Infrastructure as a Service (IaaS) is a pay-as-you-go offering where company rent their technological infrastructure from an IaaS vendor rather than purchasing that infrastructure themselves. The IaaS segment of cloud computing focuses specifically on computing, network, and storage services. The main driver of IaaS adoption are businesses that can now start up with minimal costs allocated to their IT budget and then scaling those budgets up or down based on their usage need. Furthermore, the service-level agreement from the vendor guarantees a certain level of performance built into those costs without hiring and managing an additional team to do so.
IaaS has been one of the fastest-growing segments of the cloud. Because of cloud computing, businesses can quickly go from a pitch to an actual startup as they no longer have to incur huge outlays for servers and infrastructure. These infrastructure costs can be outsourced to any large IaaS vendors. According to Gartner Research, over half of corporate IT budgets in specific areas are expected to be for cloud spending by 2025. That means that companies will now spend more on cloud computing than on all the other aspects of their IT budgets. Another Gartner research piece points out that the fastest-growing cloud computing segment in 2022 is going to be IaaS, growing over 30% to nearly $120 billion.
Given this level of tremendous growth, we explore what is Infrastructure as a Service and how it works. We’ll also discuss the benefits driving this growth and some associated challenges.
How does IaaS work?
Customers using IaaS access the product via the internet and then implement the missing components to their application/ technology. For example, customers would log into the IaaS vendor’s platform and set up virtual machines to virtually deploy all supporting infrastructure, such as a database and operating system, and then start carrying out the workload on that platform.
The IT manager’s primary focus is to ensure that the service provided meets the SLA terms and implement traditional networking and database workflows in a virtual environment rather than physical hardware. They also have a bevy of dashboard indicators to manage traffic, application issues, and usage.
Benefits of IaaS
The benefits of companies using IaaS are plentiful. Some of the specific benefits customers have borne from procuring IaaS are listed below.
- Costs – Customers significantly reduced costs associated with setting up and continuously managing their IT infrastructure. Gone are the days when customers set up massive data centers to store and protect their data. Today if they see the need for additional capacity, they procure just what they need. They can reduce capacity if unused, reducing their costs in real-time, an option that was nonexistent in the past.
- Performance – The infrastructure procured from one of the large vendors such as Amazon, Google, or Microsoft lets you easily adjust to resource demand spikes and quickly adjust after that. There are no additional resources required for software or hardware upgrades, nor is there any need for physical hardware troubleshooting. That is all seamlessly managed by the vendor.
- Speed (of infrastructure) – Since most large IaaS vendors are international, customers can adjust their data center to the localities of specific customers so that there is minimal latency for such customers. This can be achieved for all of a customer’s markets.
- Speed (of Business) – Businesses can roll out new products and services faster. Suppose a company decides to launch an infrastructure heave product offering, such as an AI/ML engine. In that case, they can have that infrastructure up and running in a matter of hours rather than days and weeks.
Drawbacks of IaaS
As beneficial as IaaS and the cloud overall have been over the years, there still are drawbacks to these products.
- Costs – Although costs have come down significantly over the past two decades, these lower costs are now built into expectations. As if the days of having to purchase the entire infrastructure are a faded memory. As a result, prices at the current reduced levels can often seem burdensome, especially when one looks at the itemized bill of server space, virtualized machine, operating software, etc., for the entire environment. It would help if business owners could carry out an estimate of purchasing the whole physical infrastructure and compare that cost to what an IaaS vendor is offering them for context.
- Monitoring – The aspect of the business where an IT specialist monitors their infrastructure never really went away. It’s just that the nature of that work has changed. Monitoring usage and billing associated with IaaS is IT teams’ new management of technology. Most large vendors now offer certifications to specialize in cloud billing management.
More than half of all IT spending is expected to be for cloud computing by 2025. In 2022, cloud computing spending is expected to reach nearly $500 billion. One of the fastest-growing segments of cloud computing is Infrastructure as a Service, making up almost a quarter of 2022 spending and the fastest-growing segment in that space. Given this growth trajectory, it behooves businesses of all types to gain an understanding of what is driving these trends. More importantly, merchants and businesses of all kinds need to understand what IaaS is, how it works, and how it may fit into their business strategy.
There clearly are benefits to consider in incorporating IaaS for all business owners. However, it is also essential to be aware of the challenges in implementing such a strategy as well.