Future trends in Cloud Computing (IaaS, PaaS, SaaS, Storage & Internal Clouds)

iStock_000018660718Medium_cropCloud computing continues to gain more mainstream adoption as more companies move into the cloud. This article focuses on where the cloud space stands in the market and the future driving trends in these five specific areas: Infrastructure as a Service, Platform as a Service, Software as a Service, Cloud Storage and Private/Internal Clouds.

Commodity Infrastructure as a Service



Infrastructure as a Service (IaaS) is what most IT professionals think about when they talk about the cloud. IaaS is also referred as Cloud Infrastructure service and is considered as the core of cloud computing.

Forrester, an analyst firm predicts it will generate greater revenue potential which can clearly be seen from Amazon Web Services, the undisputed commodity IaaS revenue leader. An estimate of the revenue development of Amazon Web Services cloud computing and hosting solutions from 2012 until 2015 is 2 in 2012, 3.8 in 2013, 6.2 in 2014, and 8.8 in 2015 (in billions). AWS reveals that its S3 storage service hosts doubled as it now hosts more than 262 billion objects.

Rackspace, the second largest commodity IaaS provider also reveals an increase in its revenue. With its Cloud Servers and Cloud Files, they reported an 18.1 percent increase from $31.4 million to $37.1 million for the first quarter of 2011. In recent months, investors have gotten less optimistic about Rackspace earnings, cutting 20% from their first-quarter estimates and 10% to 15% from their full-year 2014 and 2015 projections. The stock has plunged, falling 29% since early February.

Both AWS and Rackspace’s rapid revenue growth can be credited from the growing usage of the IaaS. Despite this reported growth, some are still reluctant to consider commodity IaaS for mission-critical applications in the cloud. A recent survey showed that 52 percent responded that security concerns are holding them back from using the cloud.

Large organizations rely on commodity IaaS for testing and developing new applications, and for hosting applications that are less-critical, while small businesses use it for mission-critical applications.

Future Trend

Commodity IaaS will continue to shape up and take on more enterprise workloads. Enterprise-focused clouds will look to further specialize their offerings. Survey respondents cited the need for more insights from operational data and more control. Cloud users and providers cited “analytics” and “automation” as a service they’d like to have.

Enterprise IaaS

Providing on-demand access to computing and storage resources is the main focus of Enterprise IaaS clouds. One difference between the two is the difficulty to distinguish enterprise IaaS adoption rates and market size from those of commodity IaaS. Enterprise IaaS clouds don’t need to attract a number of users as they are dealing mostly with revenues from larger deals.


Even though adoption rates and market size can be hard to distinguish at Enterprise IaaS, it is still doing fine among its target audience.  Instead of taking the scale-out approach of commodity IaaS, enterprise IaaS providers build their clouds using high-end gear.

One of trend in Enterprise IaaS is running VMware at the hypervisor layer. This aims to capitalize the frequency of VMware within many corporate data centers. A survey of IT executives shows that hybrid cloud as the top priority. Through this, organizations won’t commit entirely to public cloud resources and private cloud resources as they can use either model.

Future Trend

On top of the core enterprise IaaS platform, the entrance of IBM into the enterprise IaaS adds diverse services. This includes tools to enable dynamic application development to advanced analytics services. As part of IBM’s SmartCloud offering, it has promised Hadoop processing service in addition to its existing WebSphere and Cognos services.

For enterprise IaaS providers, one challenge would be to harden their clouds for enterprise applications. In order to attract more enterprise developers, they have to loosen access to their platforms. The hybrid model for IaaS developers could be another option.

Platform as a Service (PaaS)

whatisthecloudpaasIn PaaS, the operating system and application platform, for the most part, are abstracted away from the user (Java or web developer). I say “for the most part” because aspects of the application platform, such as language version or framework, certainly matter to the developer but underlying aspects of the platform that aren’t exposed in the form of APIs, programmatic interfaces, or language features don’t.

One of the greatest benefits of a PaaS is its ability to create a bright line between what’s “operations” and what’s “development”. In other words, what’s “yours” and what’s “theirs”.

Things get complicated and expensive when that line blurs: developers demand tweaks to kernel settings, particular hardware, etc. which fly in the face of any standardization or automation effort. Operations, on the other hand, creates inflexible rules for development platforms that prevent developers from doing their jobs. PaaS decouples these two, and permits each group to do what they’re good at.


If you’ve outsourced your operations or development, this problem gets worse because any idiosyncrasies on the ops or the development side create friction when sourcing work to alternate vendors.

By using a PaaS, you make it perfectly clear who’s responsible for what: above the PaaS line, developers can do whatever they like in the context of the PaaS platform, and it will automatically comply with operations standards. Below the line, operations can implement whatever they like, choose whatever vendors they like, as long as they’re delivering a functional PaaS environment.

We spend a lot of time talking about why PaaS is great for developers. I think it’s even better for procurements, architecture, and budget.

The huge financial investment that PaaS gained in the past years proved that is continues to gain popularity. Everyone needs a service that promises to fundamentally alter the way applications are developed, deployed and managed.  Still, it remains to be dependent on individual developers, web startups and enterprise developers. Developers are flocking to Paas for their enterprise applications.

Microsoft’s Windows Azure platform is at the center of its cloud efforts that has attracted a number of customers. Among them are Toyota, the Associated Press and Intuit.

On the first half of 2011, PaaS providers address the concern about lack of control and lack of choice. Based from the survey, “Complexity” is the major issue that PaaS seeks to eliminate; followed by Interoperability” and “Lock-in.”

Future Trend

The convergence of these trends – the investments by large vendors, the advances in control and choice, and the increasing popularity of web and mobile applications – are the biggest drivers of PaaS adoption.

Microsoft’s success with Windows Azure suggests the possibility of success for VMware, Red Hat and Salesforce.com as they continue to use PaaS application platforms.

It is also interesting to see Google App Engine as PaaS adoption picks up. Google promises more features will make their way into the standard App Engine.

 Software as Service


In terms of users and revenues, Software as a Service, has the biggest share. Software and services on demand debuted in fourth place on the National Association of State Chief Information Officers (NASCIO) 2010 list of top 10 policy and technology priorities for CIOs.

One good example is the CRM service of Salesforce.com’s multi-billion dollar business. SAP and Oracle are also embracing SaaS for their heavy-duty applications.

Some reported that SaaS has inspired Everything as a Service, where any IT process or application or business function is available as a service.  Gartner estimated SaaS to reach $10.7 billion in 2011. Another analyst firm, IDC, predicts a $72.9 billion cloud services market by 2015.

GigOM’s survey reveals that 61 percent derive their revenues primarily from SaaS subscription fees; and 74 percent identified a SaaS offering as the cloud computing services they are using.

Business strategy and customer expectation

CxOs (CEO, COO, CFO, CIO, CTO, and so on) want to improve their business processes and to have more profitable operations. Their expectations for cloud computing are:

  • Business process standardization, which is matured at the global level
  • Total cost of ownership (TCO) reduction (effect of standardization, sharing and automation)
  • Risk mitigation of entrance of new markets

CxOs want to increase their revenue from the international business area. In this case, the SaaS vendors have already been able to service the global area, and have standardized the business processes within the industry of their target business area. Furthermore, their industry frequently increases alliances with many companies. The international industry standards become complex business processes because alliances increase. Customers cannot modify the IT system themselves without the help from the SaaS vendor.  Also, they expect the TCO reduction by third-party IT management. Customers want to both minimize the risk of entrance into new markets, with agility, and also have easy withdrawal.

Microsoft offers a variety of outstanding SaaS services to address the customer needs. Microsoft Business Productivity Online Suite delivers a suite of services for hosted communication and collaboration.
Dedicated cloud offerings for organizations can deliver integrated communications with high availability, comprehensive security, and simplified IT management. Microsoft Exchange Online delivers your email with protection, plus calendar and contacts. Microsoft SharePoint Online creates a highly secure, central location for collaboration, content, and workflow. Microsoft Office Communications Online provides real-time, person-to-person communication with text, voice, and video, across agencies. Microsoft Office Live Meeting delivers hosted web conferencing. Microsoft Exchange Hosted Services are attached services that include filtering, archiving, encryption, and continuity. Microsoft Dynamics CRM Online, with minimal configuration, offers constituent relationship management (CRM) and other extended CRM solutions to help you automate workflow and centralize information. Windows Live services help developers connect their applications, experiences, and customers to more than 500 million Windows Live users.


Future Trend

Aside from the endless emergence of new applications, SaaS will focus on integration of data and services. This integration could prove to be a valuable offering that will address the growing number of cloud services.

Most survey results reveal that users of multiple SaaS applications plan to increase their usage over time; which is both a challenge and an opportunity for data-integration vendors.

As SaaS use grows, data virtualization can pick up its momentum by incorporating data from mobile devices and other end-user derived sources. SaaS providers must also find ways to work tightly in integrating data among applications.

 Cloud Storage



Take control of your files and apps by using unlimited cloud storage. You can access your corporate information anywhere and from any device.

Cloud storage is defined as the independent storage services in the cloud and is the most widely deployed cloud services.  It is currently being used to backup data, although it also serves as primary file- or content-storage options for web applications, like for Amazon’s Simple Storage Service (S3).

Cloud storage is risk-free as data is already stored elsewhere without the need to be accessed by production applications. However, it is not really good at primary storage as it needs high levels of features, network performance and availability

There are many companies making a name in primary cloud storage. Few of them are, Microsoft SkyDrive (SkyDrive’s upload from PC option includes two-factor authentication to make it safer.) Amazon Cloud Drive, Apple iCloud, Box, Dropbox, Google Drive, MediaFire, Mega, SpiderOak, and Ubuntu One

It uses a virtual gateway to route files securely and reliably to cloud storage infrastructure from a number of providers.

Looking forward

The innovation on cloud storage will focus on primary storage for enterprise applications in the cloud. As vendors such as HP and Dell have storage businesses and public clouds, they could benefit from leveraging their storage expertise to make primary cloud storage a reality.

However, companies deciding for primary cloud storage must innovate on data-transport front. It won’t be attractive for customers if they rely only on the public Internet for uploading and downloading primary data.

Cloud storage providers will also push for new privacy regulations.

 Private Cloud



A private cloud is a particular model of cloud computing that involves a distinct and secure cloud based environment in which only the specified client can operate. As with other cloud models, private clouds will provide computing power as a service within a virtualised environment using an underlying pool of physical computing resource. However, under the private cloud model, the cloud (the pool of resource) is only accessible by a single organisation providing greater control and privacy.

cloud-big Private cloud is considered as the delivery model choice of large enterprises and other risk-averse businesses. GigaOM survey reveals 63 percent of respondents utilize private clouds or hybrid clouds as the focus of their cloud strategies. More traditional businesses are also emerging as private-cloud customers.

Over the past years, these four most-prominent private cloud startups – Nimbula, Eucalyptus Systems, Cloud.com and Abiquo – have raise a combined total of $73 million.

It has been noted that there are 2 interesting trends taking place – the advent of PaaS software designed to run on private clouds, and the OpenStack.

Future Trend

Private clouds are here to stay whether as a whole or part of a hybrid cloud environment.  For private cloud vendors, choosing to rely on their partners or building their own features will be a big decision.


Two major trends can be expected in the coming years – advanced hybrid cloud capabilities, and a wave of innovation around higher-level features and specialized functions.

At the end companies with a good balance of centralized and ambient will be the winners in their respective industries because they will be able to lower the cost of their infrastructure and make it faster at the same time. Microsoft, the owner of the distributed desktop OS, is racing towards centralized clouds with Azure, while Google, the king of centralized, is racing towards ambient with Chrome and Android, for instance.

The companies that achieve the right balance of centralized vs. ambient clouds are the ones that will emerge as winners as the young cloud computing industry matures.microsoft-cloud-strategy

As for Windows Azure Infrastructure Services, the goal is to provide customers with scalable on-demand virtual infrastructure so organizations can extend their data centers to the cloud in a secure manner. According to Bill Hilf, Microsoft general manager of Product Management for its cloud computing platform, the new services are about providing IaaS and PaaS, as well as “hybrid cloud scenarios.”

MSFT Cloud Scale


Microsoft, AWS, and Google  and some of the other cloud players are already at such a scale that small increases in performance or small reductions in cost can make a huge difference in profitability. Ambient clouds that are the most cost effective, and in many cases the best performing. No matter which cloud provider ends up on top, every cloud-connected device you touch is a part of dozens of clouds. It’s up to you to decide which ones.


2 comments on “Future trends in Cloud Computing (IaaS, PaaS, SaaS, Storage & Internal Clouds)

  1. Thanks Neel! Loved this post!

    An excellent article,very easy to comprehend. Personal B2C space is growing faster than B2B and so far enterprise IT organizations showed little sign of excitement for these “enterprise” offerings, and the proof is:

    1. HP threw in the towel on its public cloud offering. The company shut down its product, HP Helion Public Cloud, on Jan. 31, 2016
    2. The No. 1 U.S. wireless carrier,Verizon launches auction to sell data centers and enterprise assets (including Terremark, its cloud offering) on Jan 2016.
    3. CenturyLink announced it was interested in selling off its data center assets. This is not a sure sign that the company was looking to get out of cloud computing, and it insisted that it remains committed to cloud computing, then two of its top cloud execs left the company.
    4. In Oct 2015, VMware, Inc. announced that it will not form Virtustream Cloud Services Business with EMC as announced this October. As Virtustream was not profitable in the past. A 50% stake would have required VMware to invest a huge amount for the development of hybrid-cloud solutions of Virtustream, which would weigh on VMware’s financials.

    Subb’d and back again…

    Patrick D. Smith

  2. Thanks for the great post! Joined your mailing list! Come back again for more…As you said in this post I believe Cloud computing is at an early stage, with a motley crew of providers large and small delivering a slew of cloud-based services, from full-blown applications to storage services to spam filtering. Many new vendors may come in coming future, cloud computing is the hardest one to argue with in the long term. Cheers, Rob

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