Cloud Economics: Integrated IaaS and PaaS is the Future

Cloud Economics: Integrated IaaS and PaaS is the Future

April 15, 2019

According to Gartner, 90 percent of organizations purchasing public cloud IaaS will do so from an integrated IaaS and PaaS provider by 2022. To help understand the demand to ‘democratize software’, we sat down with ManageEngine Head of Global Marketing Ajay Kumar about Site24x7’s latest product offering – CloudSpend.

By Joanne Leila Smith

According to Gartner Research Director Sid Nag, demand for integrated IaaS and PaaS offerings is driving the next wave of cloud infrastructure adoption. Nag claims that IaaS cloud providers will exist only as niche players in the future, as organizations will demand offerings with more breadth and depth to suit hybrid environments. Gartner says strategic initiatives such as digital transformation projects resulting in the adoption of multicloud and hybrid cloud is fuelling the growth of the IaaS market.

In a September 2018 report, Gartner claims the worldwide public cloud services market is projected to grow 17.3 percent in 2019 to total USD206.2 billion, up from USD175.8 billion in 2018.

The fastest-growing segment of the market is IaaS, which is forecast to grow 27.6 percent in 2019 to reach USD39.5 billion, up from USD31 billion in 2018.

SaaS remains the largest segment of the cloud market, with revenue expected to grow 17.8 percent to reach USD85.1 billion in 2019. Gartner Research Vice President Craig Roth says organizations are steadily shifting their content environments to SaaS, with the current ECM market devolving into purpose-built, cloud-based content solutions and solution services applications by the end of the year.

In the BPaaS category, Gartner forecasts a revenue growth of 7.9 percent, to reach USD50.3 billion in 2019. In this category, Gartner claims buyers want deep domain expertise, tech and global deployment capabilities from their providers as well as service portfolios that bridge legacy offerings and support new automated, digital and cloud service delivery paradigms.

To meet market expectation, ManageEngine Head of Global Marketing Ajay Kumar says Site24x7, a cloud-based performance monitoring solution for DevOps, launched CloudSpend in Q1 2019, which aims to bridge the gap between capacity planning and cost optimization for resources running in public cloud platforms such as Amazon Web Services (AWS).

“With public cloud being cost effective and easy to set up, businesses tend to leverage them to digitize their services and achieve their business goals faster. This often leads to complexities that arise due to unmonitored, underused or idle cloud resources on various platforms in multiple accounts, resulting in overspend. To eliminate these undesired expenses, organizations need a solution that can help monitor and optimize their cloud costs without impacting their services. To this end, our new product offering, CloudSpend, enables businesses to visualize runaway expenditure and implement effective budget controls in AWS, while reducing our client’s OpEx across multiple accounts,” says Kumar.

According to Kumar, CloudSpend addresses cost optimization issues with a holistic view of cloud expenditures across multiple accounts from a single console. He says CloudSpend provides IT teams insights for addressing cloud cost adjustments that achieve priority-based resource allocation to help reduce overall spend.

“With pay-as-you-go pricing models, public cloud platforms are strategic drivers for digital transformation. Since digital transformation is largely a process and not the end goal, businesses not only want to embark on their digital transformation journey but also wants to optimise it to reap greater results. CloudSpend’s addition to our AI-driven monitoring capabilities not only streamline and enhance performance of their applications on AWS but maintain an equilibrium when it comes to cloud spending, thus creating a win-win situation for DevOps, and IT teams,” says Kumar.

While the global public cloud market is on a healthy upward trajectory, Kumar says this demand is not indicative of customer’s not wanting value-for-spend; organisations are cost-conscious now more than ever. Zoho Corporation claims to be the pioneers of the freemium model in this space, and this approach continues to be the cornerstone of its go-to-market strategy.

“In 2001, we were the pioneers of giving people the opportunity to try a product before they make the purchase. Historically, our competition used to fly in a Consultant to get them to understand the requirements of the customer, which might take three months to deliver the product. We want to democratize the software and get it into the hands of people who want to leverage the value it brings to their businesses, in any country. In 2005, we started investing in cloud technology and we now have 40 plus applications that run on cloud, and we have 10 Data Centers world-wide. CloudSpend is the result of our product management team putting themselves in the shoes of the customer to try to optimize SMEs and Enterprise IT’s digital transformation journey,” says Kumar.

Prior to Cloud adoption, businesses had large resource overheads; hiring Developers and IT specialists to run and manage their digital assets. This increased the cost of digitization, which made it cost prohibitive for SMBs to compete against SMEs and Enterprises who were undergoing digital transformation. With the entry of Public Cloud into the market, the complexity and costs of acquiring and managing digital assets enabled SMBs to compete against larger players, hence, democratization of software.

“Removing upfront costs to run infrastructure, paying only for what you use, increases the major cost effectiveness of solutions being offered. Furthermore, the average cost of downtime across all businesses is USD260,000 per hour so CloudSpend, as a proactive monitoring platform, will reduce resolution time too,” says Kumar.

According to Kumar, startups can tap into CloudSpend’s freemium version to understand the value this product offering brings to the table.

“Most of our freemium users turn out to be enterprise customers. They can download the product one month free of cost and if they like it, they can come back and buy it. If they don’t, they can just leave it at no charge,” says Kumar.

Site 24×7 claims CloudSpend offers the following product highlights:

Business Units: With business units, organizations can attribute spending to one or more entities based on tags and understand costs by different projects, departments, teams or cloud customers.

Budgets: Set budget limits for AWS accounts, business units or tagged resources and receive notifications when spending exceeds the budget .

Out-of-the-box views: Gain a quick snapshot of an organization’s AWS expenditure broken down by various dimensions, including linked accounts, service type, region and user-defined tags with options to schedule them as reports.

Security: Fortified with self-hosted data centers, redundant grid architecture, encryption in transit, ISO/IEC 27001 certification, GDPR compliance, and SOC 2 certification, plus strict policies and processes, Site24x7 CloudSpend provides top-of-the-line security.

For all customers and managed service partners wanting to optimize AWS costs, CloudSpend is free of cost for AWS bills less than USD3,000 per month. Site24x7 CloudSpend is planned to be priced at 0.5% of AWS bill amounts greater than USD100,000, and 0.8% of AWS bill amounts between USD3,000-100,000.

According to Kumar, Site24x7 plans to extend CloudSpend capabilities to other cloud platforms like Microsoft Azure and Google Cloud Platform in the near future.

Site24x7 is a cloud offering from Zoho Corporation, which has offices worldwide, including the Netherlands, United States, India, Singapore, Japan, and China.


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