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Two IaaS solutions lead the market, is that all it takes?

If someone said 10 years ago that IT infrastructure would be hosted off premise and used like a complete system, let alone supported by Amazon, many IT professionals would had scoffed at the complexity of such an idea. However, since Amazon Web Services launched in 2006, enterprises of all sizes and from all industries have turned to cloud computing.

The love of IaaS
According to Gartner, its 2015 CIO survey found that 83 percent of CIOs consider cloud IaaS as an infrastructure option, while 10 percent took the cloud-first approach, using hosted infrastructure as their default choice of IT environment. The decision is no longer about whether IaaS is valuable. Now, businesses are asking themselves how to best utilize hosted hardware, mainly because cloud IaaS has so many use cases.

"83% of CIOs consider cloud IaaS as an infrastructure option, while 10% use hosted IaaS as their IT environment."

The most common reasons for implementing a cloud IaaS solution are development and testing, high-performance computing and batch processing, supporting Internet-facing websites and Web-based applications and non-mission-critical internal business applications, Gartner noted. In many ways, this is good for the IaaS market. For one, different cloud providers can support a vast array of business needs, but these IaaS solutions also have a variety of pricing schemes, making them ideal for organizations that are both large and small. Furthermore, the amount of investment into the cloud also impacts the value acquired from IaaS solutions.

"Cloud IaaS can now be used to run most workloads, although not every provider can run every type of workload well," said Lydia Leong, vice president and distinguished analyst at Gartner. "Cloud IaaS is not a commodity. Providers vary significantly in their features, performance, cost and business terms. Although in theory, cloud IaaS has very little lock-in, in truth, cloud IaaS is not merely a matter of hardware rental, but an entire data center ecosystem as a service. The more you use its management capabilities, the more value you will receive from the offering, but the more you will be tied to that particular service offering."

Too many cooks in the kitchen
Now that IaaS solutions are ubiquitous, the market itself is experiencing a state of upheaval, according to Gartner. Many IaaS providers are struggling to remain relevant in an industry full of alternatives that is predicted by Gartner to reach almost $16.5 billion in 2015 alone. That signifies an increase of almost 33 percent from 2014, and with a compound annual growth rate of  29 percent between 2014 and 2019, the IaaS market will rapidly consolidate leaving a few leaders, the source noted.

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

In regard to those few leaders, AWS domination is well known. Not only did AWS rank No. 1 out of 14 other IaaS providers in Gartner's new "Magic Quadrant for Cloud Infrastructure as a Service, Worldwide" report, but InformationWeek reported that AWS have 10 times the cloud server capacity of those other 14 firms combined - a group comprised of Microsoft, IBM and Google, to name a few.

However, Microsoft Azure came in second place in Gartner's rankings. This IaaS solution has largely flown under the radar compared to its competition, but it still remains the go-to choice for businesses already familiar with Microsoft hardware, software and services. In addition, The Platform reported on a few of the ways that Microsoft is beefing up its Azure public cloud offerings. According to the source, Azure has a slew of new capabilities, but most notably, Azure will offer containerization tools which will help IT professionals deploy and manage virtual machines more easily.

Bimodel IT strategies are perfect for the cloud, as businesses can use both AWS and Azure for each of the required modes.Bimodel IT strategies are perfect for the cloud, as businesses can use both AWS and Azure for each of the required modes.

Bimodel, multicloud or hybrid?
With AWS IaaS acting as an industry leading standard, that doesn't mean that businesses should discount the value of implementing Azure instances in their cloud environments. After all, the multicloud is a burgeoning trend in which organizations use as many cloud services as they need to optimize operations, improve employee performance, and deliver products or services to clients and customers. Using both AWS and Azure in that sense seems logical.

A multicloud environment supporting both AWS and Azure would also assist businesses leveraging what Gartner refers to as "bimodel IT." This strategy encompasses two modes of IT. Mode 1 is dedicated to traditional enterprise IT, emphasizing scalability, efficiency and security, while Mode 2 focuses on agility and speed. Simply put, bimodel IT means that half of IT operations focus on keeping the business function and the rest improves the company by optimizing applications and creating new ones.

The bimodel IT approach is perfect for AWS and Azure. Businesses can use the former as a playground for testing and development - Mode 2 - while the latter provides all the necessary applications and supporting infrastructure. After all, AWS instances are blank slates, and Azure is more akin to a collection of cloud services.

As Barron's asserted, most existing applications are written and optimized for Windows, while competitors might require those programs to be rewritten to function in the cloud. AWS plays better with Linux, only supporting the fact that each cloud solution has its place in hybrid environments. The familiarity with Microsoft can allow business to work quickly while stable, and AWS is a great place to experiment with new applications, tools and technologies.

"With a reliance on AWS and Azure, businesses will need to directly connect to hosted infrastructure."

The best multicloud approach
All signs point to a future when organizations are increasingly reliant of IaaS for mission-critical applications, and by working in the cloud now, when that day comes IT professionals will be ready. The question is whether their corporate networks are up for the challenge.

With such a reliance on AWS and Azure, businesses will need to directly connect to hosted infrastructure and services to essentially make those environments just another part of the corporate network. This will also improve security, as the public Internet is taken completely out of the public cloud picture. Direct connections will be in high demand very soon if Gartner's IaaS market predictions pan out.

At the end of the day, if AWS and Azure become the only two IaaS solution providers, businesses will not be upset. Using two cloud services could actually support organizations as they strive to take advantage of the cloud. The only downside on this reliance would be Internet connects - a problem that services such as Direct Connect were made to solve.

John Grady is a Senior Product Marketing Manager at XO Communications, who is responsible for marketing the XO Cloud and XO Connect product portfolios. John has been responsible for launching a number of products at XO Communications, including 100G service, new cloud offerings, and XO's Intelligent WAN solution.