Even so, IaaS spending will hit $16.5 billion this year, up 32.8 percent from last year and with a compound annual growth rate (CAGR) between 2014 to 2019 of 29.1 percent.
“Brutal competitive dynamics” meant last year was “a year of reckoning” for cloud IaaS providers. Many made changes to their current platform while other providers will end or cut investment in cloud IaaS offerings.
Senior analyst Lydia Leong has some strong words of advice for buyers. “We urge buyers to be extremely cautious when selecting providers; ask specific and detailed questions about the provider’s roadmap for the service, and seek contractual commitments that do not permit the provider to modify substantially or to discontinue the offering without at least 12 months’ notice,” she said.
While cloud IaaS can be used to run many workloads, not every provider can do that well, she continued. “Cloud IaaS is not a commodity. Providers vary significantly in their features, performance, cost and business terms.”
Richard Davies, the CEO of ElasticHosts said that while it was good to see the growth in IaaS there’s bad news for buyers. “A lot of capacity spend is actually being squandered. Even in a cloud environment, people are still regularly over provisioning by an average of 50 percent,” he said. “As IaaS workloads continue to surpass the growth of on permises workloads, this level of wastage is set to increase further.”