The Hybrid Cloud opportunity for Service Providers

Posted by Nicolas Denutte on 12/26/19 9:38 AM

Hybrid cloud has become the default cloud computing model for organizations as IT leaders become more selective about where to deploy different classes of workloads. The hybrid cloud market is big and is expected to grow to $96B by 2023. On-premise workloads are here to stay and all leading public cloud providers have recognized this by launching their respective hybrid cloud offerings (think AWS Outposts, Azure Arc, Google Anthos).

AWS in a hybrid cloud world

AWS remains the undisputed market leader in the public cloud market with nearly 50% market share. The recent launch of AWS Outposts is the market validation for AWS-compatible hybrid clouds.  According to Gartner, 20% of AWS large-enterprise customers will have AWS Outposts running in their private data center environments by 2022. The move to embrace hybrid cloud offerings is driven by what organizations are willing to, and capable of, doing in the public cloud and what they are not capable or willing to do there. 

In this hybrid world, many organizations are looking to embrace a single development and deployment paradigm to accelerate application time-to-service, enhance effectiveness, and improve compliance. This allows them to develop once and deploy to the right platform initially – and if conditions change, migrate applications off the original deployment platform. Given the demands of these increasingly complex environments, many companies are relying on service providers (SPs) to assess, migrate, host, and manage their applications and infrastructure across the variety of deployment platforms. Many of these SPs have partnered with Amazon Web Services (AWS) to offer managed services around the public cloud aspect of the hybrid environment. This partnership has been fruitful for many SPs, but with the accelerating adoption of hybrid cloud and Amazon's announcement of Outposts, an on-premises offering, SPs may find themselves competing with AWS for the business they’ve traditionally owned

What does all that mean for SPs?

  • New revenue opportunities may decrease as Outposts is managed by AWS
  • Account control may diminish as customers look to AWS for guidance as the provider of a core element of their hybrid strategy
  • Current managed service engagements may become more complex as Outpost introduces potential security and compliance challenges with hybrid management centrally controlled from the public cloud. 

Unlocking the opportunity for SPs

The AWS hybrid cloud market is big, and there is room for more than one winner. AppScale’s AWS compatible IaaS platform helps SPs to add a very compelling attribute to their hybrid cloud offering that will drive top-line growth. 

AppScale ATS allows SPs to offer customers a differentiating AWS hybrid cloud offering that delivers:

  • Independence - From dominant cloud providers such as AWS.
  • Placement - Placement of data and compute in specific geographies (for compliance) or close to data sources (for latency).
  • Autonomy - Cloud can be deployed in settings with inadequate, intermittent, or fully absent Internet connectivity (air-gapped).
  • Compatibility - High fidelity API compatibility, designed from scratch, to create private AWS regions.
  • Savings - TCO can be up to 50% lower than public cloud costs for equivalent resources.
  • Customizability - Many features (e.g., instance types) can be customized beyond what's available on public clouds.

Visit our resources page to learn more about AppScale or see for yourself how AppScale ATS enables an AWS hybrid cloud environment by requesting a demo


Topics: Industry News, Industry Insight, Partners

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