The IaaS market is dominated by Amazon Web Services (AWS) and Microsoft Azure which together have over 60% market share. AWS alone has almost 50% share, although growth is beginning to slow. The extraordinary dominance and growth of AWS and Microsoft Azure is largely driven by organizations that have decided to exit private data centers, and firms looking to build competitive advantage through large-scale digital transformation.
Iaas + PaaS Combinations
The research firm Gartner has posited that the market for standalone IaaS platforms is shrinking and that these vendors will remain niche vendors. The market is moving in the direction of combined IaaS/PaaS offerings where both systems have been architected to work seamlessly together.
AWS, Google, and Microsoft are all examples of vendors that combine these capabilities in a single platform. AWS offers its Elastic Beanstalk PaaS which is fully integrated with its IaaS platform. Similarly, Google offers the Google Compute Engine IaaS platform alongside Google App Engine. Microsoft Azure also offers the Azure IaaS platform with the integrated PaaS called App Service for building, deploying, and scaling web apps.
Pure-play IaaS Niche vendors
But what of the so-called niche players in the IaaS space? Should these vendors be on your shortlist? Let’s take a look at three of the better-known second-tier platforms and their strategies to compete.
DigitalOcean: DigitalOcean has developed effective go-to-market differentiation simply by focusing on a different set of buyers. Instead of selling to ITOps teams, DigitalOcean targets developers. They focus on giving developers an easy and quick way to set up inexpensive Linux instances (called “droplets”) which developers can use to host anything from web servers to back-end data-crunching operations.
The company provides developers with lots of easy-to-understand platform tutorials and simple and inexpensive services. Everything they do is in support of the strategy of focusing on developers: DigitalOcean is relatively inexpensive. The product is the most affordable among all cloud providers. Pricing starts at $0.007/hour or $5/month, with no hidden or supplemental charges. The company is also known for providing very high-performance servers designed to appeal to developers.
Reviews indicate value pricing, intuitive design, and a very supportive developer community as significant strengths.
Read reviews of DigitalOcean on TrustRadius.
Rackspace: Rackspace is an agnostic cloud hosting platform and in fact will readily host AWS and Microsoft Azure. However, the company also provides a fully-managed IaaS called Rackspace Managed Hosting. The differentiation here is clear. A managed service does provide some advantages for organizations with a small team and limited skills. It also makes sense when the business is growing, and technical needs are growing faster than organizations can hire.
For companies like this, it may make more sense to focus on core competencies and let an expert vendor-managed IT infrastructure. It may even turn out to be cheaper in the long run. One of the advantages is that the vendor will respond to questions or issues very rapidly. Reviews on TrustRadius indicate that the quality of support provided is top-notch.
Reviews on TrustRadius highlight uptime, excellent responsive service and support, and good documentation as strengths.
Read reviews of Rackspace Managed Hosting on TrustRadius.
Jelastic: Jelastic is a little different to DigitalOcean and Rackspace in that it can be installed on bare metal servers and is a combination platform. It is primarily known as a container-based Platform as a Service (PaaS), that is also capable of producing traditional IaaS capacity. Jelastic’s PaaS is designed to provide developers with a coding platform enabling high availability, automatic resource scalability, and pay-as-you-go pricing. It is well-suited to smaller organizations for whom AWS may be too complex and require too many technical resources.
It is best thought of as a container-based , multi-cloud platform designed specifically for DevOps and development teams. It is particularly popular with developers and DevOps teams as it eliminates most of the steps involved in setting up a platform and leaves developers free to concentrate on their own code.
Read reviews of Jelastic on TrustRadius.