The Future Of IaaS Is In The Cloud

The right cloud service partner can help navigate infrastructure challenges, maximise
opportunities and mitigate risks!

2 China Telecom Global: Cloud IaaS

Is Not A Commodity
5 Technology Insight for Cloud Infrastructure
As A Service
16 About China Telecom Global
 Source: China Telecom Global

China Telecom Global: Cloud

IaaS Is Not A Commodity
Hamlet famously pondered whether “to be or not to be.” However, when it
comes to enterprise IT, the burning question is no longer whether it should
be in the cloud. It’s what kind of cloud do we need, and how are we going to
get there.

Cloud adoption is clearly accelerating, which is making the market for

cloud infrastructure grow at a rapid clip. Gartner reports that “...the fastest-
growing segment of the market is cloud system infrastructure services
(infrastructure as a service or IaaS), which is forecast to grow 35.9
percent in 2018 to reach $40.8 billion.”1

What’s more, pundits predict that overall investment on cloud IT

infrastructure – including on-premises private cloud – will overtake spending
on non-cloud IT infrastructure within the next four years.

Evaluate Providers On Their Capabilities

While we see that cloud IaaS is increasingly popular, according to Gartner’s
report entitled ‘Technology Insight for Cloud Infrastructure as a Service’,
“…cloud IaaS is not a commodity and has an extremely fast innovation
cycle”.2 That is partly because the innovation cycle is swift. Which means
that enterprise innovation leaders responsible for cloud computing should
take care to evaluate providers on their capabilities, as well as their ability to
deliver new IaaS capabilities at a competitive cost rapidly.

While all cloud IaaS offerings will all contain the basic capability to
provision compute, storage and networking resources, there is dramatic
variance in the number of available options, quality of implementation, the
speed of provisioning, quality of user experience, infrastructure availability
and performance.

Cloud IaaS offerings may contain extensive additional functionality,

encompass a range of IT operations management capabilities, such as
monitoring and user-controlled orchestration, as well as capabilities for
deploying and managing middleware and applications in an automated
2 l The Future Of IaaS Is In The Cloud

fashion.

Not All Cloud Providers Are Created Equal

Although IaaS is typically intended to reduce user concerns, as Gartner
points out, “...there is considerable variance in service provider design
goals, the quality of the technical implementations, and the cost-
effectiveness and value for money of those implementations”.3 Or, to put it
another way, not all cloud providers are created equal.
Making the right choice always matters. However, it is An Extensive Portfolio
especially crucial for enterprises looking for international and The China Telecom Global portfolio is extensive. With an
global support. If their provider turns out to be lacking, then emphasis on integration, we have designed our services for
the move to the cloud can end up being a massive bottle-neck full compatibility with all major cloud platforms in China and
rather than enabling business growth. overseas, including AWS, Azure, and Aliyun.

That’s not a risk for CTG customers. We offer secure, dedicated, One significant benefit of this approach is that new cloud
worldwide network coverage through over 300+ domestic nodes adopters and start-ups can quickly ramp up their cloud
within China and more than 26 nodes across the globe. That capabilities with these solutions. For more established cloud-
extensive footprint includes more than 10 internet data centres based and large enterprises, the high level of compatibility and
(IDCs) across APAC, EMEA and the Americas. easy integration of network and public cloud services offer the
flexibility to choose the right cloud platform for their workloads,
These IDCs aren’t standalone facilities. They are interconnected where and when they need it.
by a resilient, carrier-grade data network. Together, they enable
enterprises of all sizes to explore new opportunities in other CTG provides IaaS service on its cloud service portal. In
geographies, accelerate expansion plans and seize revenue addition, diverse customised enterprise solutions with industry-
opportunities no matter where they arise. leading SLA commitment are also available for addressing
business needs, such as private cloud, email server, disaster
We are focused on developing, not just a best-in-class network, recovery (DR) site or managed services.
but also the data centre services to meet the requirements of
globalisation and digitisation. In practice, that means creating Abundant Advantages
a highly-scalable, secure and resilient offering capable of
supporting our customers’ strategic goals across the Asia CTG is already helping customers all over the world to host
Pacific and beyond. both new and existing workloads. Certain workload patterns
may be better served by different cloud IaaS offerings to
CTG is aggressively putting that philosophy into focus. For achieve an optimal fit to virtually any use case.
example, CTG recently reinforced its position as an Asia Pacific
information hub by offering market-leading data centre services For example, when it comes to development environments,
at the new carrier-neutral, Tier III+ data centre in Hong Kong’s financial institutions worldwide are increasingly embracing
Tseung Kwan O district. technology to make innovations in their operations and
enhance the customer experience. However, these fintech
That’s not all. Next year (2019) we will be adding even more projects could put pressure on DevOps teams to set up or take
data centre resources in APAC, Europe and the USA to cater to down secured test environments quickly, while maintaining
customer demand for global coverage. fast and reliable interconnection among different internal and
third parties for effective collaborations. They also need to re-
CTG has also taken a pioneering step with software-defined configure workloads with no upfront cost.
networking (SDN) and a software-defined wide area network
(SD-WAN), which provide customers with an all-new CTG’s latest cloud-based SD-WAN solution can help
network experience characterised by quick delivery, minimal customers simplify their cloud connectivity, with robust
The Future Of IaaS Is In The Cloud l 3

configuration and centralised control. application identification, security, and policy enforcement. We
have also established a dedicated network of gateway nodes
By virtually separating network device management and to major public cloud platforms to ensure fast and agile public
centralising it, IT teams can optimise and streamline cloud connections for customers transferring their applications
management. It also allows companies to grow their network to the cloud.
faster and work more effectively with different networks based
on business requirements.
 The result is much faster time-to-service, as what once took of the world. Our strong footprint in China, with a nationwide
days or weeks can now be done in minutes. Other benefits network and over 510 IDCs, allows us to provide premium
include simpler DevOps infrastructure, lower administrative China access, perfectly suited to multinational enterprises with
burden and more effective cost control. operations or partners in China.

That’s not the end of the story. SaaS hosting is increasingly It’s easy to overlook any shortcomings when things are going
important, and becoming an integral component of business well. However, enterprises and public sector organisations
infrastructure. However, security and performance remain top- can’t afford to take any chances when disaster strikes. With
of-mind for both SaaS providers and their customers, as service CTG, they don’t have to.
availability is critical to their success.
In fact, disaster recovery becomes easier and less expensive,
China Telecom Global offers the tools that businesses need as data can be mirrored at multiple redundant sites within
to efficiently deliver internet-based content to geographically CTG’s extensive network of IDCs all over the world. These
distributed end-points across the world, including China. For IDCs are equipped with multilateral security controls, and
example, you could deploy your CDN network on dedicated protected by 24x7 environmental control monitoring and alerts,
cloud servers managed by China Telecom, and deliver your dry pipe fire suppression systems, as well as global disaster
content to last mile networks without relying on third-party recovery solutions.
transit providers and their routing policies.
Don’t Go It Alone
When streaming low-latency content, such as software As the Gartner report points out, “...cloud IaaS is one of the
downloads, CTG’s cloud-based CDN solution can help you fastest-growing areas of cloud computing adoption”.4 Moreover,
utilise caching to reduce hosting bandwidth. This helps to although today most organisations only use cloud IaaS for a
prevent service interruptions and improves security. Which, in portion of their workloads, the percentage is growing.
turn, ensures superior content delivery performance when you
need it most. Therefore, it is critical for enterprises to look at any potential
provider’s technical characteristics and business model, to
Business-to-business organisations face a different set of determine whether it is the right choice.
challenges compared to their consumer-facing counterparts.
One of them is quickly establishing reliable connections There is no reason to embark on a cloud journey alone. A
between their trading partners, without deploying the proprietary cloud service partner like CTG can help navigate infrastructure
software at every end-point in their trading community. They challenges, maximise opportunities and mitigate risks, leaving a
need an IaaS platform that helps enterprises to create agile company free to focus on its growth ambitions and strategies.
infrastructures, where partnerships can be quickly formed and
scaled to achieve efficiencies based on market demands.

As one of the world’s largest fixed and mobile service operators,

China Telecom is perfectly positioned to be a partner for
internet connectivity. Our network of 176 PoPs in 33 countries
and regions, offers easy access to your portal from every part
4 l The Future Of IaaS Is In The Cloud

1
Gartner Inc., Gartner Press Release, https://www.gartner.com/newsroom/id/3871416, 12 April, 2018
2-4
Gartner Inc., Technology Insight for Cloud Infrastructure as a Service, 4 May 2017, G00319911
 Source: Gartner Research, G00319911,
Lydia Leong, 4 May 2017

Technology Insight for Cloud Infrastructure as a Service

Cloud infrastructure as a service provides self-service, Cloud IaaS is not a commodity and has an extremely fast
on-demand access to infrastructure resources. Enterprise innovation cycle.
architecture and technology innovation leaders can use it to
• Adopt market-leading integrated IaaS and PaaS providers,
improve business agility and developer productivity, reduce
such as Amazon Web Services (AWS) or Microsoft Azure,
costs, and enable IT transformation.
when public cloud services are an option, in order to
Key Findings maximize access to innovative capabilities and achieve
• Cloud infrastructure as a service (IaaS) provides self- long-term cost-efficiency.
service, on-demand, near-real-time access to scalable Analysis
and elastic infrastructure resources. The service can be
Cloud IaaS is one of the fastest-growing areas of cloud
delivered by an internal IT organization or by an external
computing adoption. It is a maturing technology with
service provider. The resources may be single-tenant or
mainstream adoption. Although most organizations use cloud
multitenant, and can be hosted either on the customer
IaaS for only a portion of their workloads, the percentage of
premises or in an external data center. The offering can be
workloads in cloud IaaS is approximately 15% and growing
industrialized or bespoke (custom-made). Cloud IaaS can
rapidly.
be used for a broad range of workloads and use cases; it is
a maturing technology with mainstream adoption. Definition
Cloud IaaS is a standardized, highly automated offering where
• Cloud IaaS infrastructure resources are “self-managed”; that
compute resources, complemented by storage and networking
is, the subscriber (customer) is responsible for the operating
capabilities, are owned by a service provider and offered to
system (OS) and the layers above, including the middleware
the customer on demand. The resources are scalable and
and application layers, and all associated security. The
elastic in near real time and are metered by use. Self-service
subscriber may outsource this management; many IaaS
interfaces are exposed directly to the customer, including an
providers offer managed services that can be bundled with
API and a graphical user interface (GUI). The resources may
their offerings. However, optimal use of cloud IaaS requires
be single- or multitenant, and are hosted either by the service
somewhat different skills and disciplines.
provider, or on-premises in the customer’s data center.

Recommendations Description
Enterprise architecture and technology innovation leaders Cloud computing is a style of computing in which scalable and
responsible for cloud computing should: elastic IT-enabled capabilities are delivered as a service using
internet technologies. Cloud IaaS is a type of cloud computing
The Future Of IaaS Is In The Cloud l 5

• Use cloud IaaS to gain access to new IT capabilities, service; it parallels the infrastructure and data center initiatives
improve business agility, improve developer productivity and of IT. It is part of a range of cloud deployment options, as
drive IT transformation. Cost reductions are possible, but illustrated in Figure 1.
should probably be a secondary consideration. Rethink the
application life cycle, across development and operations, to Gartner draws a distinction between cloud infrastructure as a
maximize benefits. service, and cloud infrastructure as a technology platform; we
call the latter “cloud-enabled system infrastructure” (CESI). In
• Evaluate providers (including internal IT organizations) on cloud IaaS, the capabilities of a CESI are directly exposed to
their differentiated capabilities, as well as their ability to the subscriber through self-service. However, other services,
rapidly deliver new IaaS capabilities at a competitive cost. including noncloud services, may be delivered on top of a
CESI; examples include cloud-enabled managed hosting, data
 center outsourcing and disaster recovery. (See “Technology that delivers the service; it may be the subscriber’s internal IT
Overview for Cloud-Enabled System Infrastructure,” “Don’t organization, or it may be via an external service provider.
Be Fooled by Offerings Falsely Masquerading as Cloud
Infrastructure as a Service” and “Five Things That Private Cloud The following components are normally included in a cloud
Is Not” for more information on this distinction.) IaaS offering:

Gartner also holds to a strict definition of what constitutes cloud • Data center. Unless the subscriber has chosen an
IaaS. This is important because of the division of responsibilities IaaS offering that is deployed in its own data center or a
between the provider and the customer (regardless of whether third-party data center (such as a colocation facility), the
the provider is internal IT or an external service provider), as provider will host the infrastructure in its data center. The
well as the benefits derived. We describe these distinctions provider may own or lease its data center, or it may use a
in greater detail in “Four Types of Cloud Computing Define a colocation facility; regardless of the mode of ownership, it
Spectrum of Cloud Value.” is responsible for ensuring that the physical environment
meets the service delivery commitments.
Components of Cloud IaaS
The “subscriber” is the entity that receives the service. A • Physical hardware. The service provider will operate all

subscriber may be an entire business, a business unit, a team or the hardware associated with the offering, such as servers,

(rarely) an individual. A subscriber may have multiple “end users” storage arrays and network devices. The provider normally

– that are using the service. The “service provider” is the entity chooses all of the hardware used – unless it is building a
custom private cloud IaaS offering for a specific subscriber.

figure 1. Cloud Deployment Options

6 l The Future Of IaaS Is In The Cloud

Source: Gartner (May 2017)

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The provider normally owns or leases all of the equipment, • Wide-area network (WAN) connectivity. When the
although some providers may permit arrangements in which offering is hosted in the provider’s data center, the provider
the subscriber owns or leases the equipment. will normally offer internet bandwidth, as well as a means
of connecting the cloud IaaS offering to the subscriber’s
• Compute instances. A compute instance can either be a chosen telecommunications provider, so that the subscriber
virtual machine (VM) or a bare-metal (nonvirtualized) server. can obtain private connectivity. The provider is responsible
Cloud IaaS offerings are normally delivered on VMs, but for operating its network. If the offering is hosted in the
some offerings may also include an option for bare metal. subscriber’s data center, the subscriber is normally
When VMs are offered, the service provider is responsible responsible for the WAN.
for operating the virtualization management and hypervisor
layer. However, the subscriber is normally responsible for • Control plane and self-service interfaces. The provider
everything at the OS layer and above. Some providers may is responsible for all orchestration and automation for the
also offer a container service for OS containers; containers cloud IaaS offering itself. It will normally expose self-service
typically run within a compute instance. interfaces to the subscriber in the form of a web-based
portal and an API. (The subscriber can then use the API to
• Image catalog. When a compute instance is provisioned, implement additional automation.)
it needs an OS. An image catalog contains, at minimum,
OS images that are supplied by the provider – for instance, • Identity and access management (IAM). The provider will
Linux and Windows images. More advanced image catalogs provide mechanisms for logging into the web-based portal,
may contain images that are supplied by the subscriber or and authenticating against the API. Most providers allow
third parties; images may include other software in addition multiple users to share a single account, with resource
to the OS. If a provider supports a template mechanism permissions controlled via role-based access control
(blueprints that can automate the provisioning of an (RBAC). IAM feature sets and quality of security vary
entire solution), there may also be a template catalog; a widely.
template may contain multiple images and infrastructure
• Technical support. A provider will normally offer customer
configurations. When coupled with subscription and billing
support (billing and administrative support), as part of
mechanisms for third-party software, the catalog becomes a
the offering. However, a provider may offer multiple
marketplace.
options for technical support, with higher levels of support
• Storage. A compute instance needs access to files or incurring larger costs. Note that technical support is distinct
block storage; at minimum, it requires a boot volume with from managed and professional services. For external
an operating system. Storage may be associated with a providers, the most basic form of technical support may be
specific compute instance, or it may be independent of a “community” support, where customers can ask questions
compute instance. This type of storage is distinct from what in the support forums. We recommend that customers
is commonly known as “cloud storage,” which is object- elect to buy enterprise-grade support when using an
based, API-accessible storage. The provider is responsible external provider.
for storage operations. In most cases, however, the provider
Cloud IaaS is not a commodity. While cloud IaaS offerings will
is not responsible for activities such as data backup, which
all contain the basic capability to provision compute, storage
remain the subscriber’s responsibility.
and networking resources, there is dramatic variance in the
The Future Of IaaS Is In The Cloud l 7

• Local-area network (LAN). There must be a LAN between number of available options, quality of implementation, speed
compute instances, as well as a LAN between compute of provisioning, quality of user experience, infrastructure
instances and any network-attached storage devices; this availability and performance. Furthermore, cloud IaaS offerings
may be two networks, or a single converged network. The may contain extensive additional functionality, encompassing
provider is responsible for LAN operations. Many providers a range of IT operations management capabilities, such
offer higher-level networking functions as well, such as load as monitoring and user-controlled orchestration, as well as
balancing, network security and DNS. capabilities for deploying and managing middleware and
applications in an automated fashion.
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Many cloud IaaS providers also offer cloud software 2 Where is it located? Cloud IaaS may be delivered on-
infrastructure services, which typically exist somewhere on premises in the subscriber’s data center, in a third-party
the spectrum between IaaS and platform as a service (PaaS). data center of the subscriber’s choice, or in the cloud
A common offering is IaaS+, where a customer can one-click IaaS provider’s data center. In other words, it can be on-
provision a VM with a certain software package preinstalled. premises or off-premises.
This may be part of a software marketplace, which makes it
3 What is shared? The data center, networking, storage
easier for customers to obtain and license software for the cloud
and compute resources can potentially be shared among
IaaS environment.
multiple subscribers. Unless cloud IaaS is being delivered

An increasing number of cloud IaaS providers also offer a range on the subscriber’s premises, all of these aspects are

of PaaS capabilities. When IaaS and PaaS are offered in a typically shared – they are multitenant. However, many

fully integrated environment, customers obtain much greater service providers offer the option of single-tenant compute

value than with cloud IaaS alone. Integrated IaaS and PaaS (sometimes called “dedicated compute”) within an

(IaaS+PaaS) are discussed in detail in “Technology Insight for otherwise multitenant offering.

Integrated IaaS and PaaS.” In theory, it would be possible for an

Typically, “private cloud” refers to single-tenant offerings –
IT organization to build such a service; future technologies such
offerings that are on the subscriber’s premises, or offerings
as Microsoft Azure Stack may enable such internal offerings.
that are delivered by an internal IT organization. “Public
cloud” refers to multitenant offerings; a special form of this
Cloud IaaS is normally a self-managed offering – that is, the
is the “community cloud,” a multitenant offering where the
service provider is responsible for everything below the OS
subscribers have explicitly chosen to share the offering with
layer, and the subscriber is responsible for managing the OS
one another. Some providers will call an offering “private” if
and everything above it, such as middleware and applications. A
the compute is single-tenant, even though all other aspects
subscriber can choose to add managed services for the OS and
are shared. However, Gartner does not consider any offerings
other components that are not part of the core IaaS offering; in
in which the data center, network and storage are shared to
most cases, they can choose to obtain those managed services
be “private cloud,” regardless of whether or not single-tenant
from whatever provider they want, including potentially the cloud
compute is available.
IaaS provider. Some providers do bundle mandatory managed
services along with a cloud IaaS offering; this is particularly
Generally, external providers do not consistently (and
common with internal private clouds. However, subscribers
accurately) use the terms “public” and “private,” and likewise,
often prefer managed services to be unbundled, particularly in
there is no consistency at all in the use of the term “virtual
development environments where bundled managed services
private”; always ask providers to specify exactly what is
may unnecessarily increase costs.
shared. Note that “virtual private cloud” is used in an arbitrary

Public Versus Private Cloud IaaS way when providers brand offerings; do not assume that
offerings called “virtual private cloud” even belong to the same
Unfortunately, the industry does not tend to use the terms
general category of technology.
“public cloud” and “private cloud” in a consistent fashion. When
describing cloud IaaS, there are three important dimensions to
Table 1 summarizes the common situations and relevant
consider:
terminology as it is used in this research.
8 l The Future Of IaaS Is In The Cloud

1 Who operates it? Cloud IaaS may be outsourced –

delivered by an external service provider; or it may be
insourced – delivered by an internal IT organization (in
which case that IT organization is the “service provider”).
The operator is responsible for everything below the
OS layer.
Table 1. Common Types of Cloud IaaS

Type Operated By Location Shared

Internal private cloud Internal IT Subscriber None
Outsourced private cloud Provider Subscriber None
Hosted private cloud Provider Provider Data center, network
Virtual private cloud Provider Provider No consistent use of terminology in industry
Public cloud with dedicated compute Provider Provider Data center, network, storage
Public cloud Provider Provider Data center, network, storage, compute
Community cloud Provider Provider Same as public, but community-only sharing

Source: Gartner (May 2017)

Internal Private Cloud Some internal IT organizations may create a hybrid cloud
service by combining one or more IaaS offerings, likely including
True internal private cloud IaaS has all the attributes of cloud
an internal private cloud, and offering unified self-service and
infrastructure – but customers often call what they have a
governance. (See “Successful Hybrid Cloud Deployment Requires
“private cloud” even when it does not have all such attributes.
Maturity in Four Key Areas” for guidance.)
(A recent Gartner survey indicated that 42% of respondents
believed they had an internal private cloud, but only 7% said
Industrialized Versus Bespoke IaaS Offerings
they have all the attributes of cloud infrastructure.)
A public cloud IaaS offering is always industrialized – it is a
completely standardized offering where every subscriber receives
Cloud-inspired infrastructure provides some, but not all, of
the exact same set of capabilities. A service provider may offer
the benefits of true cloud infrastructure, but does not have
additional customization options on top of the standardized
all the attributes that are definitional to cloud computing.
offering, but the core of the offering is always industrialized.
Cloud-inspired infrastructure is typically used to modernize
infrastructure for an existing portfolio of applications,
Private and community cloud IaaS offerings may be
thus serving a valuable function. However, cloud-inspired
industrialized, or they may be bespoke. An industrialized offering
infrastructure should not be confused with cloud IaaS.
is built and operated exactly the same for every customer; in
Hybrid Cloud IaaS fact, it may simply be a single-tenant version of the provider’s
public cloud IaaS offering. However, many service providers
Providers may use the word “hybrid cloud” in a variety of ways
will build and operate a bespoke IaaS offering for a customer.
– most often to refer to a combination of VMs and bare-metal
A bespoke offering may be custom-designed, custom-built, or
servers, or managed hosting on a cloud IaaS platform. Gartner
custom-operated, depending on what the provider is willing
uses “hybrid cloud service” to mean a service that crosses
to offer. A bespoke offering may be based on a reference
isolation and provider boundaries – a combination of multiple
architecture, so that many customers have the same or
services. (See “Get Past the Confusion Surrounding Hybrid
substantially similar implementations. Bespoke offerings can
Cloud Computing” for our complete definition.)
typically be operated in a distinct fashion for each customer.

Hybrid cloud orchestration occurs when the integration between Bespoke offerings are often significantly more expensive than
The Future Of IaaS Is In The Cloud l 9

cloud automation domains involves a single control plane that industrialized offerings, and typically have a slower innovation

allows dynamic provisioning of workloads across the different cycle than industrialized offerings.

cloud automation domains. Some providers will offer such

Customer Responsibilities
solutions themselves. Such software must generally explicitly
In order to use cloud IaaS effectively, the subscriber needs to
support particular cloud IaaS providers.
provide the following functions:

Some providers offer a single platform that can be consistently

• Vendor and sourcing management. The subscriber
deployed and managed – regardless of whether it is multitenant
needs to have an employee who is responsible for ensuring
or single-tenant, and regardless of its location. These providers
that the provider delivers the promised service offering,
may be considered as offering a hybrid cloud service if their
at the agreed-upon service levels. There must be a point
services are consumed both on-premises and off-premises.
 of contact for personnel within the organization that want known as cloud management platforms (CMPs), typically
to obtain access to the cloud IaaS offering. When using offer a customizable portal and service catalog designed
an external provider, someone must be responsible for for end users. Examples of CMPs include CliQr, Scalr
managing the contract, whatever accounts are under that and ServiceMesh. (See “IaaS Cloud Management Tool
contract, tracking the overall spend on the offering and Selection Methodology” for more on management tools.)
negotiating discounts against this consolidated spend.
• Capacity management. Capacity management is a
The procurement department also needs to ensure that
critical element for cost control and budget forecasting.
the subscriber is in compliance with software licensing
Organizations must take care to rightsize the infrastructure
agreements with any commercial software vendors whose
to the application, in order to control recurring costs and
products are being used on the cloud infrastructure, even if
to eliminate infrastructure that is no longer being used.
this is an internal private cloud.
In internal private clouds, financial management may be
• Subject matter expertise. The subscriber needs to have built into the CMP or available as an add-on to the CMP;
a subject-matter expert on this cloud IaaS offering. This capacity planning is much more critical for internal private
is typically an architect who is able to advise users on the clouds and other IaaS environments where overall capacity
best way to use the IaaS platform. This architect may create cannot be expanded on demand. Most customers of
policies, best-practice guidelines, reference architectures external cloud IaaS providers will want a cost management
and templates for the organization. Larger organizations tool, such as Cloudyn, CloudHealth or RightScale Cloud
may want to build a cloud IaaS center of excellence (COE) Analytics (see “Innovation Insight for Cloud Service
that contains these architects. Organizations that are new to Expense Management Tools” for details).
cloud IaaS may want to make use of consultants until they
Customers that do not want to be responsible for managing the
develop their own internal expertise.
offering can use a third-party-managed service provider. See
• IT administration. The subscriber is responsible for the OS “Getting Help With Implementing Cloud IaaS” for details.
layer and above, responsible for security and compliance,
and responsible for their own data. The subscriber is Optimal use of cloud IaaS and extracting the maximum benefits
responsible for their application architecture, implementation from cloud IaaS require the development of new skills, both in
and operations, including application availability and development and in operations – and often, in the convergence
performance. Consequently, the subscriber must provide of those two disciplines in DevOps. Organizations should not
IT administrators that will assume this responsibility. The underestimate training needs, process impacts, requirements
subscriber may choose to outsource this. Security is for new management tools and the impact on career paths.
always a shared responsibility between the subscriber and Note that these impacts are not confined to the IT organization;
provider (see “Staying Secure in the Cloud Is a Shared they may impact finance, sourcing and procurement
Responsibility”). The cloud IaaS provider will normally organizations, legal and regulatory compliance functions, and
provide security at the physical data center, hardware and the interaction of business management with IT management.
virtualization layers. The provider may also offer some See “Implementing Governance for Public Cloud IaaS and
additional security controls, particularly at the network level. PaaS” for initial guidance.
However, it is the responsibility of the subscriber to correctly
Pricing
configure those controls, as well as add whatever additional
10 l The Future Of IaaS Is In The Cloud

controls are necessary. In cloud IaaS, resources are typically metered on an hourly
basis, although the external provider market is moving toward
• Governance. The subscriber is responsible for controlling a per-minute metering increment. Providers normally charge
its users. Most subscribers have two types of users – for compute resources provisioned, storage consumed and
administrators (normally IT operations personnel) and network bandwidth consumed, and may also charge for
technical end users (such as developers, scientists and additional capabilities such as load balancing and monitoring.
engineers). If only administrators use the offering, it might
be unnecessary to implement a governance tool. However, if The cost of internal private clouds varies significantly; see
the subscriber has end users that directly consume the IaaS “Calculating Per-VM Costs in Private Clouds” for guidance
offering, then a governance tool – which is used to control on how IT organizations can price IaaS capabilities for the
and track what end users do – may be useful. Such tools, purposes of chargeback or showback.
It can be difficult to compare the relative value of multiple cloud its e-commerce website entirely hosted in cloud IaaS, but
IaaS providers, because different offerings contain different have its back-end Oracle RAC database cluster in a nearby
capabilities. Furthermore, performance varies enormously colocation data center that is cross-connected with the cloud
between offerings, and providers may have multiple options for provider’s data center. For additional information, see “Hybrid
compute, storage and networking performance. In particular, be Architectures for Cloud Computing.”
wary of a provider’s definition of a “vCPU” or “CPU core”; some
providers oversubscribe their CPUs, and some providers have As is true with all data center environments, when using cloud
newer, higher-performing processors, so one provider’s CPU is IaaS, attention needs to be paid to performance, availability
not necessarily equivalent to another provider’s CPU. and security when developing the system architecture – and
the right offering needs to be chosen to address these needs.
Comparing the cost of multiple solutions should be done
on an application-specific basis, since every application will Common Use Cases
consume different capabilities of the cloud IaaS offering, The following use cases are common:
and some workloads may be a more cost-effective fit on
particular infrastructure configurations. Organizations that are • Development environments. Cloud IaaS is often used
comparing the relative costs of multiple offerings – without for application development and testing, and may be used
particular applications in mind – should choose a set of for preproduction staging environments as well. Some
common application patterns and price those patterns. Most organizations that adopt cloud IaaS for this purpose simply
organizations do not choose the lowest-cost provider, but rather use it as a way to assist IT operations in provisioning
the provider that delivers the greatest value. development infrastructure more rapidly. Most, however,
directly allow developers to self-service, either via the
Cost forecasting for cloud IaaS should be done on a scenario- offering’s native portal or API, or via a governance
planning basis; see “Can You Save Money Migrating to Cloud tool. Most organizations first adopt cloud IaaS for the
IaaS?” for guidance. To compare the cost of public cloud IaaS development of new applications; over time, it becomes
to internal solutions, use “Calculating and Comparing Data an integral part of the full life cycle of those applications,
Center and Public Cloud IaaS Costs.” including production deployment.

Benefits and Uses • SaaS hosting. Many SaaS providers and vendors that
offer hosted software use a cloud IaaS offering from a
Cloud IaaS can be used to host both new and existing
service provider. This can be one of the first ways that an
workloads. Certain workload patterns may be better served
organization ends up adopting cloud IaaS. In some cases,
by different cloud IaaS offerings, and it is common for large
the IaaS contract is held by the subscriber, while in other
enterprises to have two to four cloud IaaS providers in order to
cases, it is held by the provider.
achieve optimal fit to each use case. Subscribers do not need
to rearchitect their applications to use cloud IaaS. However, • Consumer-facing hosting. Cloud IaaS is often used
applications that are architected to be cloud-native, using cloud to host consumer-facing content and applications, such
transaction processing (TP) principles, are better able to take as e-marketing, e-commerce, e-CRM and gaming. It
advantage of the traits of cloud IaaS. (See “How to Architect and is frequently used to host social and mobile initiatives,
Design Cloud-Native Applications” and “A Guidance Framework including the back end of mobile applications and Internet
The Future Of IaaS Is In The Cloud l 11

for Architecting Highly Available Cloud-Native Applications.”) of Things (IoT) applications. These use cases are often
mission-critical or otherwise highly visible. Nevertheless,
Most applications that perform well within a virtualized
they are often among the initial use cases when
environment will perform well in cloud IaaS; use of bare-metal
organizations adopt cloud IaaS, as the business often
servers within cloud IaaS can also address the needs of
considers these projects to be urgent – driving the use of
applications that do not perform well under virtualization. Some
an external cloud IaaS provider in order to meet immediate
applications that have components that cannot be hosted in
infrastructure needs. Digital marketing agencies also often
cloud IaaS for technical reasons can be split between cloud
prefer to work with external cloud IaaS providers and
IaaS and dedicated equipment in cross-connected colocation,
may be able to deliver projects more quickly when these
allowing the components to communicate within LAN latencies.
providers are used.
For example, an organization might have the front end of
 • Business-to-business (B2B) hosting. Cloud IaaS is often other ERP solutions are the most common examples of
used to host B2B content and applications, similar to the such applications. While some organizations run enterprise
consumer-facing hosting use case. Extranet portals, such as applications in production on cloud IaaS – often using a
supply chain portals, are also common. B2B data services, service provider that specializes in a particular application,
mobile applications and IoT applications are also common such as SAP – organizations are more likely to use cloud
use cases. IaaS for the development, testing and staging of these
kinds of applications.
• Batch computing. Cloud IaaS is very useful for high-
performance computing (HPC), “big data” analytics and • Disaster recovery (DR). Organizations that deploy
other workloads that require large amounts of capacity production applications in cloud IaaS are likely to perform
on demand. Internet of Things applications are also DR for those applications on cloud IaaS as well, usually
increasingly common. Although this is a particularly with the same provider. However, organizations may also
compelling use case for use of an external cloud IaaS choose to use cloud-based DR for noncloud workloads.
provider, it is also a common use for an internal private
Although this document does not cover use cases for stand-
cloud. For academic institutions and other scientific,
alone, object-based cloud storage – such as backup and
engineering and research organizations, batch computing
archiving – it should be noted that many organizations adopt
is often the initial cloud IaaS use case. An external cloud
object-based cloud storage as part of a more general adoption
IaaS provider is often used to augment existing internal
of cloud IaaS.
capacity; high-priority or “overflow” projects may be placed
on external cloud IaaS.
Adoption Rate
• General business applications. Cloud IaaS is increasingly The use of cloud IaaS is broadly mainstream, with usage
used to host general business applications – typically, the patterns closely correlated to organization size and technology
kinds of applications that an organization would deploy into aggressiveness. It is moving up the Slope of Enlightenment in
an internal virtualized environment. There is an abundance Gartner’s “Hype Cycle for Cloud Computing, 2016.”
of these kinds of workloads in the internal data centers of
most businesses. These applications are typically web- Gartner uses a “Type ABC” classification framework for
based, and built using modern architectures, frameworks and technology aggressiveness for organizations:
architectures – they may be internally developed or from a
vendor. The application users are usually located within the • Type A focuses on competitive advantage.

business. Many such workloads are small. Some of these

• Type B focuses on improved productivity.
applications are mission-critical, but many are not. Examples
include intranet sites; collaboration and content management • Type C focuses on containing IT costs.
applications such as wikis, Microsoft Exchange and Microsoft
SharePoint; and many business process applications. The typical adoption patterns, in late 2016, are:
Many organizations adopt cloud IaaS for these kinds of
applications gradually, starting with new applications of this • Type A enterprises have likely used cloud IaaS for at least

type; over time, existing applications may be migrated onto five years. They make extensive use of public cloud IaaS,

cloud IaaS. Large-scale migrations may occur during data usually from an IaaS+PaaS provider, for digital business
12 l The Future Of IaaS Is In The Cloud

center or infrastructure consolidation projects. initiatives. They have likely built private cloud infrastructure,
but might consider it to be a failure, usually because it has
• Enterprise applications. Cloud IaaS is occasionally used not met developer needs; there are some, however, that
to host mission-critical enterprise applications, usually in are very successful with private cloud services that are
the form of a complex software suite from a vendor. Such purpose-built for particular needs. They may be considering
applications typically consume large amounts of resources a long-term transformation to drive greater agility via public
in a scale-up fashion, are performance-sensitive and contain cloud services, but if not, they typically expect to maintain
highly sensitive data; they are a modest percentage of internal data centers for many years to come.
the workloads found in the internal data centers of most
traditional businesses, but they are among the most critical. • Type A midmarket businesses and Type B enterprises

SAP, Oracle E-Business Suite, Microsoft Dynamics and have a similar adoption pattern to Type A enterprises, but
 they have not adopted as quickly or as aggressively. They to allow the subscriber to evaluate the quality of the solution
are likely to have used cloud IaaS for two or three years, and and any attendant risks. Furthermore, because there is also
to have digital business initiatives in public cloud IaaS. They a loss of insight – the lack of control over the platform also
are less likely to have built a true private cloud, but may have means lack of visibility into issues and an understanding of
cloud-inspired infrastructure. They may be considering a when any problems might be resolved – the provider needs
multiyear migration of a substantial percentage of their data to offer rapid, transparent communications.
center infrastructure to public cloud IaaS; some will do so for
• Security. The underlying IaaS platform must be adequately
agility, while others will do so for efficiency.
secured by the provider, but the subscriber needs to
• Type B midmarket businesses have typically done some configure the available security controls and may need
digital initiatives in public cloud IaaS, and have cloud- to add additional security controls. The subscriber is also
inspired infrastructure internally. However, an increasing responsible for regulatory compliance. Data security can
number of these businesses are considering migrating potentially be addressed via encryption (see “Simplify
their internal data centers to public cloud IaaS, often in Operations and Compliance in the Cloud by Encrypting
conjunction with managed services – a form of cloud- Sensitive Data”); subscribers can implement this themselves,
enabled outsourcing. This is typically done for classic but service providers are increasingly offering integrated
outsourcing reasons – cost-efficiency, quicker access to options for encrypting data at rest and in motion. The
new technology capabilities and access to skills. subscriber also needs to manage IT operations and end-
user access to the offering. Internal private clouds need
• Type C midmarket businesses and enterprises have security just as much as service provider IaaS offerings,
been cautious about their entry into public cloud IaaS, and since the environment still needs to be fully protected against
are likely to only have virtualization internally (even if they any breach of internal security. “How to Make Cloud IaaS
call it a “private cloud”). These organizations are increasingly Workloads More Secure Than Your Own Data Center”
looking at migrating their data centers to public cloud IaaS provides some general guidance for transforming security.
for cost-efficiency, although many may find that the cost
savings are minimal. They may also have some digital • Data location. Regardless of the type of cloud IaaS, the
initiatives that are a good fit for public cloud IaaS. subscriber always chooses where the data resides. If an
external service provider is used, the exact address of the
Guidance for getting started with public cloud IaaS is given in data center might be unknown, but the provider will typically
“How to Begin Using Public Cloud Infrastructure as a Service.” specify which metropolitan area it is located in. The provider
typically does not have the right to move the data between
Risks
metropolitan areas without the customer’s permission, so the
IT organizations considering cloud IaaS typically have a number
customer always knows that the data will not cross country
of concerns; some of these may be personal to individuals or
boundaries. (Note that object-based cloud storage is an
to the IT operations organization, while others represent actual
exception; customers should determine the restrictions on
technical and business risks. Common concerns and risks
replication locations.) Customers may have specific location
include the following:
requirements, or prefer to use a non-U.S. provider, but it may
be challenging to find high-quality IaaS offerings from local
• Loss of control. When cloud IaaS is used to provide self-
providers.
The Future Of IaaS Is In The Cloud l 13

service infrastructure to technical end users, the IT operations

organization typically loses some degree of control over • Availability and performance. Availability and performance
the infrastructure, unless measures are taken to implement are functions of the subscriber’s chosen architecture, as
governance and management. When the organization uses well as the underlying cloud IaaS offering. Some cloud
an external provider for cloud IaaS, there is a further loss IaaS offerings offer greater infrastructure resilience, either
of control. The organization must depend upon the provider by default or as an option. Performance varies significantly
to ensure the IaaS platform’s availability, performance and across cloud IaaS providers, and some providers also have
security; and furthermore, is dependent upon the provider to greater variability in performance than other providers.
continue to provide a competitive feature set at a competitive Providers may offer more expensive options that provide
cost. The provider needs to provide adequate transparency higher performance or greater performance consistency.
 • Network connectivity. Organizations are often concerned Gartner provides extensive evaluation guidance for cloud IaaS
about how they will connect their network to an off-premises providers in “Evaluation Criteria for Cloud Infrastructure as a
cloud IaaS offering, how they will secure that connectivity Service.” The evaluation criteria can be used to evaluate both
and how they will mitigate any network latency issues. public and private cloud IaaS providers – including internally
Fortunately, most external cloud IaaS providers support built private clouds. We provide In-Depth Assessments,
the use of private connectivity from the customer’s choice using those criteria, of the market share leaders – Amazon
of telecommunications carrier, and an increasing number Web Services, Microsoft Azure and Google Cloud Platform.
of carriers directly offer such network connections. It is Our “Magic Quadrant for Cloud Infrastructure as a Service,
common for a customer’s cloud IaaS environment to simply Worldwide” provides an overall market assessment of the most
become a node on the customer’s Multiprotocol Label significant cloud IaaS providers. We assess providers and offer
Switching (MPLS) network. WAN optimization controllers a use-case-specific view of technical features and capabilities
from vendors such as Riverbed can be deployed as virtual in “Critical Capabilities for Public Cloud Infrastructure as a
appliances within the cloud, and carriers will increasingly Service, Worldwide.”
offer integrated acceleration as part of their cloud
connection offerings. Cloud IaaS Alternatives
Not all infrastructure requirements are best served by cloud
• Lock-in. IT managers are often concerned about becoming IaaS. Many needs are better served by a noncloud internal
“locked in” to a cloud provider, and want the ability to data center capability, such as a virtualized environment
move applications and data between environments. without self-service, a CESI used by the IT operations team
Strictly speaking, while cloud IaaS can be treated like or a simple virtual lab automation solution. Other alternatives
rented virtualization and data gravity can be overcome, include the following:
the greatest driver of lock-in is differentiated capabilities.
Adopting an external cloud IaaS provider is not like adopting • On-demand hardware lease. Organizations that need a
a server hardware vendor; it is more akin to adopting an IT more flexible model for procuring infrastructure, but are not
operations management (ITOM) software vendor, or even interested in self-service, should consider an equipment
a middleware platform vendor. Customers who extensively lease as a possible alternative. Many hardware vendors
adopt the differentiated capabilities of a CMP or service will are now open to negotiating flexible leases that allow
be more locked-in, but they will also derive greater value customers to obtain hardware in a more elastic fashion,
from the offering. The trade-off between lock-in benefits and including models where hardware is deployed on the
risks is discussed in detail in “Addressing Lock-In Concerns customer’s premises in advance of need, but the customer
With Public Cloud Infrastructure as a Service.” does not pay until the resources are used.

See “Take a Risk-Based Approach to Public Cloud IaaS” for • Dedicated hosting. Organizations that want to rent
a more comprehensive assessment of cloud IaaS risks and servers by the month, and are willing to host them in an
suggested mitigation mechanisms. See “How to Evaluate Cloud external service provider’s data center (but do not need
Service Provider Security” to understand the risk implications of cloud IaaS capabilities), should consider dedicated hosting
choosing smaller providers. from a provider such as Internap, OVH, Cogeco Peer 1 or
SingleHop. These companies typically specialize in serving
Evaluation Factors
small businesses that only have one or two servers, so
14 l The Future Of IaaS Is In The Cloud

When evaluating a cloud IaaS offering, look at both its their sales, service and support approaches are designed
technical characteristics and its business model to determine accordingly. However, they are a possible alternative for
its appropriateness for your needs. Remember that although larger organizations as well.
IaaS tries to remove many concerns from the user of the
service, the underlying implementation still strongly affects the • Cloud-enabled managed infrastructure services. A
technical traits of the service. There is considerable variance variety of managed service providers (MSPs), including
in service provider design goals, the quality of the technical managed hosting and data center outsourcing (DCO)
implementations, and the cost-effectiveness and value for providers, offer managed services on top of a CESI. These
money of those implementations. offerings vary significantly in the degree of available self-
service, elasticity and automation within the CESI platform.
Some offerings are only available in the provider’s data
 center, while others are available in the customer’s choice of I&O’s goals of reducing costs, simplifying operations, and
data center. The financial models vary, including the contract improving operational reliability and efficiency. If you do
length and who owns the equipment. Customers that want decide to use private cloud IaaS, compare its capabilities
cloudlike traits, but do not want to manage the infrastructure to market-leading integrated IaaS+PaaS providers; ensure
themselves, may find these offerings attractive. that your private cloud IaaS fully meets the needs of end
users, such as developers, researchers and engineers.
• Infrastructure utility services (IUS). Some DCO
providers offer IUS – hosted, virtualized, usually multitenant Representative Providers
infrastructure that is designed to host a specific application Cloud IaaS providers typically fall into the following categories:
– most commonly SAP. There is usually some elasticity
in such offerings and they may be delivered using an • Internal IT organizations. These often provide internal
underlying CESI. private cloud IaaS to users within their business. However,
central IT organizations may also provide cloud IaaS
Consult “Toolkit: Decision-Making Model for Data Center to other businesses, such as subsidiaries, partners,
Service Sourcing Strategy” for a broader view of the range other organizations within a community (for instance, a
of infrastructure outsourcing options. See “How to Select the government agency may provide cloud IaaS to another
Correct Data Center Option for the Digital World” for a broader agency), or customers who are purchasing something else
look at infrastructure strategy. “15 Reasons Not to Migrate from this business and are also interested in cloud IaaS.
Your Data Center to Public Cloud Infrastructure as a Service”
provides a list of factors that suggest that public cloud IaaS is • Cloud-native service providers. Some cloud IaaS
the wrong solution. providers have directly entered the cloud IaaS business
without a previous significant history in hosting or IT
Recommendations services. AWS, Google and Microsoft are cloud-native
Enterprise architecture and technology innovation leaders should: service providers – as are many startups. Cloud-native
providers typically have an industrialized offering, but may
• Use cloud IaaS to drive developer productivity and facilitate have bespoke offerings as well.
innovation, and thus deliver faster time to value, especially
for Mode 2 projects. Use public cloud integrated IaaS+PaaS • Hosters. Many cloud IaaS providers have a genesis in

to maximize access to innovative capabilities. Embrace the the colocation, mass-market hosting, dedicated hosting,

differentiated capabilities of these providers, but thoughtfully or managed hosting businesses. Several such providers

manage the lock-in risks. still retain their original business and have expanded into
cloud IaaS. There are many independent hosters, such as
• Create an internal cloud COE to provide oversight of Rackspace, but there are also many communications service
cloud computing policy, organizationwide governance, providers who have entered this market, either directly or
best practices and cloud vendor management. The COE through acquisition; examples include CenturyLink, Interoute
should serve as a cloud service broker, and provide solution and NTT. Hosters typically have an industrialized offering,
architecture assistance to projects that desire to use cloud but may also build bespoke private clouds.
services.
• Data center outsourcers. Many DCO providers, such as
• Use public-cloud-integrated IaaS+PaaS to maximize agility CSC, Fujitsu and IBM, have entered the cloud IaaS market
The Future Of IaaS Is In The Cloud l 15

and efficiency for IT modernization and transformation with industrialized offerings. Most DCO providers, including
projects. Use market-leading providers to minimize risks. Dell, HCL Technologies, Infosys, Tata Consultancy Services
However, do not assume that migrating to IaaS will reduce (TCS) and Wipro, will build bespoke private clouds.
costs unless a shift is made to greater standardization
and automation. • System integrators (SIs), value-added resellers (VARs)
and MSPs. SIs, VARs and MSPs may build bespoke
• Explore the use of cloud-inspired infrastructure on-premises private clouds for customers. Some VARs and MSPs
for Mode 1 projects that are not a good fit for public cloud have also entered the market with industrialized offerings;
IaaS, rather than building private cloud infrastructure. notable examples include CDW and Dimension Data.
Cloud-inspired infrastructure is often sufficient to achieve
 About China Telecom
Global Limited
China Telecommunications Corporation (“China Telecom”), Leveraging on its abundant resources in mainland China, CTG
as one of the world’s largest providers of integrated connects the Asia Pacific region and the world. It has gradually
telecommunication services has been striving to enhance become a world-class integrated information service provider.
its capabilities in managing global operation, so as to keep Targeting international carriers, multinational corporation
pace with changing times. In November 2000, China Telecom clients and overseas Chinese, CTG provides customised
established a representative office in America, an initial and cost-effective integrated communication solutions and
step in growing its international business. Since then, China diversified telecom services to cater to their global business
Telecom has expanded its international footprint rapidly with needs. Its services include internet direct access, internet
the establishment of China Telecom (Hong Kong) International transit, data services, broadband, unified communications,
Limited, China Telecom Americas Corporation, China Telecom internet data centre, cloud computing, ICT services, fixed and
(Europe) Limited and China Telecom (Africa and Middle East) mobile voice and value-added services, professional services
Limited. Today, China Telecom has branches and affiliates in and industry solutions, telecom operation consultancy and
39 countries and regions, as well as 176 overseas PoPs, and service outsourcing.
owns more than 42T capacities in international connectivity
bandwidth and intercontinental capacity. By tapping into its Please contact your CTG sales representative for more details.
network resources of 39 submarine cables (China Telecom was Or, you may send an email to: cs@chinatelecomglobal.com.
involved in the construction of more than 10 of those cables)
and leveraging direct connection to more than 10 neighbouring To learn more about us, you may visit our corporate website:
countries and regions via terrestrial cables, China Telecom has www.chinatelecomglobal.com
forged its global layout of service network and network capacity

Driven by our determination to serve the ever growing demands

from integrated operation of international telecommunication
business, and to enhance our global service quality as well as
to accelerate the overseas business expansion, China Telecom
resolved to integrate our international business resources and
human resources to establish China Telecom Global Limited
(“CTG”) which is headquartered in Hong Kong since 2012.
16 l The Future Of IaaS Is In The Cloud

The Future Of IaaS Is In The Cloud is published by China Telecom Global. Editorial supplied by China Telecom Global is independent of Gartner analysis. All Gartner research
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