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European IaaS adoption set to soar as more IT infrastructure moves off-premise

The economics of using cloud-based storage and compute makes better financial sense for many enterprises, claims research

The European infrastructure-as-a-service (IaaS) market will enjoy a compound annual growth rate (CAGR) of nearly 40% between now and 2019, as enterprises look to wind down their on-premise datacentre investments.

According to Frost & Sullivan’s Analysis of the European infrastructure-as-a-service market report, this section of the cloud market generated revenues in the region of $1.95bn in 2014, but this figure is on course to hit $10.1bn by 2019.

Shuba Ramkumar, a senior research analyst within Frost & Sullivan’s information and communication technologies division, said much of this growth is being driven by enterprises realising the flexibility and cost benefits of moving more of their datacentre infrastructure to the cloud.

“The on-demand, pay-as-you-go model of cloud services is garnering intense interest in Europe as it allows enterprises to effectively deal with volatility and seasonality in IT demand,” said Ramkumar.

“Infrastructure requirements can be easily altered using a web portal, in contrast to the traditionally cumbersome job involving physical servers or networks.”

Furthermore, according to the report, it also makes it easier for users to manage their IT budgets in the face of some challenging economic conditions in parts of Europe.

“The deployment of IaaS decreases enterprise capital investment in internal datacentres, hardware and human resources, which can instead be directed to core business functions,” it states.

While this trend has been traditionally been driven by enterprises using IaaS to provision cloud-based compute and storage, for example, providers are rapidly building out their product portfolios to include a range of complementary offerings too.

According to a separate report by IT analyst house Gartner, published in May 2015, this is a path many IaaS providers are following to differentiate their offerings as competition within the IaaS market continues to hot up.

“Offering hybrid cloud services that combine IaaS with managed hosting or on-premise along with managed cloud services will help build a secure and unified infrastructure [for users],” added Ramkumar.

“With the rise in different hosting environments requiring enterprises to operate in multi-vendor ecosystems, service providers must also harness an environment of coopetition where partnerships can be leveraged to ensure easy migration of applications and stronger adoption of IaaS in Europe.”

Read more about infrastructure-as-a-service adoption trends

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