Canadian IaaS market to hit $250M by 2016

According to market research firm IDC Canada, the Canadian Infrastructure-as-a-Service (IaaS) market will be worth over $250 million by 2016, with a compound annual growth rate of over 50 per cent.

IDC Canada recently released its 2013 IDC MarketScape report profiling and ranking the leading public IaaS vendors active in the Canadian market, including AWS, Bell, Blackiron, CSC, Cogeco, HP, IBM, Microsoft, OnX, RackForce, Savvis and Telus.

According to IDC, scale is key for IaaS providers, with the ability to fund massive data centre facilities and scale compute and storage resources proving important to success. The report found most Canadian-based IaaS providers are leaning toward a managed, virtual private IaaS model, and the research firm believes vendors need to expand their IaaS portfolio to include self-serve, on-demand access to infrastructure resources to better match customer demands.

The location-based issue around IaaS may have been overrated. IDC said that while 60 per cent of buyers preferred to have IaaS delivered from within Canadian borders, buying in-Canada solutions ranked unusually low on the list of factors. According to IDC, while the stated preference for in-Canada solutions is important in terms of relationship management, it is also a convenient excuse for other factors that revolve around knowledge and comfort with nontraditional vendors as well as inexperience in managing the reputational risk of outsourcing.

The report also notes that market leadership in the IaaS market is insecure, given the newness of cloud computing and the continuing evolution of the technology, meaning there is time for vendors to make significant moves in the Canadian market.

“The good news for traditional outsourcers is that while these alternative models will cannibalize some traditional business, they will more dramatically expand the way in which services are delivered and the market for those services. And in many cases, it will be the larger Canadian IT service vendors that will be providing services such as cloud.” Mark Schrutt, director of services and enterprise applications for IDC Canada, in a statement.