Alibaba Edges in as Microsoft, Amazon Grow Stronger

There are still only two companies in the "leaders" quadrant of Gartner's Infrastructure as a Service Magic Quadrant for 2017: Amazon and Microsoft, with Amazon still well ahead but Microsoft closing the gap.

Once again, there are no "challengers" to Amazon or Microsoft in the challenger quadrant to the left of the leaders.

Interestingly, there are more "visionaries," with Google close to and about to test the barrier between the visionaries and leaders. Also making its appearance for the first time as a "visionary" is Alibaba Cloud, the big Chinese supplier of services which is part of the Alibaba Group. Alibaba is followed by IBM, which was a visionary last year, and Oracle, a newcomer to the quadrant this year.

There are more niche players in 2017. In roughly descending order, they are: Virtustream (owned by EMC), CenturyLink, Rackspace, Fujitsu, Interoute, Joyent, Skytap and NTT Communications.

Last year, VMware with its vCloud Air was a niche player. This year, it has dropped from sight. In April VMware announced it was selling its version of infrastructure as a service to the European provider OVH. Prior to that, VMware announced in August 2016 a plan to offer the VMware cloud environment on IBM's Softlayer service. Many of its existing customers were already opting for one of those two alternatives.

See how, rather than chase pie in the sky, VMware abandoned its vCloud effort to hold its virtualization customers versus Microsoft, Red Hat: Microsoft, Red Hat Look To Steal Microsoft Customers.

The 2017 Magic Quadrant for infrastructure as a service is meant to evaluate "all industrialized IaaS solutions," whether public or private cloud, Gartner's accompanying report states. If it's multi-tenant, it's public. Private cloud is built for use by a single tenant. "Community cloud," where a particular customer community is served, is still a specialized form of public cloud.

The standard for availability in the public cloud is 99.95% or higher. Service credit is given for an outage that exceeds the limit, but is typically capped at 100% of the monthly bill, if a customer is fortunate enough to collect such a credit. Some caps are at 10% of the monthly bill.

For a service level agreement violation to occur, customers must be operating a second domain in a different availability zone, and both must fail. The SLA is for a system that continues running 99.95% of the time; the SLA is silent about what performance level it is functioning at, which leaves the providers with considerable leeway. Network performance is probably under a separate SLA.

Gartner lead cloud analyst Lydia Leong and analysts Raj Bala, Craig Lowery and Dennis Smith made the following observations on the various providers.

When it comes to Amazon, it is often the first choice for those seeking to add agility to their organizations. AWS is the supplier "most commonly chosen for strategic organization-wide adoption," they said, noting AWS has been the market leader for ten years.

Getting started is easy, but they warned that its wide ranging services "require expertise to implement… Keeping up with new service innovations and best practices and managing costs may challenge even highly agile, expert IT organizations," they said.

On the other hand, AWS offers excellent business-class support, accurate documentation, extensive training and certification and a partner badging system," allowing customers to pick capable cloud partners.

Amazon is also "the key reference point for pricing" in the cloud market. At the same time, it is not eager "to be the lowest cost bidder in a competitive situation. Its granular pricing structure is complex…" the authors said. Gartner recommends using a third-party cost management tool with Amazon accounts.

In contrast to the U.S. market leader, the Gartner analysts had these observations on newcomer Alibaba. It is based in China but now has locations in the U.S., Germany, Australia, Hong Kong, Japan, Singapore and the United Arab Emirates. An international service portal, documentation and support are presented in English. The service portal in China and its documentation there are in Mandarin. The capabilities of the China service are of a higher caliber than its international service.

Alibaba offers both Xen and KVM virtual instances with block storage based on disks in the cloud, object storage, a content distribution network, a Docker-based container service and a family of database services. It is a "relatively recent entrant to the global market," having launched the international portal in mid-2016, the authors said. It too appeals to companies seeking agile operations. It performs "particularly well with Chinese digital businesses and agencies.

Alibaba also has the financing to continue investing in facilities in more regions of the world with greater engineering effort behind each investment. But it "does not have substantial mind share"  yet in the market that it has entered. "It is still building the required talent, industry expertise and go-to-market capabilities," they added.

While prospective customers may see security or regulatory compliance concerns, Gartner said Alibaba has undergone third-party audits. The Alibaba Cloud "has substantial challenges that it must overcome" before it can translate its success in China to markets in the outside world, they said.

Microsoft's Azure, number two to Amazon, is sustaining a high growth rate. It is likely to have been seeing a $3 billion run-rate in cloud revenues at the end of 2016. Microsoft furthermore has started to accelerate Azure's new feature velocity and is able to bundle Azure with its other data center products. Azure customers are growing in size and "many are beginning to spend more than $500,000 a year," the report said.

Customers that want a multi-cloud strategy get an extra option with Microsoft because it offers the Azure Stack for installation on premises. It's started supporting Linux immediately in new features released for Azure, a big change from its days of see-no-evil spurning of Linux and Windows-only support.

Customers have some complaints about Microsoft's state of enterprise readiness in some cases, such as technical support, documentation, training and breadth of the ISV partner ecosystem. Microsoft is improving on those fronts but "the disorganized and inexperienced ecosystem of managed and professional service partners makes it challenging to obtain expertise and mitigate risks," the analysts wrote.

Microsoft offers Fast Start implementations through its professional services but they are sometimes "inconsistent in quality and do not always accurately reflect what a customer will need to deploy production applications in Azure."

Microsoft commented extensively on the Gartner presentation in a blog by Venkat Gattamneni, director of product marketing for Azure.