Gartner: 'Sky not falling' in consolidating IaaS market

Analyst says massive change is afoot as competitive landscape shifts

Gartner has warned buyers to be "extremely cautious" when buying infrastructure-as-a-service (IaaS) technology as the market consolidates, but insists the "sky is not falling" in the market.

According to the analyst's predictions, global spending on IaaS will reach $16.5bn (£10.6bn) this year, up 32.8 per cent annually. Between 2014 and 2019, the market's compound annual growth rate is forecast for 29.1 per cent.

The vendor said the market is "rapidly consolidating around a small number of market leaders", which analyst Lydia Leong said is something customers ought to acknowledge.

"The sky is not falling – customers are getting great value out of cloud IaaS – but the competitive landscape is shifting," she said. "Few providers have the financial resources to invest in being broadly competitive in the cloud IaaS market.

"We urge buyers to be extremely cautious when selecting providers; ask specific and detailed questions about the provider's road map 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."

Gartner said last year was a significant one for the IaaS market.

"2014 was a year of reckoning for many cloud IaaS providers, and many believe that their current strategy is failing them," the analyst said.

"Some providers intend to launch an entirely new cloud IaaS platform, make substantial changes to their current platform or move to providing managed services on leading cloud IaaS platforms. Many providers have indicated that they intend to discontinue or significantly reduce their investment in their cloud IaaS offerings, and others intend to eliminate or replace them."