Managing Third Party Clouds [Report]

According to the latest Hot Topic Report from Structure Research, Managing Third Party Clouds, “One of the more interesting recent developments in the hosting and cloud infrastructure space is the emergence of managed services offerings for massive-scale cloud infrastructure.” A few managed cloud services providers such as HOSTING anticipated this market shift early on. In this report, Structure Research calls out HOSTING as a leader in combining the flexibility and scalability of massive cloud platforms such as those from AWS and Azure with industry-leading managed services. Today the HOSTING Unified Cloud™ helps organizations configure, deploy and manage their cloud environments to accelerate business performance on any platform they choose. Read on for more insights from the Structure Research report.

What do managed third party clouds look like?

Structure Research lists two ways that cloud service providers can take advantage of third party clouds:

  1. Manage them as a service for the customer – In this scenario the end user runs workloads on a massive scale cloud such as AWS and a managed cloud service provider such as HOSTING provides services such as design, migration, management, monitoring, security and compliance.
  2. Build on top of it to create a product or service offering – This is a less common model in which cloud hosting providers use the third party’s cloud platform to build a product or service offering. In this case, the cloud hoster simply leases the infrastructure from a massive-scale cloud, rather than buying servers and setting up data centers.

A cross between these two models is support and hosting for an application optimized to run on a massive-scale cloud. in this case, the value proposition is comes from the optimization and management of both the infrastructure and application layer.

The pros and cons of managed third party clouds

Depending on the cloud hosting or service provider’s business model, the concept of managing third party clouds comes with its share of benefits and potential drawbacks.

Cons

  • From a pure infrastructure hosting perspective, letting Amazon, Microsoft or Google host a customer’s content or application means less revenue for the hosting provider.
  • Helping customers run on Amazon, Microsoft or Google exposes them to the other products and services that these companies offer. This could potentially have an adverse impact on a hoster’s ability to enter or succeed in markets that AWS, Microsoft and Google are already strong in.
  • Exposing customers to third party cloud could also potentially threaten workloads already sitting in a hoster’s data center. If a customer is happy with the services that come from an AWS platform, for example, there is no reason for them not to migrate additional workloads.

Pros

  • Massive-scale cloud offer economies of scale that are generally unavailable to most cloud hosting and service providers. They can optimize limited resources with a low up-front investment and scale up as needed. Utility-based pricing ensures that resource consumption aligns with their bottom-line requirements.
  • Managing customers’ massive-scale cloud deployments can help cloud service providers strengthen their relationship with them, and progress to a trusted IT advisor role.
  • Managing third party clouds provide hosting companies with unique insight into their clients’ existing IT operations, allowing them to provide recommendations for solutions and services that can potentially generate additional revenue. These insights can also be used to gain a competitive advantage.
  • Supporting massive-scale can help create more hybrid scenarios. Service providers can use low-cost raw infrastructure for backup, scale-out or short-term requirements.
  • Amazon, Google and Microsoft are platforms. They are not service providers and likely don’t have plans to become one. Managed cloud services providers such as HOSTING leverage the HOSTING Unified Cloud to provide end-to-end support and visibility into customers’ environments.

Trends for third party clouds

According to Structure Research, “At the end of the day massive-scale clouds are an infrastructure platform. It is a platform with a great toolset that fits nicely with certain workloads and infrastructure scenarios. But a platform is not the same thing as a service provider.”

The managed third party cloud model continues to gain acceptance, with more cloud providers and service providers putting it on their product roadmaps. Structure Research also notes that, “There were just a handful of providers dabbling in this (managing third party clouds) just a few years ago but things have changed significantly. Other US-based notables now in this market include the likes of HOSTING.”

Recognizing that the massive cloud infrastructures offered by AWS, Microsoft and Google offered organizations unprecedented opportunities for development and innovation, HOSTING led the way in offering the HOSTING Unified Cloud that offers a single user interface and support relationship. With our ONE Partner | ONE View offering, customers have unmatched support and visibility into the following:

  • Health and wellness of applications
  • Security and compliance postures
  • Billing and spend management

While managing third party clouds will become more prevalent in the future, HOSTING will continue to be on the forefront of innovation. Structure Research specifically calls out our plans to provide a single compliance and security layer across an entire infrastructure services portfolio that includes multiple massive-scale clouds and other infrastructure services like bare metal or colocation.

Interested in learning how your organization can benefit from a managed third party cloud model? HOSTING cloud experts are happy to discuss your needs anytime. And for more insights regarding managed third party clouds, download the Structure Research report here.

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