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Hosted services drive growth in cloud

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The technological and economic benefits offered by cloud services are accelerating enterprise migration from on-premise IT infrastructure solutions to hosted alternatives. This is driving rapid growth in the European infrastructure as a service (IaaS) market. Cloud providers are also pursuing regional strategies such as setting up of local data centres to fast-track uptake among European customers.

New analysis from Frost & Sullivan, “Analysis of the European Infrastructure-as-a-Service Market”, finds that the market earned revenues of $1,95-billion in 2014 and estimates this to reach $10,11-billion in 2019.

“The on-demand, pay-as-you-go model of cloud services is garnering intense interest in Europe as it allows enterprises to effectively deal with volatility and seasonality in IT demand,” says Frost & Sullivan ICT senior research analyst Shuba Ramkumar. “Infrastructure requirements can be easily altered using a web portal, in contrast to the traditionally cumbersome job involving physical servers or networks.”

In addition, enterprises find IaaS to be a suitable method to effectively manage IT spending in the face of challenging economic conditions in Europe. The deployment of IaaS decreases enterprise capital investment in internal data centres, hardware and human resources, which can instead be directed to core business functions.

To address concerns around security, cloud providers are developing hosted private cloud services compliant with specific standards. Enterprises, particularly in highly regulated industries such as healthcare and financial services, have reason to be concerned about security risks such as data loss, unauthorised access to apps and leakage of data.

“Offering hybrid cloud services that combine IaaS with managed hosting or on-premise cloud along with managed cloud services will help build a secure and unified infrastructure,” says Ramkumar. “With the rise in different hosting environments requiring enterprises to operate in multi-vendor ecosystems, service providers must also harness an environment of co-opetition, where partnerships can be leveraged to ensure easy migration of applications and stronger adoption of IaaS in Europe.”