Managed Application Services – The New Path to Profitability for Today’s IaaS Providers

IT organizations are turning to cloud computing to continue achieving their goals and objectives, and to provide more effectively sourced and consumed IT services for their business users and customers alike. Infrastructure-as-a-Service (IaaS) providers have proven to be the key enabler to this business trend and are now leveraging their infrastructure expertise to promote and host cost-effective managed application services.

The worldwide public cloud services market revenue is projected to grow 18.5 percent in 2017 to total $260.2 billion, up from $219.6 billion in 2016, according to Gartner, Inc. Of the overall market, the highest revenue growth will come from IaaS, which is projected to grow 36.6 percent in 2017 to reach $34.7 billion.

As cloud solutions and web applications grow, they are also becoming more complex, adding sophisticated e-commerce engines and cutting edge technologies such as artificial intelligence and virtual reality. These application trends support today’s need for making faster, more informed decisions and place heightened importance on the ever-increasing need for efficient and effective data management with an emphasis on performance.

All of this has led to a market transition where the database-as-a-service (DBaaS) has become an integral part of the overall infrastructure that supports application scale and end-user experience. Most IT departments do not have dedicated database administrators or the specific database expertise to successfully manage their data in a way that ensures application reliability and optimal performance. And since in-app databases are often inefficient and fail to scale, subscribing to a managed database service is one of the easier decisions companies are having to make. When adding new web applications that use data, the focus needs to be on optimizing the software stack as it relates to the overall ecosystem. Utilizing an always-on database service that automatically manages application data successfully removes the complexity associated with managing one or more databases.

In support of this growing need, many IaaS companies are building out their own DBaaS or are leaning on companies that offer the necessary building blocks to replicate proven DBaaS technologies. In either scenario, they are enabling their customers to operate that application and their database in the same geographical location and often in the same physical data center. This results in a better end user experience from an optimized application platform.

Finally, by offering managed application services, IaaS providers can play a key role in driving a consolidated, high performing and cost-efficient infrastructure for their customers. It allows the IaaS providers to expand their service offerings and deliver more value while also growing infrastructure consumption and revenue.