As most of us know, the cloud and hosting business requires significant and ongoing capital investment. So it’s critical to understand where new revenue opportunities await to support those expenses. Having spent 20 years managing products and services for service providers, I know full well that uncovering those elusive new growth areas is a challenge.
While we read in analyst reports that cloud is expected to see 5X more growth than traditional IT,we are also reading that only 32% of enterprise applications have been or are able to be deployed in shared cloud platforms. So where then, exactly, is this 5X growth coming from, and what kind of applications comprise the best near-term opportunities for service providers?
The reality is that no one knows for sure. There’s no Magic 8 Ball to accurately predict growth. So many service providers are forced to take calculated risks and place bets on what they believe is the next area of growth for them.
Many bets made by our most successful service provider partners have been based on growth coming from production applications that have previously resided only behind the corporate firewall (i.e., the other 68% of enterprise applications). Security, performance, cost, and stability fears have kept these applications in-house. Yet as enterprise customers get more comfortable with outsourcing to the cloud, they seek ways to make moving beyond test/dev and simple web hosting to databases, ERP/CRM, big data, and VDI more of a strategic imperative. BUT… the catch is that they want it all delivered as if they were contracting for the performance and predictability of fully dedicated equipment, at shared prices.
Winning service providers are already ahead of the curve and are reaping the benefits of delivering on these requirements. Betting that the next area of growth will come from production applications with specific performance requirements, these service providers offer within their storage infrastructure these next-generation features:
- Flash to deliver the IOPS needed by production enterprise apps
- Quality of Service (QoS) with SLAs to guarantee that performance
- Vertical, application, or workload-specific solution sets to cater to distinct needs
- API access to all platform resources
This whitepaper provides more detail about where the enterprise application revenue opportunities lie. Take a look and then start placing your bet!