Dedicated (Local) Cloud Infrastructure-as-a-Service to grow almost 1000 per cent in five years

IDC says on-prem clouds like AWS Outposts will grow from from $140M annual sales to $14B

Analyst firm IDC has a new abbreviation for your cloudy dictionary: DCIaaS, which stands for Dedicated (Local) Cloud Infrastructure-as-a-Service.

“This model is essentially a dedicated version of a publicly available cloud offering, modified to run on-premises or in a specially certified colocation environment, including outside of a traditional datacenter environment,” the firm explains. “The cloud service provider retains full ownership of all underlying infrastructure hardware and software and is completely responsible for delivery, maintenance, updating, and ultimate disposal of the asset when the subscription is terminated.”

DCIaaS delivers compute and storage infrastructure and is consumed as a service.

And it’s set to explode.

IDC estimates that worldwide annual recurring revenues for the offering will grow from $138 million in 2020 to $14 billion in 2025. That’s a compound annual growth rate (CAGR) of 151.8 per cent.

The analyst firm suggests that DCIaaS will be snapped up by enterprise customers and service providers alike, with the latter using it to power their own clouds.

By way of comparison, IDC rates total annual server revenue around $80 billion, IaaS spend at $67billion, and PaaS spend at $47.5billion. IaaS and PaaS will almost certainly keep growing between now and 2025. DCIaaS has the potential to slow that growth and shift the server market.

Some vendors have already moved towards DCIaaS. Dell will happily drop a PAYG VMware-powered cloud onto your premises, while HPE uses its GreenLake cloud services to control its own hardware. It will even charge by the number of cores you use on-prem and let you turn those cores off and on.

Big cloud operators are also moving their wares to your premises. AWS offers outposts, Oracle offers its “Cloud@Customer”, and Azure Stack brings plenty of Microsoft cloud services into your very own bit barn.

All of the above suggest an easier and more cost-effective method of running cloud-like infrastructure and/or a way to run cloud with less latency and a little more comfort about data not leaving the building. Yet The Register also constantly hears that for certain workloads the costs of any consumption-based computing exceed those of more conventional on-prem procurement.

Cost alone, of course, is not the main reason to adopt any form of cloud — relieving oneself of the obligation to care for and feed servers and storage is another big motivator. DCIaaS certainly meets that brief, which may explain IDC’s very optimistic projections. ®