Global Digital Infrastructure Trends

Global Digital Infrastructure Trends

Posted on 20. Mar, 2018 by in Cloud, Developement, Hosting, internet, linux, Open stack, Programming

Global Digital Infrastructure Trends

March 9, 2018

In This Issue

Optimizing the Cloud Procurement Process – In order for the benefits of cloud to be fully realized, the procurement process must evolve from a high-touch physical model to a more hands-off approach. 451 Research has developed a five-stage cloud procurement maturity model that explains the necessary evolution of the procurement process.

Data, Data, Everywhere – One of the biggest challenges facing organizations is multi-location data management. There’s no shortage of data for analysis and business intelligence, but how do you find it, manage it and exploit it?

Netflix Keeps Ahead of Competition – Original content is now a key component of streaming services, both as a reason why consumers pay for OTT video and the type of content they watch most. Netflix’s focus on original content is keeping it ahead of its competitors.

Make Room for Specialist CSPs – Cloud Service Providers (CSPs) are evolving to find their niche. Outside of the hyperscalers, smaller providers are focusing on cloud enablement and advisory services, but most enterprises still want them to provide infrastructure.

Alliance Member Update

In Case You Missed It
1. Optimizing the Cloud Procurement Process

For cloud to meet its promise, enterprises must be empowered to consume as required, innovate without delay and take chances without commitments.

Flexible pricing models help with these goals, but organizations must also change their cultures to support the cloud revolution.

Just as no single venue is the right destination for all computing workloads, a single way of consuming IT will not satisfy most customers.

Legos vs. Turnkey

Some applications warrant the ‘Lego bricks’ flexibility and control of primitives that are assembled in unique and powerful ways, while others benefit from the turnkey convenience of fully managed services – with many variations and combinations in between.

Either way, the processing power underlying the services delivered must be purchased and paid for by someone – the cloud provider, hardware vendor, managed service partner or system integrator that’s charging the enterprise for capabilities or expertise.

This ongoing procurement process has a labor overhead related to ordering, provisioning and budgeting for resources.

Considering so many resources are now ordered online through cloud APIs – and automatically reconciled with billing systems on the back end – this overhead should be diminishing. However, culture and complexity are holding back fully automated, flexible and ongoing procurement.

Traditional procurement departments and processes based upon depreciable capital assets and enterprise license agreements are impeding the use of consumption-based models.

A cloud-procurement maturity model (see table below) offers a view of how procurement practices are changing and which milestones – in terms of people, process, technology and business strategy – must be reached on the way to ‘infrastructure invisibility.’

Level 1 is the traditional world of IT procurement: fixed and inflexible, capital-led, manually procured.

Level 5 represents the fully automated utility: not just pay-as-you-go, but optimized-as-you-go – dynamically purchased, intelligently forecasted, automatically provisioned.

Level 1 has a high procurement overhead, while level 5 is invisible – it just works, with little or no human intervention.

451 Research believes most companies today are at level 3 or lower.

Proceeding from level 1 to 5 requires a culture shift, where users are empowered to consume what they want as long as it adds business value. For cloud to meet its promise, it must be plug-and-play.

Enterprises should plan to increase their maturity using this model, and cloud service providers must support enterprises in this objective.

Reassurance that bills are as low as possible is of huge value to cost-conscious CIOs, especially if it can be done across multiple clouds, applications and technologies.


The old-fashioned way of IT procurement is holding back businesses and revenue. It’s a balance of risk and reward. Empowering individuals might increase cloud spending, but there are huge rewards, and companies that are slow to act due to lack of flexibility will suffer.

If cost and security can be intelligently and automatically optimized and controlled across multiple clouds, risks can be mitigated and are therefore worth taking.

The procurement maturity model can help enterprises understand this balancing act between cost and value, opportunity and risk.

Join Us for a Member Exclusive Webinar
Insights From the 451 Alliance:
Top Storage Pain Points and Emerging Technologies
Date & Time: Mar 28, 2018 at 11:30 AM EDT
Despite the emergence of innovative public cloud storage services and space saving technologies such as inline deduplication and compression, data and capacity growth are still the top storage problems facing infrastructure professionals.Though we are expecting to see modest storage budget increases for most organizations (mean increase of 13%), members clearly want to get more value out of their storage investments. Storage upgrade and refresh operations and Support for new projects are nearly equal in terms of their impact on the growth of storage budgets.Join Henry Baltazar, VP Research, as he discusses the top storage pain points facing 451 Alliance members, as well as the potential role of emerging technologies such as Software Defined Storage and Artificial Intelligence & Machine Learning.

Click here to register for the webinar.

2. Data, Data, Everywhere

There is no shortage of data available to enterprises for data analysis and business intelligence.

In fact, many enterprises face the opposite challenge – choosing the most appropriate data to analyze from multitudinous data sources.

In order to do that, they first have to identify what data is available to them and where it resides, which is increasingly difficult given the variety of locations in which data is stored, including:

  • Relational and non-relational databases
  • Hadoop and other storage technologies
  • A combination of on-premises and hosted datacenters
  • Cloud providers

If enterprises don’t know what data they have and where it’s located, they cannot use it to affect business outcomes.

In addition, identification of data across the estate is critical for enterprises trying to understand the potential risks they face in relation to regulatory requirements and security concerns.

Cloud platforms are increasingly used to store and process enterprise data, alongside on-premises storage and processing technologies.

The ability to catalog and manage data in multiple locations – including on-premises datacenters and public cloud – is critical if enterprises need to analyze all the data at their disposal.

The ability to identify what data enterprises have, and where it resides, is a growing problem that has become a focus for multiple vendors coming at it from various directions (see table below).

Cloud Providers

Cloud providers are also looking to data management as a differentiator to ensure that even more data is stored in their platforms, rather than with rival cloud or on-premises providers.

However, there is little (or no) indication at this stage that the cloud providers are interested in managing data on rival offerings. This provides an opportunity for third parties to provide a consistent management experience across clouds and on-premises datacenter environments.


With multiple vendors providing different functions that enable multi-location data management, there is significant potential for confusion as enterprises try to understand the boundaries between Hadoop-based data governance, data bazaar and data fabric functionalities.

In the meantime, enterprises should evaluate their business goals and relevant opportunities to take advantage of data stored in multiple locations.

3. Netflix Keeps Ahead of Competition

Original content is now a key component of streaming services, both as a reason why consumers pay for OTT video and the type of content they watch most. Our latest survey results show that original content has cemented itself atop the average Netflix viewer’s watch list, and second among Amazon and Hulu customers.

Half of Netflix subscribers say they’re very satisfied with the quality of its original content, whereas roughly a third of Amazon and Hulu subscribers feel the same way. This is Netflix’s real competitive edge – it helps the streaming giant strengthen its customer stickiness with high-profile programming, as well as its position in consumer mindshare as the go-to streaming platform. Both its overall satisfaction and weekly viewership measures are also solid.

Still, its closest competitors are not without their own strengths. Amazon Video subscribers are most satisfied with the price of their subscription, a clear reflection of the added value of a Prime membership for less than the average cost of Netflix or Hulu plans.

Meanwhile, Hulu subscribers report similar weekly viewership numbers as Netflix. Hulu hosts a broad library of ‘catch-up’ primetime TV (along with its own growing, albeit limited, selection of original content) to keep bringing viewers back.

Setting the Standard for Original Content

Netflix has pursued an aggressive content strategy over the past few years. But just how well is that playing out with its subscriber base? The latest 451 Research surveys show that Netflix’s overall customer experience in fact sets the gold standard for the rest of the field.

The streaming behemoth has more customers than any other platform, and continues to augment subscribership each month. Netflix subscribers are more satisfied and more reliant on it for their daily entertainment needs than Amazon or Hulu customers. More importantly, both viewership and customer approval of Netflix’s exploding slate of original shows and movies far exceeds that of Amazon or Hulu.

Streaming Services

Two in five (41%) Leading Indicator respondents now say original content is why they pay for streaming OTT services – up 8 points year-over-year.

  • Among respondents who pay for a stack of three or more streaming services, 50% say original content is why they spend on OTT video.
  • Original shows and movies are the most watched type of content among Netflix subscribers; 39% watch original content most often – up 7 points year-over-year.

  • Netflix has the highest share of subscribers (80%) as well as the most satisfied customers, with 44% very satisfied.

  • 50% of Netflix subscribers say they’re very satisfied with the quality of original content. Roughly a third of Amazon (34%) and Hulu (33%) subscribers say the same.
  • Amazon Video customers are most satisfied with their subscription price (38%) – but not significantly higher than Netflix (31%) or Hulu (30%).
  • More than half (54%) of Netflix subscribers and 50% of Hulu subscribers say they use the services daily/several times a week.

Streaming Devices

  • Roku devices are most commonly used, with 39% of streaming media device owners using either a full-size Roku player or a streaming stick. In comparison, 32% use Apple TV.
  • Roku owners report the highest top-box satisfaction score – with 50% very satisfied. Top-box scores among owners of the newest Roku devices (e.g., Roku Ultra, Premiere) are much higher, with 62% very satisfied.

  • Satisfaction ratings among Apple TV owners (42%) are also solid. Again, combined ratings (54%) are higher among owners of newer devices (i.e., 5th/4th generation Apple TV).

4. Make Room for Specialist CSPs

Enterprise cloud transformation is well underway.

Workloads are increasingly migrating to (or being deployed directly in) cloud and hosted environments, with public cloud IaaS environments playing an especially significant role.

According to a 451 Research survey of IT managers at enterprises using hosting and cloud services, public cloud/IaaS is the most widely used type of service-provider infrastructure environment – currently in use by 62% of respondents.

As enterprise cloud transformation takes place, a separation is occurring in the cloud service provider (CSP) market between:

  • Generalist providers that build and operate public cloud platforms at scale (e.g., AWS, Microsoft, Google)
  • Specialist providers that help customers consume those services effectively

CSPs in the latter group are trying to refine and clarify their role in an infrastructure market dominated by a handful of hyperscale cloud operators.

At the same time, enterprises are trying to effectively match workloads to the appropriate cloud environments. This involves modernizing and refactoring existing applications and leveraging hybrid and multi-cloud environments.

The Role of Specialist Providers/Advisors

These trends present an opportunity for CSPs that have traditionally focused on hosting and managed services to reinvent their businesses via cloud enablement and advisory services.

451 Research survey results indicate a continuing role for the majority of service providers that are not hyperscale cloud operators, as well as for the various infrastructure environments they operate.

These environments may include hosted private cloud and other dedicated hardware environments that can act as complements to public clouds or serve as critical components of hybrid IT.

There is also a continued role for service providers that support a broad range of services, based either on their own infrastructure or sourced from third parties.

Users Still Value CSP Infrastructure

Although sourcing third-party cloud services has become an important function for service providers, enterprise preferences suggest that, despite a widespread move toward public cloud infrastructure, they still value CSP-owned infrastructure in multi-cloud environments that combine venues.

A significant portion of enterprises want service providers to have infrastructure environments where they can host workloads (see figure below).

The prevailing preference is for infrastructure operated by the service provider itself, which increased from 36% in 2016 to 40% in 2017.

However, some enterprises prefer infrastructure supplied by third parties (12%) or a combination of a service provider’s own infrastructure and third-party infrastructure (24%).

Provider Relationships

Customer preferences around how they manage service provider relationships show a narrowing – but still significant – demand for relationships in which a single service provider can deliver a breadth of products and services, either via its own tools or partnerships with other vendors (see figure below).

The portion of respondents that expressed a preference for dealing directly with – and managing – multiple vendors grew from 30% in 2016 to 42% in 2017.

The portion of businesses that prefer a single vendor that sources products and services via partnerships dipped several percentage points (23% to 18%).

However, the sum of responses that value a single vendor with a breadth of services (in-house or via partnership) remained a significant portion of the overall market (18% + 27% = 45%).


Public cloud IaaS platforms support a large and growing share of enterprise workloads. This market is dominated by a handful of hyperscale vendors, and competing directly with them is not a viable option for most cloud and hosting providers.

But that doesn’t mean the majority of service providers must be excluded from customers’ cloud consumption. The path forward is for providers that can assume the roles of cloud service brokers and ‘trusted advisers.’

451 Research surveys show a continuing appetite for cloud providers that can deliver broad sets of services based on their own infrastructure as well as that of partners.

This role demands services focused on how cloud is consumed, such as:

  • Architectural guidance
  • Migration and integration services
  • Security management
  • Supplying consumption-oriented tools, such as management consoles

Service providers operating outside the hyperscale IaaS market should have a clear strategy for incorporating third-party services (particularly public cloud) into their offerings, but this doesn’t mean they should abandon their own infrastructure environments.

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