The Unstoppable Growth of IaaS: Opportunities for Resellers

151
Structures for success

As more business is conducted via the cloud, demand for Infrastructure as a Service is growing rapidly – and this is set to continue, which provides plenty of opportunities for resellers.

Infrastructure as a Service (IaaS) is enjoying rapid growth – set to be 20.4% this year, according to analysts Gartner – as more and more business is conducted online.

“As we move rapidly to a service-based society where connectivity and access to real-time data becomes a fundamental part of everyday life, businesses need to have an infrastructure spine that has the agility and cost effectiveness to serve as an enabler to support the business goals and keep the business relevant,” says Paul Warburton, chief digital and marketing officer at NSC. 

“The cloud has already transitioned beyond merely disrupting technology; it’s now reshaping entire business landscapes. IaaS is driving the expansion of Software as a Service (SaaS) and Platform as a Service as businesses consistently migrate more applications to the cloud and revamp existing ones for modernisation.

“The demand for true IaaS has been steadily growing due to its cost-effectiveness, scalability and agility. IaaS provides great flexibility to organisations that want ready-to-use infrastructure and pay as per usage. 

“IaaS enables businesses to scale their infrastructure up or down in response to changing demand. This flexibility allows companies to allocate their resources more efficiently, focusing solely on their core competencies and strategic initiatives.”

Embracing technology

Sam Woodcock, senior director of cloud strategy at 11:11 Systems, agrees, adding that flexibility is one of several reasons why companies are embracing IaaS. “As companies adapt and adopt new technologies, they need to implement IaaS solutions which are agile and flexible, able to adapt to meet their changing needs,” he says. 

“IaaS provides the flexibility to grow beyond borders into different geographic environments without the need for heavy investment in technology infrastructure or skills as the company aims to establish its business. This not only has significant cost-saving benefits but also saves significant time as companies can seamlessly and quickly move into the cloud.

“IaaS offers cost-saving benefits as it does not require upfront investment into on-premise sites. At the same time, it saves costs on sourcing the necessary skills to deploy and manage on-premises solutions. This cost-optimisation is a huge draw card for companies and is particularly beneficial when fees are predictable, and companies can budget accordingly.

“By opting for IaaS, companies enjoy several platform benefits such as added security, improved performance, added storage capabilities and more that have a knock-on effect on improving the overall customer experience. 

“These solutions can be included to meet each company’s specific requirements and, in many cases, can improve overall security and compliance as cloud providers have an extensive understanding of these issues and can deliver compliance requirements across industries, often improving the level of compliance in organisations in other industries. For example, companies that do not operate in the financial industry, which exercises stringent regulations, would benefit from the cloud service providers’ knowledge and expertise in this area and these solutions will deliver a high level of compliance across all industries and at no additional cost to the company.

“Those that do not opt for IaaS need to employ teams of people to manage the compute infrastructure, networking, storage, backup, DR, software licencing and more. This limits their ability to innovate and develop new services and solutions as they are focused on infrastructure, which should provide a means to get to the end goal sooner rather than be a stumbling block.”

Andy Brown, technical services director, UK, TD SYNNEX, adds that the growth in demand for IaaS is a major contributor to the overall growth in cloud services. “It has a strong appeal to organisations of all sizes as it means that, instead of purchasing a sufficient amount of compute and storage hardware to cope with it on-premise, they can make use of IaaS to manage the peaks of demand. 

“We are now seeing a more considered approach to the placement of workloads driving a ‘hybrid-first’ approach. Gone are the days when the first assumption was that any new workload would be placed put into a public cloud. Instead, we are now seeing the decision made in a workload-by-workload basis with all the relative factors – including performance, flexibility and cost – of on-premise’, hybrid and public cloud being assessed before a decision is made.”

Tom Lovell, CTO at Infinity Group, adds that IaaS can also give businesses affordable backup. “Through IaaS, disaster recovery, and business continuity solutions are available for businesses of all sizes,” he says. “This enhances online infrastructure reliability. IaaS eliminates the need for software and hardware maintenance, as well as troubleshooting. Furthermore, IaaS allows you to access applications as usual during a disaster outage, maintaining security for your applications and data that couldn’t be attained in-house.”

Changing demands

But as IaaS’ popularity continues to grow, what customers are demanding from solutions is evolving too.

For instance, Tom says that customers are looking for greater integration and management solutions that help them control and monitor their cloud resources. “Many find that without integral control, costs can rapidly spiral and organisations are looking to IaaS as a means of reducing overall expenditure,” he says. “With increased awareness of cybersecurity risks comes an increased desire for enhanced security and compliance tools that help alignment with regulatory standards.”

Paul adds that demand for true consumption-based models that are vendor agnostic and can be accounted for as an off-balance sheet service rather than an asset is increasing too. “It is increasingly the CFO who defines the commercial construct of the service and with that change the engagement approach with OEM’s and service partners,” he says.

He adds that technological advances, coupled with evolving businesses means demands for IaaS are undergoing a significant shift. “The evolving demands for IaaS underscore a fundamental shift towards holistic solutions that not only meet immediate infrastructure needs but also align with broader business objectives, security imperatives, technological aspirations and environmental responsibilities,” he says.

“Additionally, IaaS fosters rapid innovation by providing access to a range of infrastructure resources. Advanced capabilities within IaaS, such as artificial intelligence (AI), machine learning, Internet of Things, blockchain and edge computing are empowering businesses to innovate, and bring products and services to market faster, staying ahead of the competition.

“Finally, sustainability has emerged as a critical factor for customers assessing IaaS providers. With an increased consciousness of environmental impact, businesses are looking to providers that prioritise energy efficiency, renewable energy sources, carbon neutrality and transparent reporting on environmental initiatives.”

Cloud, on-premise or hybrid

With the evolution of IaaS, customers have to decide whether they want cloud, on-premise or hybrid solutions. As Paul notes, the choice between these solutions depends on several factors such as data sensitivity, regulatory requirements, cost considerations, scalability needs and IT expertise. 

“Many businesses are adopting a hybrid approach to strike a balance between flexibility, control and cost-effectiveness,” he says. “As mentioned previously, another critical factor is the financial treatment the solution will require.

“SMBs and startups are increasingly favouring cloud solutions due to their scalability, cost-effectiveness and ease of management. Conversely, large enterprises with extensive legacy systems, and often strict compliance requirements tend to opt for on-premises solutions. 

“However, hybrid solutions have gained traction over the past decade or so as it offers a middle ground for businesses seeking to leverage the benefits of both deployment models.”

Tom adds that in Infinity Group’s experience customers are increasingly adopting a cloud first approach to new solutions while looking towards the hybrid model to enhance or extend legacy on-premises solutions. “Such needs must be balanced against a range of metrics, such as budget and security demands, but on-premises solutions rarely provide facilities customers require for their workloads or working practices,” he says.

Reseller challenges

With IaaS evolving and many options available, it poses challenges for resellers. “The challenge that many resellers face is in talking to customers about the myriad options available, and which of those might be best suited to their needs,” says Andy. “We’re fortunate in that TD SYNNEX represent all three major hyperscalers – AWS, Microsoft (with Azure) and Google – and we have dedicated teams for each. That means we can provide trusted advice and support on all the main options available – plus several others – and can work with partners to identify what’s right for their customers.

“Another challenge for reseller partners is having the skills and resources on hand to configure, deploy and manage IaaS. Here again, we can provide the support partners need through our professional services team. Finally, there is a need to monitor and manage usage and billing, for which our partners can use our StreamOne Ion platform.”

Paul adds that businesses should seek resellers that offer data centres in multiple geographic regions, enabling businesses to deploy their applications and services closer to their customers. “This not only improves performance but also reduces latency, enhancing the overall user experience,” he says.

“It’s also important to have comprehensive support and management services. Outsourcing infrastructure management should enable businesses to concentrate on core activities while entrusting technical aspects to experts. Therefore, 24/7 technical support, monitoring, and troubleshooting are essential.”

Focus on customer goals

Meanwhile Sam recommends three key points for resellers to emphasise to customers when selling IaaS solutions. “Firstly, focus the customer on what they want to achieve,” he says. “Sometimes companies opt for technology solutions in isolation of the business objectives and backtrack to make the technology match up to the business needs. Rather companies should focus on what the business needs and understand the budget before implementing IaaS.

“Once the customer knows what the business wants to achieve, the next step is to marry up the time complexity with the associated costs and identify which options are available in the market to help meet these objectives within the defined budget and timeframe.

“Companies must have a list of core requirements for the platform that they need and spend time during the pre-sales process to assess the criteria against the options available on the market. It is also important that they look at data protection and determine if there are other solutions that they want to build in or additional requirements that they would like the solution to meet. It is valuable to understand the security requirements and whether the solution meets the industry or even the company’s requirements. 

“Finally, they need to evaluate the costs and determine if there are additional costs that they weren’t aware of, did not think about or confirm that it is a predictable price that can be budgeted for.”

Tom adds that resellers should emphasise that IaaS offers far beyond just a substitute location for hosting resources with a distinct cost structure. “It enables swift market entry by leveraging scalability and rapid deployment features,” he says. “Additionally, automation streamlines and fortifies business continuity and disaster recovery processes while eradicating repetitive manual tasks. IaaS integration capabilities also extend to existing systems, SaaS platforms and myriad other solutions.”

Future

IaaS is predicted to keep on growing over the next decade. The global market was valued at more than $130 billion in 2023 and is predicted to exceed $738 billion by 2032, according to Fortune Business Insights, Tom notes, which means there are plenty of opportunities for resellers now and in the future.

“The emergence of distributed cloud technology, extending services to the edge, presents new opportunities for optimising deployments and enhancing performance, especially for latency-sensitive applications,” he adds. “Multi-cloud management platforms will be critical for this evolution, ensuring seamless integration across diverse cloud providers and locations.

“Furthermore, the growing emphasis on security and privacy in cloud computing, underscored by regulatory requirements, will continue to drive the adoption of custom security policies.”

Paul agrees that IaaS will continue to grow, saying that it will be as a true consumption-based vendor agnostic service that supports the needs of the CFO while enabling the business to remain relevant now and in the future. “Understanding the user experiences the business needs to support in the future is increasingly shaping the requirements of today and driving true digital transformation,” he says.

“Cost control and meeting bandwidth needs remain fundamental considerations in which IaaS excels, offering proven solutions for these challenges.

“As applications become more data-intensive and latency-sensitive, customers will continue to need high-performance and reliable infrastructures to ensure uninterrupted service delivery.”

Sam adds that the seismic shift in the use of AI, which needs huge computing power, is likely to drive further adoption of IaaS. “This is because IaaS meets the power demand, providing an agile solution that offers high performance when necessary, reacting to specific factors and requirements and then tapering down when not needed,” he says.

“Further adoption of SaaS solutions will also play a role in cloud adoption as companies realise the benefits of a vast array of solutions available that aid in improving business processes.

“Finally, the IaaS industry has experienced widespread changes that are making companies re-evaluate their approach to IaaS and determine which option is best to meet their specific needs whether on-premises, cloud or a combination of both.”