ISG Provider Lens™ Private/Hybrid Cloud - Data Center Services & Solutions - Global 2019 - Managed Containers as a Service

Digital transformations are unfolding in enterprise businesses on a massive scale, with private/hybrid cloud solutions and services becoming an integral central ecosystem of transformation services. In this digital race, enterprises are rapidly evolving their outsourcing engagements and transformations in IT managed services to bring a strategic balance among stakeholders. As businesses are becoming software and data-driven, they need an infrastructure base that can adapt to the changing market conditions, can be managed in an augmented model, and should be always accessible. Most data center outsourcing engagements now have elements of private/hybrid cloud and intuitive cloud management cognitive platforms enablement. With data becoming distributed, managed digital security services have become necessary for enterprises on a data and infrastructure front. Hence, they seek strategic cyber security managed service providers. The evolution of containers (microservices) has raised a need to manage the container’s cluster and its optimization to ensure that the enterprise spends on actual consumption. Strategic decision-making on technologies is the driving force of the entire exercise, along with altering the workplace ecosystem and changing the way in which an enterprise operates. This, in turn, has led to the emergence of IT managed services, hybrid cloud management platforms, digital managed security services, private and hybrid clouds and managed container cluster services.

Some of the key trends in the private/hybrid cloud and data center services space are below:

Increase in investments on cloud infrastructure (trap value and incremental value): From a commodity and innovation standpoint, budgets for cloud computing have doubled down in the past few years. The fundamental nature of cloud and hybrid cloud computing eliminates or minimizes hardware infrastructure, resulting in huge savings. However, cloud technology and services are not always simple. Organizations are realizing that they need expertise in capitalizing their investments to gain the immense benefits of the technology. They must be patient to see the revenue realization from a trap-value aspect. It is important for enterprises to craft their strategies clearly and let the execution progress to see the ROI sooner. In principal, they should consciously craft their strategies from trap value and incremental value standpoints.

Hyper converged infrastructure (HCI) kicking into hyperactive mode: The convergence of software-defined anything (SDx/hardware and software), which includes computation, networking, and storage, in a single easy-to-use system has enabled a true digital transformation. Enterprises see HCI as cloud coming to them rather than the other way around. Agile implementation and the ability of its intelligent inbuilt software to act on events have indicated a high possibility of expanding in-house cloud. Software-defined infrastructure has shown tremendous results, due to which the implementation of HCIs has grown more than 100 percent over the year. This also falls in line with the growing data center consolidation trend and the development of smart ROBO. Several enterprises want to consolidate and merge their infrastructure and keep only a few data centers across strategic global locations. Few service providers are showcasing their ability to consolidate and modernize data centers by getting design certifications from prominent HCI vendors, such as VMware, to gain a competitive edge.

AI Ops one-touch and zero-touch IT operation: Artificial intelligence for IT operations (AIOps) is primarily used to automate monotonous and commoditized IT infrastructure and software maintenance tasks, essentially to eliminate labor-intensive intervention on mundane tasks. However, we believe that it is more about building an augmented intelligence operation ecosystem that leverages an AI-based platform. We also see a shift in organizations adopting the AIOps model to enable them beyond automation. This would mainly take place in a model where data is fed into an AI platform that would analyze the pattern behavior and trigger a workflow for event resolution. The AI Ops platform performs three key roles, namely co-relation, machine learning (ML) and visualization. It also feeds the leadership dashboard with end-user experience, prediction and capacity management.

Managed services shifting to outcome-based services: Cutting-edge technology offers the benefit of quantifying results in a real-time scenario. Taking note of this, global enterprises are pursuing outcome-based services and are shifting away from the servicelevel agreements (SLAs). Service providers are required to meet their legal obligations of implementing AIOps, cognitive management platforms and advanced analytics. In 2018, several providers had moved away from staff augmentation-led transition services and had opted for an outcome-based model, giving them a competitive edge over peers.

Container technology gaining significant traction: In the last couple of years, container technology has grown in popularity with Kubernetes being the most prominent container orchestration system. This open-source container management tool has a high acceptance rate and has been growing exponentially. Container technology has been impactful, especially in mission-critical applications in financial, media and communications, and educational institutions. Several multi-player online gaming companies are using containers to deploy their updates with ease to achieve a faster streaming speed that elevates user experience. Service providers have strategically partnered with Kubernetes to provide managed containers as a service (CaaS) and are re-skilling/up-skilling their employees in this technology,

Move toward SaaS-based cyber infrastructure security solutions: As data is becoming more distributed, enterprises are seeking robust global digital security solutions and services. To address the needs of clients, large service providers and some smart startups (cloud native) have shifted their focus towards building a software as a service (SaaS)-based lightweight platform for securing the entire infrastructure (both on-premises and cloud). This is a win-win situation for both clients and small and medium enterprises (SMEs) as they get to deploy the model wherever necessary. Service providers also find it as a cost-effective solution to develop and offer better modularity compared to a traditional bundled offering.