Magic Quadrant for Cloud Infrastructure and Platform Services

Understanding the Vendor Profiles, Strengths and Cautions

CIPS providers that target enterprise and midmarket customers generally offer high-quality service, with excellent availability, good performance, high security and good customer support. Exceptions will be noted in this Magic Quadrant’s evaluations of individual providers. When we say “all providers,” we specifically mean “all the evaluated providers included in this Magic Quadrant,” not all CIPS providers in general. Keep the following in mind when reading the vendor profiles:

Amazon Web Services

Strengths

• AWS continues to have a commanding lead across many of the CIPS market’s critical dimensions, including total market share and capabilities of offerings. AWS has the largest share of the worldwide market in IaaS and database PaaS offerings.
• AWS has the skills, resources and motivation to vertically integrate and deliver solutions to customers end to end. The company can design everything from the silicon in its servers to the embedded OSs in edge devices and the complete stack of software in between.
• AWS is an exceedingly well-run business from a financial perspective and generates more than 50% of the operating income for all of Amazon. Unlike some of the other providers in this Magic Quadrant, AWS’s healthy margins stand to improve its parent.

Cautions

• The growing concerns about Amazon’s size and reach, coupled with AWS’s leadership position, give pause to some of its partners and customers. Furthermore, AWS risks alienating software developers, which are its core constituency, as a result of the company’s skirmishes with the open-source software (OSS) communities. Notably, a broad range of AWS offerings have benefited from OSS, without material contribution in kind by AWS.
• AWS has poor cohesion across its ever-expanding sets of offerings. The company’s leadership position in IaaS and dbPaaS creates a misleading halo effect for other offerings. The organizational design of AWS that allows its developers to operate as semiautonomous units creates inconsistencies among products, rather than a cohesive whole, particularly for new services. Furthermore, the effective use of AWS requires an application builder’s mindset and, when coupled with poor cohesion, can be daunting to many enterprises.
• Customers continue to believe incorrectly that AWS reduces prices broadly; however, the decreases are often not universally applied across all services. For example, the most frequently provisioned storage for AWS’s compute service has not experienced a price reduction since 2014, nearly half the life of the company, despite dramatically decreasing prices in the market for the raw components.

Google

Strengths

• Google’s open-source contributions, such as Kubernetes and TensorFlow, have been market-moving innovations that have changed the course of enterprise IT. Such innovations have served to enable other cloud service providers, but also brought developer “mind share” to Google Cloud Platform (GCP). Google’s long-term strategy is to bring additional open-source-focused partners into GCP as managed services.
• During the past year, GCP has experienced a noticeable increase in year-over-year market share in terms of IaaS and dbPaaS, albeit from a lower base, relative to other providers in this Magic Quadrant. Google has also made significant gains by closing a number of critical capability gaps between GCP and Microsoft Azure, its nearest competitor in terms of market share and capabilities.
• Gartner clients continue to associate GCP with its big data and data science capabilities, stemming from the use of services such BigQuery and Dataproc. However, the company is pressing into new territory with Anthos, GCP’s container and Kubernetes-based middleware layer, which is designed to support the development and deployment of cloud applications in a hybrid and multicloud model.

Cautions

• Some of Gartner’s clients remain cautious about Google’s commitment to serving the needs of enterprise clients when put in the context of SAP’s preference for Microsoft Azure, and GCP’s slowness in executing on some highly touted partnerships. GCP lacks enterprise-focused aPaaS capabilities and support for Oracle, and it continues to struggle with having an enterprise mindset in the field.
• From a financial perspective, GCP’s revenue is a small fraction of overall Google revenue and GCP’s criticality to the overall business is not as clear as its competitors. Furthermore, GCP’s success may erode the company’s overall healthy gross margins.
• Google’s much-vaunted network capabilities have been the source of a number of GCP outages during the last year, with devastating impact on customers. One outage was multiregional in scope, affecting GCP customers and Google consumer services, such as G Suite and YouTube. This resulted in complete GCP network unavailability for some customers.

Microsoft

Strengths

• Microsoft Azure offers a complete end-to-end set of solutions related to a broad range of workloads and applications. This is evident from Microsoft Azure’s partnerships with Oracle, SAP and VMware, continues with Azure’s capabilities with respect to containers and serverless, and ends with compelling solutions for the edge and hybrid environments.
• Microsoft is making a concerted effort to better serve software developers, particularly through its efforts with OSS. Microsoft leads the hyperscale cloud providers in terms of market share in the application developer PaaS segment with its suite of tools that include Azure DevOps and Github. Microsoft’s Visual Studio Codespaces, which is currently in beta, is the first compelling cloud-hosted application developer environment that bridges use of public cloud and ultrapopular developer tooling, such as Visual Studio Code.
• Mainstream enterprises often have strategic alignment with Microsoft, giving Azure significant sales advantages in this segment of the market. Furthermore, Microsoft Azure has particularly strong mind share with Gartner’s enterprise clients in Europe.

Cautions

• Microsoft has the lowest ratio of availability zones to regions of any vendor in this Magic Quadrant, and a limited set of services support the availability zone model. As a result, Gartner continues to have concerns related to the overall architecture and implementation of Azure, despite resilience-focused engineering efforts and improved service availability metrics during the past year.
• Microsoft does not provide any form of guaranteed capacity to customers; even prepaid agreements and reserved instances are not capacity guarantees. When there were COVID-19-related customer-affecting capacity shortfalls in multiple European regions over a multiweek period, a small number of customers were unable to provision reserved instances or capacity for which they had already paid.
• Microsoft’s Unified Support can be very expensive, especially for those customers who have not historically had support services covering their entire Microsoft portfolio. Although Microsoft field sales technical competence has improved during the past year, and Microsoft is improving Azure technical support, Gartner clients continue to report concerns with the quality of these experiences.

IBM

Strengths

• IBM Cloud differentiates itself from the other hyperscale providers by leveraging its extensive history with the Power Systems family of compute infrastructure. This supports workloads as diverse as SAP HANA, Oracle ERP and newer styles, such as those focused on deep learning. Furthermore, IBM Cloud has significantly improved overall VM provisioning times and control plane improvements.
• IBM Services acts as a built-in channel and MSP for enterprises on IBM Cloud, which distinguishes it from other cloud providers that rely on third parties. IBM, as one company, is able to provide enterprises with transformational services to become more agile and the cloud infrastructure in which to deploy their agile workloads.
• IBM has transitioned to messaging around hybrid and multicloud computing. It offers capabilities and tooling to enterprises, allowing them to choose the cloud environment best for their specific application requirements, positioning IBM Cloud as a niche or specialty offering during the selection process.

Cautions

• IBM Cloud remains a complex platform resulting from legacy offerings and uneven product development gains. Although IBM launched Gen 2 infrastructure in 2019, the new IaaS offering contains a subset of the capabilities of SoftLayer, and is only available in five countries. Notably, IBM was 10 years late to market with cloud software-defined networking (SDN) capabilities. It continues to lack broad platform support for identity and access management (IAM), despite promoting innovative efforts for the financial services sector.
• IBM promotes a hybrid cloud narrative using OpenShift as a common substrate that allows portability among cloud providers or otherwise disparate environments. However, this approach will result in limited enterprise benefits, because it requires generic use of cloud provider features.
• IBM Cloud has negligible worldwide market share in the application PaaS category. Some of IBM’s aPaaS offerings, such as IBM Cloud Functions, have scant adoption, which reflects the company’s diminishing mind share among developers who perceive IBM as a provider of legacy technologies. Furthermore, some of IBM Cloud’s efforts to court software developers through open-source initiatives have yet to produce results.

Oracle

Strengths

• Oracle has demonstrated its commitment to the market with a significantly increased worldwide presence during the past year in terms of OCI regions served with a single availability zone and new PaaS capabilities. Oracle continues to expand its cloud services into regions such as the Middle East where a significant number of clients are already customers of other Oracle products. Notably, OCI is the only hyperscale cloud platform in this Magic Quadrant with a data center in Saudi Arabia, due to a challenging political climate that prevents others from entering.
• Oracle is distinguished among most companies of its lineage in that it has developed thoughtfully architected, hyperscale cloud architectures that are competitive with the more-established cloud providers. OCI has made substantial year-over-year gains related to required IaaS and PaaS capabilities, as defined by Gartner. Furthermore, Oracle delivers all capabilities simultaneously into all regions worldwide, unlike its competitors.
• A growing number of Gartner clients are evaluating the prospect of deploying Oracle Dedicated Region Cloud@Customer, a compelling on-premises cloud solution that has complete feature parity with OCI. Customers also frequently consider deploying Oracle EBS using public cloud IaaS, and OCI naturally lands at the top of the list. Most customers have needs that extend beyond EBS, and Oracle is able to introduce partner offerings from Microsoft Azure in these cases.

Cautions

• Most Gartner clients interested in the OCI partnership with Microsoft Azure are intent on limiting adoption of OCI services, favoring Azure as the strategic choice in the equation. Some of this is due to an unfounded perception of OCI’s viability, and others result from negative experiences with Oracle in general.
• A number of modern, PaaS-layer capabilities now offered by OCI, such as FaaS, may not see immediate adoption in the typical OCI customer base. Despite OCI’s year-over-year gains in offering such capabilities, customers should view some of these gains as being nascent until a reasonable number of Oracle’s customers adopt the capabilities, which may never happen.
• Oracle has relatively low market share in the public cloud dbPaaS segment, which is particularly significant for a company with a history tied to its database offerings.

Fonts: @gartner

https://www.gartner.com/doc/reprints?id=1-1ZDZDMTF&ct=200703&st=sb