idc marketscape: canadian public iaas 2015 vendor assessment · as a channel to the market....

February 2015, Excerpt of IDC #CA1SSC15

IDC MarketScape

IDC MarketScape: Canadian Public IaaS 2015 Vendor Assessment

Mark Schrutt

IN THIS EXCERPT

The content for this excerpt was taken directly from the IDC MarketScape: Canadian Public Infrastructure

as a Service 2015 Vendor Assessment by Mark Schrutt (Doc #CA1SSC15). All or parts of the following

sections are included in this excerpt: IDC Opinion, IDC MarketScape Vendor Inclusion Criteria, Essential

Buyer Guidance, Vendor Summary Profile, Appendix, Learn More and Related Research. Also included

is the IDC MarketScape Figure (Figure 1).

©2015 IDC Excerpt of #CA1SSC15 2

IDC MARKETSCAPE FIGURE

FIGURE 1

IDC MarketScape: Canadian Public IaaS Vendor Assessment

Source: IDC, 2015

Please see the Appendix for detailed methodology, market definition, and scoring criteria.


IDC OPINION

This study is IDC's second IDC MarketScape on the Canadian public IaaS market. Offerings are

becoming less expensive while much more robust and automated to enable self-serve features.

Providers are picking up on the hybrid message and designing their solutions with interoperability and

hybrid management in mind. Partners also have more skin in the game to bridge gaps in offerings and

as a channel to the market.

CenturyLink, one of the leading ICT providers in the world, is placed in the Major Player category in

this IDC MarketScape.

IDC MARKETSCAPE VENDOR INCLUSION CRITERIA

This research includes analysis of the leading public infrastructure–based cloud service providers in

Canada. The inclusion criteria was set at a minimum of C$1 million in public IaaS revenue and C$20

million in overall hosting.

This assessment is designed to evaluate the characteristics of each firm — as opposed to a firm's size

or breadth of services. It is conceivable, and in fact the case, that specialty firms can compete with

multidisciplinary firms on an equal footing. As such, this evaluation should not be considered a "final

judgment" on the firms to consider for a particular project. An enterprise's specific objectives and

requirements play a significant role in determining which firms should be considered as potential

candidates for an engagement.

ESSENTIAL BUYER GUIDANCE

Align your efforts. The shift to a more business-focused IT department is already underway.

More progressive CIOs have built closer ties and integrated IT (resources, activities, and

sourcing decisions) with the business. By focusing on what solutions are needed rather than

how they are delivered, CIOs are crafting IT departments that will look far different from

traditional IT and are much more flexible, responsive, and effective.

Get your plan in flight. Buyers need to ramp up their knowledge and then quickly take cloud off

the drawing board and into production. Buyers need to develop transition plans for legacy

technologies and have a cloud-first approach to new projects and infrastructure spend. This

planning starts with the needs of the business, how IT can support the business' goals, and

what options are available for IT to do its job better and more cost effectively. Cloud changes

how IT gets done, sometimes supplementing, and in other situations replacing, how services

are delivered. Companies need to reassess their IT strategy and determine if and when

traditional technologies and tasks such as test/dev and backup and recovery can be moved to

the cloud. This new IT strategy cannot sit on the shelf. Planning needs to be a continuous

process that realigns the business and IT and addresses the rebalancing between internally

and externally provided service and hosting, public, private, and hybrid IaaS.

Make hybrid your goal. Buyers cannot leave cloud in isolation. Part of the planning process

needs to be the framework that will integrate single-vendor clouds with corporate systems.


This involves the rewriting of processes to adjust to on-demand and as-a-service model

supporting business users in various ways, different chargeback mechanisms, and new tools

to manage it all. The IT department will also have to shift from delivering services to managing

delivery and vendor relationships. IT will have to demonstrate its ability to manage change,

work closer with the business, and show value for money.

VENDOR SUMMARY PROFILE

This section briefly explains IDC's key observations resulting in a vendor's position in the IDC

MarketScape. While every vendor is evaluated against each of the criteria outlined in the Appendix,

the description here provides a summary of each vendor's strengths and challenges.

CenturyLink

CenturyLink, one of the leading ICT providers in the world, is placed in the Major Player category in

this IDC MarketScape. Primarily known as a telecommunications firm, CenturyLink has built an

impressive hosting and managed services practice. This includes the acquisition of Savvis, which had

acquired Canada's Fusepoint in 2010, and Tier 3, an infrastructure-as-a-service provider with a small

Canadian footprint, in 2013.

CenturyLink Canada has a well-balanced base of business, with colocation, dedicated hosting, and

cloud services. Through its predecessor, Savvis, CenturyLink built a solid initial line of cloud-based

infrastructure offerings under the Symphony line. In November 2013, CenturyLink acquired Tier 3, a

pure-play IaaS provider based in Seattle. The Tier 3 offerings were automated, self-serve, pay as you

go, and scalable. Along with a new product line, Tier 3 brought significant technical as well as

operational expertise to CenturyLink. Since that time, CenturyLink has transitioned the Symphony

product line onto the Tier 3 platform, leveraged the platform to redesign other CenturyLink offerings,

and centralized cloud engineering and operations in the Seattle area.

CenturyLink Cloud is available primarily in a pay-as-you-go model with an option for clients to sign up

to longer-term contractual commitments. The company's public IaaS comes in managed or self-

managed versions and is marketed for test/dev, Web front-end, and legacy applications as well as

collaboration and database workloads. It is built on VMware vSphere v5 along with IP developed by

CenturyLink.

CenturyLink operates over 57 datacentres around the globe. Over the past two years, CenturyLink has

heavily invested in its Canadian facilities in Vancouver and Montreal as well as its two largest centres

located in the Greater Toronto Area, including a new one in Markham, Ontario, which opened last fall.

CenturyLink Cloud is delivered out of three of the Canadian datacentres, all of which are SSAE 16,

SOC 1 and 2, and PCI certified.

CenturyLink focuses on the midmarket and lower end of the enterprise space. CenturyLink primarily

leverages its direct sales force for cloud services, and onboarding of clients onto the CenturyLink

Cloud involves sales and sales engineers in a consultative sales approach. Using CenturyLink's

channel approach concentrated in the United States, CenturyLink's local operations are beginning to

develop local channel relationships. This has already occurred with certain technology influencers and

consultants in the Toronto area and with the aim of building an ecosystem or group of advisors that

they can work with to promote CenturyLink's cloud services. CenturyLink's strategy also includes

enhancing its portfolio of managed services and expanding its platform capabilities as well as


additional automated services, platform-as-a-service capabilities, and a potential bare metal public

IaaS offering.

Strengths

CenturyLink Cloud public IaaS is a sound, flexible, and high-performance offering. The Tier 3

acquisition brought CenturyLink a solid provisioning platform that it can extend to its other

infrastructure offerings. These include private IaaS and dedicated and colocation hosting, which

provide clients a full suite of options to help manage their infrastructure needs.

Challenges

The CenturyLink name is not well known in the Canadian marketplace. CenturyLink acquired Savvis,

which had bought Fusepoint in 2010. The corporate changes has created a brand issue for

CenturyLink, which it will have to work on. IDC's cloud survey showed little recognition of the name

and uncertainty of whether its cloud offerings are good or bad. CenturyLink needs to work by word of

mouth, targeted advertising and promotion, and expanding its sales and channel coverage to regions

outside of the Greater Toronto Area.


APPENDIX

Reading an IDC MarketScape Graph

For the purposes of this analysis, IDC divided potential key measures for success into two primary

categories: capabilities and strategies.

Positioning on the y-axis reflects the vendor's current capabilities and menu of services and how well

aligned the vendor is to customer needs. The capabilities category focuses on the capabilities of the

company and product today, here and now. Under this category, IDC analysts will look at how well a

vendor is building/delivering capabilities that enable it to execute its chosen strategy in the market.

Positioning on the x-axis, or strategies axis, indicates how well the vendor's future strategy aligns with

what customers will require in three to five years. The strategies category focuses on high-level

decisions and underlying assumptions about offerings, customer segments, and business and go-to-

market plans for the next three to five years.

The size of the individual vendor markers in the IDC MarketScape represents the market share of each

individual vendor within the specific market segment being assessed.

IDC MarketScape Methodology

IDC MarketScape criteria selection, weightings, and vendor scores represent well-researched IDC

judgment about the market and specific vendors. IDC analysts tailor the range of standard

characteristics by which vendors are measured through structured discussions, surveys, and

interviews with market leaders, participants, and end users. Market weightings are based on user

interviews, buyer surveys, and the input of a review board of IDC experts in each market. IDC analysts

base individual vendor scores, and ultimately vendor positions on the IDC MarketScape, on detailed

surveys and interviews with the vendors, publicly available information, and end-user experiences in

an effort to provide an accurate and consistent assessment of each vendor's characteristics, behavior,

and capability.

Market Definition

Scope of this Study

Cloud services are fundamentally about an alternative solution composition, delivery, and consumption

model — one that can be applied to IT industry offerings but also, much more broadly, to offerings from

many other industries, including entertainment, energy, financial services, health, manufacturing,

retail, and transportation as well as the government and education sectors.

The cloud model goes well beyond prior online delivery approaches — combining efficient use of

multitenant (shared) resources, radically simplified "solution" packaging, self-service provisioning,

highly elastic and granular scaling, flexible pricing, and broad leverage of Internet-standard

technologies — to make offerings dramatically easier and generally less expensive to consume.

Most cloud environments are built using virtualization, automated provisioning, service-level

management, end-to-end performance monitoring, consumption-based capacity optimization,

chargeback analysis, and a number of other state-of-the-art management software products used to

enable the dynamic resource scaling and automated provisioning capabilities that are the hallmark of

cloud environments.


Cloud Service Attributes

Cloud computing environments are defined by IDC as having a number of important attributes that

distinguish them from other computing architectures, including virtualization and clustering.

Specifically, IDC defines cloud services through a checklist of key attributes that an offering must

manifest to end users of the service (see Table 1). Cloud services, as defined by IDC, require the

support of all of these attributes. This definition was taken into account in reviewing and scoring the

providers in this study.

These attributes apply to all cloud services — in all public and private cloud service deployment models

— although the specifics of how each attribute applies may vary slightly among these deployment

models. For more details, see IDC's Worldwide IT Cloud Services Taxonomy, 2012 (IDC #233396,

March 2012).

TABLE 1

Key Cloud Service Attributes

Cloud Services Attribute Details

Shared, standard service Built for multitenancy, among or within enterprises

Solution packaged A "turnkey" offering, pre-integrates required resources

Elastic resource scaling Provisioning and management, typically via a Web portal

Elastic, use-based pricing Dynamic, rapid, and fine-grained

Ubiquitous (authorized) network access Supported by service metering

Standard UI technologies Browsers, RIA clients, and underlying technologies

Published service interface/API Web services, other common Internet APIs

Source: IDC, 2015

Infrastructure-Based Deployment Models

At the highest level, there are two types of deployment models for cloud services: public and private.

Figure 2 provides a framework of the breadth of cloud deployment models. For more detailed

descriptions of these services, see IDC's Worldwide Services Taxonomy, 2013 (IDC #239900, March

2013):

Public cloud services. Public cloud services are shared among unrelated customers and are

open to a largely unrestricted universe of potential users. Public cloud services are designed

for a market — not a single enterprise. Public IaaS is in the scope of this study.

Private cloud services. Private cloud services are shared within a single enterprise or an

extended enterprise. Private cloud services have restrictions on access to and level of

resource dedication, are defined/controlled by the enterprise, and can be managed either by

in-house staff or by a third-party provider.


The latter model is referred to as hosted private cloud. Hosted private cloud services have significant

user control and security structures in place, typically for additional cost, and/or that offer an array of

tenancy and resource dedication choices that set hosted private cloud services apart from public cloud

while still having the cloud characteristics (refer back to Table 1). Hosted private cloud is a composite

view of two cloud deployment models: virtual private cloud (VPC — in the scope of this study), which is

an adjunct of public cloud services with shared virtualized resources and a range of customer control

and security options distinct from most public cloud infrastructure as a service, and dedicated private

cloud (not in the scope of this study), which is about dedicated physical resources focused on one

enterprise/extended enterprise.

FIGURE 2

Cloud Services Deployment Models

Source: IDC, 2015

Strategies and Capabilities Criteria

Along with the selection criteria and the scoring our survey respondents gave to the vendors

participating in this study, IDC also factored in vendors' offerings, strategies, and approach to the

market in our IDC MarketScape rankings. Tables 2 and 3 provide an explanation and weightings for

these elements.


TABLE 2

Key Strategy Measures for Success: Public IaaS

Strategies Criteria Factors

Subcriteria

Weighting

Offering strategy

Functionality or offering

road map

Overall approach/portfolio of cloud services, how will private IaaS and

managed hosting evolve

2.00

Delivery model On-premise/hosted and pricing models 1.25

Cost management strategy Leverage datacentre investments for IaaS; operational strategy to support

IaaS, approach to being a low-cost/value-added provider

1.50

Portfolio strategy Value-added services; one-stop shop for SaaS, PaaS, database services 1.75

Future integration strategy Integration with existing internal and outsourced information systems; ability

to onboard and repatriate

2.00

Scalability strategy Approach to supporting more compute/storage, datacentre buildout approach,

DR, failover, no outage plan, balancing loads

1.50

Subtotal 10.00

Go-to-market strategy

Pricing model Billing and customer care, how does the vendor get feedback on pricing, ease

of contracting

3.00

Sales/distribution strategy Online fulfillment/provisioning, inbound/outbound sales, VAR, reseller

program for resale, consulting

4.00

Marketing strategy Marketing budget for IaaS versus other services; marketing department and

priority for IaaS

1.00

Customer service strategy CSAT approach, plan to identify and address issues; development of other

private and cloud services to drive stickiness, account management approach

2.00

Subtotal 10.00

Business strategy

Growth strategy Growth targets, how realistic are they, what hurdles do vendors see in

reaching and what are vendors doing about them

2.00

Innovation/R&D pace and

productivity

Use of cloud internally for productivity; linkage of R&D/innovation to customer

needs and revenue

1.25

Financial/funding model How will the vendor fund datacentre and IT investments, potential risk in this

model and mitigation strategy; cost of capital versus competition, operational

cost strategy

3.00

Other business strategies How green will the vendor's datacentre/operations be 3.75

Subtotal 10.00

Source: IDC, 2015


TABLE 3

Key Capability Measures for Success: Public IaaS

Capabilities Criteria Factors

Subcriteria

Weighting

Offering capabilities

Functionality/offering

delivered

Easy to understand and use; security features, measures and remediation;

configuration options (various compute, storage, database options, bring your

own license ability, operating systems [Lin, NT])

2.00

Delivery model

appropriateness and

execution

What options are available: on demand and elastic/self-serve, going through

sales/account managers, hybrid approach; scope of infrastructure options,

from private hosted to facility-managed private offering, VPC, public IaaS and

hosting options, and utility pricing model

3.00

Cost competitiveness Price competitive (compared with other vendors, all in [TCO]), price

reductions/volume discounts); how the vendor assesses and decides on what

to charge (gauging the market) and approach to continuous price changes

depending on market conditions), approach to pricing the underlying

professional services associated with cloud (integration, design, support)

1.75

Portfolio benefits delivered Suite of as-a-service cloud offerings (IaaS, public/private/dedicated, hybrid,

PaaS, SaaS storefront, cloud broker or integration services); suite of

additional infrastructure services (hosting, colocation), professional services

(consulting, architect, and design)

2.25

Integration capabilities How difficult (for the client) and how costly, what approach or methodologies

are utilized, tools and professional services available to help with integration

0.50

Scalability Scalability of the infrastructure, facilities; clients' ability to transition current

hardware assets to a virtualized environment/private IaaS

0.50

Subtotal 10.00

Go-to-market capabilities

Pricing model options and

alignment

Utility (pay as you go, what established minimums are there, is it all inclusive

[single billing, includes the network component]); easy to understand, easy to

compare

2.50

Sales/distribution structure,

capabilities

Choice between self-serve and using channel, sales force; presales technical

sales force

4.00

Marketing Priority IaaS has with other marketing efforts, percentage of marketing spent

on cloud/utility; strategy to customize marketing (business size, vertical — for

Canada)

1.50

Customer service How is support organized (in hosting, datacentre delivery, etc.); customer

portal and back-end integration to other support tools, single point of contact

for support

2.00

Subtotal 10.00


TABLE 3

Key Capability Measures for Success: Public IaaS

Capabilities Criteria Factors

Subcriteria

Weighting

Business capabilities

Growth strategy execution Growth targets, how realistic are they, what hurdles do vendors see in

reaching and what are vendors doing about them; datacentre expansion

plans and funding; sales force and channel investments (cloud as compared

with other services, how is sales integration going to occur (cloud with

traditional services), comparison with peers)

3.00

Innovation/R&D pace and

productivity

Number of Canadian/U.S. datacentres and capacity/specs, certifications,

sustainability feasters, dedicated of centre (sq ft) to IaaS

2.00

Financial/funding

management

Funding partners/credit line availability 4.00

Other business capabilities IDC perception data on how vendors rate on elements buyers see as critical

to IaaS

1.00

Subtotal 10.00

Source: IDC, 2015

LEARN MORE

Related Research

Canadian Public Cloud IT Services 2014–2018 Forecast (IDC #CA3CCS14, December 2014)

Canadian End-User Views on Cloud Computing Services (IDC #CA11CAS14, September

2014)

IT Buyer Guide: Canadian Managed Services, 2014 (IDC #CA7SSC14, September 2014)

Case Study: Canadian Cloud at Work (IDC #CA1CCS14, September 2014)

Canadian Infrastructure Outsourcing 2014–2018 Forecast (IDC #CA4SSC14, April 2014)

Canada Following Fast on the Cloud (IDC #CA4CCS14, March 2014)

IDC MarketScape: Canadian Dedicated Private Infrastructure as a Service 2014 Vendor

Assessment (IDC #CA1SSC14, March 2014)

A Canadian View of Infrastructure as a Service: Buyer Case Studies on the Toronto Star and

Lake Shore Gold (IDC #CA1CCS13, November 2013)

The State of Software as a Service in Canada, 2013 (IDC #CA7ECA13, October 2013)

Canadian Public IT Cloud Services: 2013–2017 Forecast Update (IDC #CA2CCS13, August

2013)

IDC MarketScape: Canadian Public IaaS 2013 Vendor Analysis (IDC #CA3SSC13, June

2013)

About IDC

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media, research, and events company.

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