Managed Private Cloud on the Rise as Data Center Outsourcing Service
IT infrastructure as utility is here, and it’s eating traditional outsourcing services’ lunch
![Managed Private Cloud on the Rise as Data Center Outsourcing Service Managed Private Cloud on the Rise as Data Center Outsourcing Service](https://eu-images.contentstack.com/v3/assets/blt8eb3cdfc1fce5194/blt2388d58e4a4c182b/66210d32fc3ecb8241d8ee9e/Rittal-data-center-module-Getty.jpg?width=1280&auto=webp&quality=95&format=jpg&disable=upscale)
Managed virtual private cloud services are gaining popularity as part of data center outsourcing contracts enterprises make with the likes of IBM, HP, or Dell.
That’s according to the market research firm Gartner, which published its annual Magic Quadrant report on the North American data center outsourcing market published late last month.
Gartner puts managed private cloud in the category of “Infrastructure Utility Services,” or services that companies pay for based on resource usage or number of users served. “Increasingly, IUS are based on managed virtual private cloud services,” the report read.
Industrialized infrastructure services are what is going to drive future growth in the data center services market in general, according to the analysts. That growth will come at the expense of growth and margins for traditional services, which Gartner expects to face further pressure.
This category of services includes both Infrastructure-as-a-Service and Platform-as-a-Service.
IBM and HP remained top data center outsourcing providers on the latest Magic Quadrant for North America, ahead of everyone else in terms of both vision and execution. Other providers Gartner named leaders were Dell, HCL Technologies, and CSC.
Here’s Gartner’s 2015 Magic Quadrant for Data Center Outsourcing in North America:
While it named HP one of the leaders in the category, Gartner estimated that its data center outsourcing and infrastructure utility services revenue in 2014 was down about 5 percent from the prior year.
HP’s key strengths in the outsourcing market are its infrastructure scale – close to 80,000 physical servers across about 30 data centers – its ability to provide just about every kind of data center outsourcing service imaginable, and strong management and budget oversight in service engagements.
While a leader in every other respect, however, HP’s cloud services haven’t done as well as the company may have hoped, according to Gartner. HP says its managed cloud server offering called Helion has seen double-digit growth, but the penetration of its virtual private cloud, utility, or managed private cloud offerings remains below 15 percent, according to the analysts.
HP’s rival IBM is the largest player in the market for both cloud and traditional enterprise data centers. Gartner estimates that Big Blue makes about $3 billion in annual sales on its data center outsourcing services.
Its main strengths are focusing on solving specific business issues for clients rather than simply providing standard technology and support services, breadth and depth of resources, and willingness to switch to new service models.
One of Gartner’s cautions about IBM was the potential for impact on existing interfaces and processes of the company’s recent restructuring, which included melding of its former Strategic Outsourcing and Integrated Technology Services. The new unit, called Infrastructure Services, combines everything from networking to mobility.
IBM’s Global Technology Services segment, which includes Infrastructure Services, lost more than $1 billion in revenue in 2014, according to Gartner’s estimates. The analysts attributed this loss to new and emerging providers in the market who are agile and extremely competitive.
Gartner said IBM needs to review its strategy and be more open to enabling its clients to use competitors’ cloud services, such as AWS and Azure, as opposed to driving them squarely to its own SoftLayer cloud.
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