ChannelLife NZ - IT budgets focus on cloud services, creating opportunity for vendors and MSPs

ThinkstockPhotos-122398280_1.jpg

IT budgets focus on cloud services, creating opportunity for vendors and MSPs

IT expenditure on hosting and cloud services is climbing, with new figures from 452 Research showing spending from total enterprise IT budgets is set to reach 34%, up from 28% today.

This creates a strong opportunity for service providers, as the markets for unmanaged IaaS and SaaS are dominated by large, hyper-scale vendors.

According to the Voice of the Enterprise: Hosting and Cloud Managed Services study, the increase in total budget spend indicates a growing reliance on external sources of infrastructure, application, management and security services.

The study says that although hosting and cloud providers frequently position themselves as primarily providers of infrastructure, 451 Research finds that just 31% of spending goes towards infrastructure services while nearly 70% of enterprise budgets for hosting and cloud is being spent on other services, specifically: 

  • 42% on Application Services;
  • 14% on Managed Services;
  • 9% on Security Services; and
  • 5% on Professional Services for cloud enablement.

The research reveals that a significant portion of hosting and cloud services spending is on unmanaged or self-managed infrastructure or application services, 452 Research says.

Nearly half—44% of infrastructure services spending and 49% of application services spending—is for products that are bundled with additional managed or security services.

“The markets for unmanaged IaaS and SaaS are dominated by large, hyper-scale vendors,” says Liam Eagle, research manager at 451 Research and lead author of the report.

“However, this spending trend indicates there is an appetite for the type of bundled services a broader market of managed service providers are well positioned to deliver,” he explains

“A strong opportunity exists for service providers offering a diversified set of hosting and cloud services that includes infrastructure and application hosting, as well as managed services and security services delivered around them,” Eagle says.

According to Eagle, the survey indicates that enterprises use hosting and cloud services supplied by a broad range of provider types.

Public cloud infrastructure providers, which are used by 69% of respondents, are the most common, followed by managed hosting providers, used by 26% of enterprises.

The study shows IaaS and SaaS usage is strong and these markets are dominated by small numbers of established leaders.

“The market for managed infrastructure and application services is a longer tail market, with greater opportunities for providers who emphasise expertise in operating, optimising and securing the infrastructure and application products they deliver,” says Eagle.

“This includes opportunities to deliver services based on reselling infrastructure and application services from the largest IaaS and SaaS vendors,” he says.

Interested in this topic?
We can put you in touch with an expert.

Follow Us

Featured

next-story-thumb Scroll down to read: