Are You Prepared to Meet the IaaS Demand?

IaaS spend is on a fast growth trajectory, and businesses need your expertise to help them transition from on-premises to the cloud.


Infrastructure as a Service (IaaS) has had a relatively brief – but dynamic – history. The concept of cloud computing has been around for decades. Still, it wasn’t a practical option for many businesses until Amazon developed the Cloud Computing Infrastructure Model to allow more efficient use of computing capacity. Amazon launched its web-based retail services in 2002 and Amazon Web Services in 2006, offering services to other businesses, including Elastic Compute Cloud (EC2), enabling users to use virtual computers on a subscription or “as a Service” basis.

From the initial splash IaaS made about 20 years ago, IaaS adoption and spending have grown dramatically. Gartner estimates the worldwide market to total about $61 billion, and predicts the global IaaS market will grow by an additional $136.21 billion from 2021 to 2025, a CAGR of 27 percent.

What’s Driving IaaS Growth?

Several factors are driving IaaS growth, including two prevalent trends:

1. Replacing CAPEX with OPEX

On-premises infrastructure, including servers, data centers and networking, is expensive. A business has to budget for on-premises infrastructure expansions or upgrades to purchase the hardware it needs. When a company determines that more computing power is necessary, it can take months from approval to budgeting, purchasing and implementation to have new computing resources. Meanwhile, a competitor could vault ahead in delivery capabilities, customer service, or innovative products or services because it uses cloud infrastructure.

IaaS enables a business to expand computing power almost immediately (without finding additional square footage for a bigger server room or data center) and pay for the capacity it uses every month. As a result, no CAPEX, budget and purchasing cycle or months of waiting are necessary.

2. Businesses need greater agility for business continuity

The COVID-19 pandemic proved that a system that’s 100 percent on-premises is not enough for a business to keep operating during a crisis. Cloud or hybrid infrastructure ensures a business’ systems are accessible when employees must work from different locations, that distributed workforces can still do their jobs, and that data can be stored and backed up to meet recovery time and recovery point objectives (RTOs and RPOs).

Has Your MSP Business Kept Pace with IaaS Demand?

Businesses looking to expand their capabilities, leverage new technologies, and build greater business continuity represent opportunities for managed services providers (MSPs) to expand and grow their businesses.

Some MSPs sell IaaS, basically only participating as a sales agent for the service. However, an MSP can build a lucrative IaaS practice by devoting time and effort. Your clients need an MSP with experts who can guide them through a successful migration to cloud infrastructure and bundle those services with the other solutions they need, from backup and security to ongoing maintenance and cost optimization. Likewise, businesses need a partner to help them solve business problems by moving infrastructure to the cloud and providing the additional services and solutions they need to operate more competitively. If you just “sell” IaaS, you miss out on opportunities to build strong relationships with your customers moving workloads to the cloud.

Businesses also need MSPs who can fill any gaps they have with internal resources. Gartner predicts that a lack of adequate IaaS skills will delay cloud migrations by at least two years. Transitioning to the cloud often takes more than a “lift-and-shift” approach, but modernization and rebuilding may produce better results. Gartner states, “This is creating a market where service providers cannot train and certify people quickly enough to satisfy needs for skilled cloud professionals.”

Analysts have concluded that businesses’ migration to the cloud and the demand for MSPs to help them successfully transition from on-premises infrastructure to IaaS will continue. So investigate options for how your MSP business can meet those needs and the impact it could have on your business. But don’t wait. The IaaS demand is rising now.