Foundational Cloud Services Will Enable the Digital-First Strategies of the Future Enterprise: IDC

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  • These foundational cloud services (FCS) for compute, data, and app frameworks will drive competitive development across the whole cloud market, says IDC.
  • It said that several factors are behind the rising demand for foundational cloud services rather than similar IaaS and PaaS services from individual providers

Organisations use of cloud is moving to the next level of maturity, increasing adoption of a cross-functional set of services to drive innovation in a digital-first economy. These foundational cloud services (FCS) for compute, data, and app frameworks will drive competitive development across the whole cloud market, says IDC.

A new forecast from International Data Corporation (IDC) estimates that annual recurring revenue (ARR) derived from FCS will increase from just under $100 billion in 2020 to more than $300 billion in 2025 with a compound annual growth rate (CAGR) of 28.8 per cent.

Rick Villars, group vice president, Worldwide Research at IDC said, “Digital is now a permanent, yet dynamic fixture in our world, built on the digital infrastructure and platform technologies of a cloud foundation. When organisations want to pursue some digital-based capability or intelligently leverage data to their advantage, they can do so because they have rapid access to the foundational cloud services offered by the leading cloud services providers.”

IDC defines Foundational Cloud Services as the Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and System Infrastructure as a Service (SISaaS) markets where the top eight public cloud services providers (Amazon Web Services, Microsoft, Google, Alibaba Group, IBM, Tencent, Huawei, and Oracle) held a combined market share greater than 60 per cent in 2020. These include the following key service portfolios like Compute Services of Virtualized x86 Compute, Bare Metal Compute, Block Storage, Accelerated Compute, Other Compute, and Software-Defined Compute Software. It also consists of Data Services with Data Management Systems, Object Storage, File Storage, and Event Stream Processing Software.

It also comes with App Framework Services with Integration Software, Deployment-Centric Application Platforms, and AI Lifecycle Software. It comes with Usage Multiplier Services: Low or no fee services that encourage greater/more effective use of high value services by making it easier to adopt, connect, deploy, track, secure, and update those services. Includes load balancing and DNS as well as marketplaces and bundles of open-source software solutions.

It said that several factors are behind the rising demand for foundational cloud services rather than similar IaaS and PaaS services from individual providers. The available, affordable, and standardized infrastructure offered by FCS gives developers the ability to rapidly build, test, and deploy innovative applications.

It added, “The availability of multiple deployment options (hybrid cloud) and technologies that bring portability to applications (containers) enable customers to choose the best matched cloud provider for a given workload. Service-based consumption of IT infrastructure enables end users to reduce capital spending, optimize operating expenses, and focus the efforts of IT personnel on achieving business goals rather than routine infrastructure/data management. Finally, data-centric foundational cloud services can provide fully automated data capabilities that address the significant increases in data volumes and storage associated with mobile and edge (IoT) devices.”

IDC expects organisations will adopt a range of strategies for embracing FCS portfolios. Some will select a primary FCS partner while others will choose more diversified cloud deployment strategies. Regardless of the FCS strategy selected, enterprises will place a high priority on extensions to providers’ FCS portfolios in the areas of expanded service deployment options (edge, network, and core), automated governance services (manage, optimize, secure), and robust partner ecosystems.

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