, part of the NTT Group, significantly revamped its NTT Enterprise Cloud last year. It now has three unique offerings: Enterprise Cloud 1.0 for production workloads, Cloudn for development environments and cloud-native applications, and Enterprise Cloud 2.0, which was intended to unify the two other platforms.
Those cloud offerings are often attractive to customers that need a pan-Asian footprint for hosting business applications.
NTT Communications
Strengths: NTT Communications enjoys a large customer base, especially in Asia. And its sister companies in the NTT conglomerate can also bring in customers, as well as their partner networks.
NTT Com has a long track record delivering managed hosting and security services, which it can layer on top of Enterprise Cloud 2.0.
The company's global network reduces both total cost of its cloud solutions and friction in customer implementations, Gartner noted.
Cautions: Enterprise Cloud 2.0, the unified platform, still seems like a cloud in transition. It is a basic IaaS service with little differentiation and missing many capabilities that are important to customers, according to Gartner.
The new IaaS offering at the heart of NTT Com's strategic cloud shift also has a limited operational track record. So far, Enterprise Cloud 2.0 shows more outages than is typical for the industry, the research firm said.
Niche Player: Joyent
Joyent fell off Gartner's rankings last year. But now under Samsung's umbrella, the innovative provider is back, differentiating itself with Triton, a unified platform for running virtual machines and containers.
Samsung is investing heavily in Joyent to fulfill its internal infrastructure needs. But the Korean tech giant lacks a track record in delivering cloud services to businesses, according to Gartner.
Joyent
Strengths: Joyent was always an innovator boasting deep engineering talent. One point of differentiation is its unified approach to VMs and containers.
Because Joyent is strongly committed to open-sourcing its entire stack, "Joyent's innovations have found their way into open-source projects that customers can utilize to deploy on-premises, private cloud instantiations of Joyent's public cloud IaaS offerings," said Gartner.
That's a boon for building hybrid clouds.
Cautions: Joyent hasn't worked much with traditional enterprises -- most customers are startups, tech companies or digital divisions of larger enterprises, according to Gartner. Those customers typically build cloud-native applications, rather than migrating existing applications.
The provider doesn't offer many capabilities, said the research firm, with even basic features like load balancing rely on hosted appliances or container instances.
Samsung's primary objective in acquiring Joyent was to get its own low-cost hybrid cloud platform to power its mobile and IoT businesses.
"Samsung's internal priorities will increasingly drive Joyent's priorities," Gartner noted. Those needs could deviate from external customers.
Niche Player: Skytap
This brand-new entrant to the Magic Quadrant is a small, independent provider offering VMware-virtualized infrastructure. The company has carved out a niche in the highly competitive industry with a differentiated offering focused on modeling complex enterprise environments, especially those with complicated network setups.
Through a close partnership with IBM, Skytap's service is sometimes resold as IBM Cloud for Skytap Solutions.
Skytap
Strengths: Skytap makes it easy to create sandboxes that accurately replicate enterprise environments, facilitating development, demos and training while production workloads remain on-premises.
Infrastructure resources and configurations, with the software running on the VM, are composed into "environments" that can easily be snapshotted, cloned and shared for collaborative purposes.
Cautions: Skytap only recently started hosting production applications, and those are primarily traditional applications, not ones that are cloud-native.
The small startup may have trouble expanding beyond its niche, according to Gartner.
And while the partnership with IBM is useful to extend sales, it gives IBM a lot of influence over the company's future.
Gartner notes Skytap could be targeted for acquisition.