ISG Provider Lens™ Infrastructure & Data Center / Private Cloud Quadrant Report 2018: Managed Services and Transformation - Global
The way enterprises outsource data center monitoring, management and transformation services has evolved rapidly over the last few years. The rise of on-demand and elastic infrastructure models have fueled new expectations and end users now expect a similar experience within their organizations. As businesses increasingly become digital or software- and data-driven, they need an infrastructure base that is adaptive to changing market conditions, can be easily managed and is always available. Accordingly, most data center outsourcing engagements today have elements of private and hybrid cloud enablement. Managed hosting and colocation providers have also realized the importance of the cloud ecosystem. They are adapting their business models to insert themselves as key parts of the process and adjusting accordingly. Key trends in the data center outsourcing space are:
Managed services are moving towards industrialized service delivery models: Our research found that the data center managed services market is increasingly moving towards an industrialized service delivery and consumption-based pricing model. Industrialized services drive cost and efficiency improvements through a set of repeatable and scalable processes that are applicable across several buyer organizations.
Hybrid IT is the norm across buyer organizations: Enterprise buyers are taking an application-centric view to infrastructure operations and are distributing their application portfolios across traditional environments, on-premises private clouds, hosted private clouds, colocation facilities and public cloud infrastructure. To support this diversity, service providers have changed their services and solutions portfolios to provide comprehensive visibility into hybrid infrastructure operations.
Automation is a common theme across service providers, large and small: Almost all service providers already have an automation strategy in place that either revolves around tools developed in-house or around an integrated set of best-of-breed third-party technologies that are branded under the company’s portfolio of infrastructure services.
Forward-looking service providers are developing expertise in software-defined technologies: Software-defined setups are aimed at supporting DevOps practices such as continuous integration and continuous delivery (CI/CD). The ultimate goal is faster time-to-market, particularly for client-facing web-based applications. Some of the larger service providers are differentiating themselves through proprietary solutions and technology vendor certifications.
Managed hosting holds its ground by providing cloud-like experiences: The traditional managed hosting market is evolving to provide server environments in a self-service fashion with shorter contract terms. Several managed hosting providers are also increasing the breadth of their service portfolios above the OS layer to provide managed services support for enterprise applications such as ERP packages.
Colocation providers are serving as gateways to the public cloud: Colocation services providers are increasingly becoming the key connection points for various elements of their client’s hybrid IT environments. Most colocation providers have advanced their interconnection services and now provide direct, low-latency links to the major hyperscale public cloud providers. The colocation space has consolidated in recent times and the top four or five players command a significant portion of the overall market share.