Bright Future for European Cloud Providers, Says IDC 

The vast majority of Europe-headquartered public cloud providers are expecting their business to expand this year. Eighty-five percent of the organizations surveyed for IDC’s European Cloud Provider’s Technology Investment Survey indicated that they expected their business to expand. The majority (70 percent) expected growth through demand from their local markets, with 30 percent looking at new geographic opportunities.

With growing demand for their services, cloud providers are looking at their technology requirements. IDC’s research shows that:

• There is a distinct difference in approach to technology between the smaller European cloud providers and the large global providers. European cloud providers are running infrastructures that are much closer to those of traditional enterprises than the global providers.

• Open source has much higher use in European cloud providers than traditional enterprises, with 56 percent of servers running Linux, 81 percent of organizations standardizing on Apache, or a mix of Apache and Microsoft’s IIS, and 69 percent standardizing on MySQL.

• Reliability is highly prized in systems supporting public clouds, followed by price, supplier service capability, and energy efficiency.

• Only one in five cloud providers is evaluating the scalable infrastructure propositions offered by systems vendors, but a large majority that have evaluated them (88 percent) plan to standardize on them.

• Converged infrastructure propositions (systems that combine storage, networking, and compute) are less attractive than scalable propositions, with 54 percent of companies surveyed saying that converged infrastructure is not attractive to them.

Commenting on these results, Chris Ingle, associate vice president, Consulting, at IDC, said, “European cloud providers are thriving based on their strong relationships with their local customers. Their business models are very similar to traditional IT vendors; the majority of providers we surveyed have relatively little flexibility in their pricing and service offer. To continue to be competitive in a market where customers are requiring more flexibility, and starting to get it from some suppliers, they will need to examine new business models.”

Looking at the technologies in use in cloud providers’ datacenters, Thomas Meyer, vice president, Research, in IDC’s Systems and Infrastructure group, said: “It is a myth that cloud providers are running a substantially more efficient infrastructure than traditional enterprise datacenters. To be cost competitive, cloud providers need to work with their suppliers to evaluate new technologies and drive greater efficiency in their datacenters.”

Managing operational cost is critical to an efficient datacenter, said Nathaniel Martinez, program director in IDC’s Systems and Infrastructure group: “Only 20 percent of the CIOs who find the converged infrastructure proposition attractive do so because of reduced equipment cost. The majority are concerned with reducing power consumption and floor space use and increasing the flexibility of their infrastructure to scale to meet the demands of new users.”

IDC’s European Cloud Providers’ Technology Investment: An IDC Survey (IDC #GE62S, June 2010) summarizes the main findings of a survey of Europe-headquartered cloud providers. The document includes an analysis of subjects such as growth plans for these suppliers, pricing models, approaches to managing the datacenter, uptake of virtualization, and attitudes to new systems designs.