Report:

Magic Quadrant for Strategic Cloud Platform Services

Top Vendor Products for Strategic Cloud Platform Services in 2023

• Amazon Web Services
• Google
• Microsoft
• Oracle

Strategic Cloud Platform Services Vendor Product Comparisons 2023

• Amazon Web Services - Leader
  

  Pros:

  • Breadth and depth of IaaS and PaaS services: AWS offers a comprehensive array of cloud infrastructure and platform services that are often more mature than its competitors' offerings. Core AWS services typically influence the market by establishing standards and prices that other providers adopt.
  • Hardware design innovations: AWS was the first cloud provider to implement performance acceleration and security through hardware offload with its Nitro System, and the first to design its own ARM-based chipsets. Today, these technologies are leveraged extensively across AWS infrastructure, giving AWS a potential cost and efficiency advantage over providers who rely solely on third-party components.
  • Large, capable partner ecosystem: AWS has mature systems integrator and managed service provider (MSP) partner channels, and AWS partner programs maintain a strong focus on partner technical enablement. AWS Marketplace is the largest and most full-featured digital marketplace for third-party cloud software in the industry.

  Cons:

  • Lack of tools and guidance for multicloud scenarios: Of the major hyperscalers, AWS is notable for its lack of tools and services that directly address multicloud use cases. Gartner survey results indicate that 76% of enterprise IaaS and PaaS customers today rely on more than one public cloud provider.
  • Overemphasis on "lift and shift": The AWS sales field and AWS Migration Acceleration Program (MAP) often emphasize a "move now, modernize later" approach that focuses on getting customers onto AWS as quickly as possible. Customers that do not modernize their workloads postmigration can find themselves maintaining legacy assets in AWS without obtaining the agility and cost benefits they expected.
  • Potential competition with partners: AWS has a history of introducing services that compete with its ecosystem partners, which can make customers uncertain about who to buy from. AWS offers many managed services for popular open-source packages, migration tools and incentives for customers to switch from partner database products, and competes with its own service channel through offerings such as AWS Managed Services.


• Google - Leader
  

  Pros:

  • Design elegance: In building up its wide array of IaaS and PaaS services, Google has applied its core design principles more consistently across its portfolio than its competitors have. Cloud engineers tell Gartner they find GCP APIs to be more consistent and easier to learn and use.
  • AI-infused IaaS and PaaS services: Google not only supports AI/ML development and third-party model integration through its Vertex AI toolset, it is also a leading developer of its own models, including popular large language models such as PaLM 2. Google has begun the process of integrating its models into its core IaaS and PaaS services at a deep level.
  • Environmental sustainability: GCP has the highest sustainability rating of the providers in this Magic Quadrant. Data center energy efficiency is especially important to customers in regions with unstable energy supplies or prices, and for customers engaged in high-energy-consumption cloud activities such as AI model training.

  Cons:

  • General availability (GA) release cadence: Google has a practice of launching services in preview mode and promoting them aggressively in the market without providing a committed timetable to GA. Customers must use caution when incorporating the "latest and greatest" GCP service innovations into their production deployment plans.
  • Uneven field and partner maturity: Google maintains a full-featured and expanding customer migration program (RaMP), with over 70 certified migration partners. Yet, Gartner continues to hear from some clients that their Google Cloud migration project was hampered by lack of Google account team availability or lack of in-depth partner experience with GCP.
  • Minimal integration between Google Cloud and other Alphabet products: GCP is not tightly integrated with Google's other cloud-based properties, notably Workspace, nor with the other products of its parent company Alphabet. Customers hoping to utilize GCP as a foundation for composing digital solutions across the Google portfolio will currently find little out-of-the-box support and may need to negotiate commercial terms with multiple Google business units.


• Microsoft - Leader
  

  Pros:

  • Hybrid and multicloud transformation: Microsoft is systematically building out the capability for Azure Resource Manager to govern a wide array of in-cloud, multicloud and on-premises resources using Azure Arc as a connection bridge. Through Arc-enabled solutions for VMware vSphere as well as for hardware servers from traditional OEMs, Microsoft customers can use Azure to administer and secure both private cloud and noncloud resources.
  • Developer capabilities: Not all Microsoft developer services are "best of breed;" however, when taken together, the Azure developer portfolio rates well across a wide range of use cases including cloud-native app development, legacy modernization, data processing and AI. Additionally, while Microsoft's other developer-oriented clouds, Power Platform and GitHub, are outside the scope of this Magic Quadrant, Azure's integrations with these assets cannot be ignored.
  • Strategic partnerships: Microsoft has been both willing and able to negotiate strategic Azure partnerships with a wide range of industry leaders including IT incumbents such as SAP, Oracle, Dell and VMware; industry vertical leaders such as Epic and AT&T; and emerging digital leaders such as OpenAI. Such flexibility is important for enterprises looking to digitally transform using technologies from multiple industry-leading vendors.

  Cons:

  • Persistent resilience and security issues: Despite Microsoft's ongoing efforts, the Azure outage in Singapore in January of 2023 illustrated that inconsistent operational practices and failover architectures remain an issue in some regions. Further, serious security vulnerabilities in Azure have been made public by researchers over the past two years. Microsoft is currently in the process of addressing its security posture and working to foster a more security-first culture.
  • Cross-service dependencies and technology lock-in: Many Gartner clients report frustration with how Azure services are purpose-built to "work best" with other Azure services, such that controlling the spread of Azure in an account is difficult. Often the cost implications of using a new Azure service just to meet the needs of another Azure service are not clear to customers, who then see their Azure bill spike in unforeseen ways.
  • Uneven partner and unified support quality: Microsoft maintains a vast partner network and a vast support organization, both of which must cover all Microsoft products, not just Azure. Microsoft lags some other cloud leaders in enforcing the technical quality of its Azure Cloud Solution Provider (CSP) partner network and its Unified Support staff.


• Oracle - Leader
  

  Pros:

  • Distributed and sovereign cloud: Oracle is out-innovating the market in the areas of distributed cloud and sovereign cloud computing. Oracle can deploy standard commercial regions, private regions in customer data centers, sovereign cloud regions, disconnected regions and locally partner-operated regions. This range of options is valuable to customers under stringent regulatory and data privacy requirements.
  • Multicloud integration: OCI offers high-performance interconnection with Microsoft Azure in selected regions, and has recently introduced Oracle-managed database services in AWS and Azure. These options, together with OCI's multicloud application and data integration tools, make it easier for many customers to establish OCI as a "second cloud" adjacent to their existing primary provider.
  • Velocity of new features: Oracle continues an impressive year-over-year pace of feature introductions that has brought it into direct comparison with the market leaders in terms of hyperscale cloud capabilities. Oracle is demonstrating strength in DBMS (both analytics and operational), data integration, and middleware and integration platform as a service (iPaaS) services, all key components needed by cloud customers for modernization and transformation.

  Cons:

  • Limited GenAI capabilities: In comparison to other cloud leaders, OCI's strategy around generative AI is less mature, and its messaging is muted. Currently, Oracle's partnership with Cohere is centered around its database and Fusion products, and, despite a solid partnership with NVIDIA, OCI's AI infrastructure is not yet well-differentiated in the market.
  • Limited resilience options: Oracle's most commonly deployed region architecture is one with a single availability domain (AD) containing three fault domains. Currently, very few OCI regions have more than one AD, and customers intending to implement high-availability architectures using multi-AD or multiregion failover may have fewer options than they expect.
  • Uneven sales and support experience: The OCI sales field leverages its tight relationship with other Oracle business units for integrated customer management. This has mixed implications for enterprise cloud customers, many of whom tell Gartner that their concerns over Oracle's traditional sales behaviors make it harder for them to commit to OCI.


• Alibaba Cloud - Niche Player
  

  Pros:

  • Market leadership in Greater China: Alibaba Cloud is the market share and cloud thought leader in Greater China, and this has a carryover effect on its international influence. The strength of Alibaba Cloud's partner ecosystem and its open-source community leadership in China give it greater leverage in surrounding markets such as Southeast Asia.
  • Hybrid infrastructure and engineering capability: Alibaba Cloud's engineering talent is evident in the breadth and depth of features in its private cloud solutions, its container management services, and its custom-designed ASICs. Alibaba Cloud's sustainability designs have also improved the power usage effectiveness (PUE) rating of its data centers.
  • Digital ecosystem enablement: Alibaba Cloud leverages the influence of its parent, Alibaba Group, to offer digital business options its competitors cannot match. These include access to the Alibaba commerce network and popular internet services such as DingTalk and Alipay. These capabilities are attractive to Chinese companies expanding into international markets.

  Cons:

  • Strategic uncertainty: In May of 2023, as part of its spinoff from its parent company, Alibaba Cloud initiated limited layoffs. In September, CEO Daniel Zhang stepped down unexpectedly after only eight months in the role. This lack of stability, coupled with a lack of a confirmed public or private financing plan, are making some customers and investors wonder about Alibaba Cloud's future direction.
  • Inconsistent global service offerings and support: Many cloud services available from Alibaba Cloud in China are either not available or only selectively available in international regions. Outside of China, Alibaba Cloud's international sales, support and partner presence are limited, with fewer local offices and online support in only two languages: Mandarin and English.
  • Lower-performing data center infrastructure outside of China: Given Western trade restrictions against China on key technologies such as ARM designs and NVIDIA GPUs, Alibaba Cloud's global infrastructure may struggle to keep pace with its Western cloud competitors. In addition, some custom Alibaba chips, such as the Yitian 710 and the Hanguang 800, have either never been released internationally or are only available in limited quantities.


• Huawei Cloud - Niche Player
  

  Pros:

  • Unique global market strategy: Huawei Cloud has a clear and differentiated market penetration strategy outside of China. It enters underserved and emerging international cloud markets, and leverages its existing telecom-based sales relations in those markets to build strategic cloud relationships. This has enabled Huawei Cloud to establish a limited but growing presence in Latin America, the Middle East, Africa and Southeast Asia.
  • Customer experience: International customers express high levels of satisfaction with the attention and support they receive from Huawei Cloud in areas like presales evaluation, contracting, integration and deployment, and ongoing service and support.
  • Proven track record with large international customers: Huawei Cloud has extensive experience in serving large enterprise clients worldwide through its brand credibility and history of success with telecom customers. This gives Huawei Cloud a sales advantage over its main China competitors in some international markets and positions Huawei to compete in hybrid cloud opportunities.

  Cons:

  • International sanctions: International sanctions continue to have an impact on Huawei's operations, including complicating Huawei Cloud's access to markets and technology components. This demands that enterprises in certain regions carefully weigh the benefits and drawbacks of strategically partnering with Huawei.
  • Product clarity and overall transparency: Service documentation is less complete than with other cloud leaders, and many services are only available in certain regions. Further, the success of Huawei Cloud's business can be hard to gauge, as it has at times offered conflicting statements around the financial performance of its cloud offerings.
  • Fledgling consulting partner ecosystem: Huawei Cloud has a limited number of consulting and channel partners, which are mostly focused on Asia. Huawei Cloud's online marketplace of third-party offerings also has a limited selection.


• IBM - Niche Player
  

  Pros:

  • Focus on highly regulated markets: IBM has tailored options to meet the requirements of highly regulated industries like financial services. For example, IBM Cloud for Financial Services includes preconfigured control sets to support automated compliance and security posture for the most sensitive workloads.
  • Support for legacy and non-x86 workloads: IBM Cloud has one of the widest VMware-based offerings in the market, with four alternate purchasing and consumption options. IBM Cloud also supports traditional IBM architectures including IBM Power (AIX, IBM i and Linux on Power) and IBM Z mainframe systems technologies including LinuxONE and z/OS (the latter is only for dev/test workloads).
  • Multicloud container management: IBM bases its container management offering on Red Hat OpenShift, enabling customers to implement their container strategy on a popular platform that spans hybrid and multicloud locations. OpenShift is core to IBM's cloud strategy and serves as the foundation for delivering IBM software on providers such as AWS and Microsoft Azure through their jointly branded offerings.

  Cons:

  • Reliability: From 2021 through 2023, IBM has put significant effort into improving reliability, resulting in a notable reduction in disruptive incidents. However, even with such improvements, IBM Cloud's resilience architecture does not match other leaders in the strategic cloud platform services (SCPS) market, and, to date, IBM offers only a limited number of multizone regions (IBM MZRs).
  • Lack of a unified cloud architecture: Despite having launched its Gen2 IBM Cloud VPC infrastructure in 2019, IBM still continues to sell, support and enhance its Gen1 (IBM Cloud Classic) environment. In addition, key cloud management tools acquired by IBM for use in IBM Cloud VPC, such as Instana and Turbonomic, are not fully integrated into the IBM Cloud Management Console and must be purchased and deployed separately.
  • Limited support from MSPs: Major cloud-managed service providers offer only limited support for IBM Cloud. Customers looking for managed transformation and operations on IBM Cloud must rely on local partners or build such skills internally.


• Tencent Cloud - Niche Player
  

  Pros:

  • Distributed scale-out platform capabilities: Tencent Cloud has developed a portfolio of services designed to appeal to customers with a need for high-performance networking, scale-out application architecture and rich media processing. These capabilities are useful in many areas including online entertainment, gaming, social networking and e-commerce.
  • Pricing incentives: Tencent Cloud offers flexible private pricing with rapid decision making on exceptions and discounts for larger customers. Core customers are eligible to receive special incentives for use of services in selected regions.
  • High-touch support: Tencent's focus on providing high-touch support for large high-value customers positions it effectively with global enterprises that can make a strategic commitment to its platform.

  Cons:

  • Fluctuating market execution in past years: Tencent has pivoted from targeting general cloud users to refocusing on the gaming industry. However, recently, Tencent has pivoted back to general cloud users. Enterprises will need to monitor the stability of this latest approach, particularly if Tencent finds little traction in the newly targeted markets.
  • Limited ecosystem: Tencent Cloud's partner programs lack the depth and breadth of other vendors in this research. It will be difficult for customers outside of China to find partners to work with Tencent Cloud.
  • Modest market share: Tencent Cloud continues to have very modest year-over-year gains in market share and demonstrates less traction than the other two China-based vendors in this analysis. Enterprises should monitor this and how it impacts Tencent's long-term ability to support their requirements.

Reference

• Gartner, Magic Quadrant for Strategic Cloud Platform Services, 4 December 2023, ID G00781177

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