4 Reasons the IaaS Market Will Grow In 2021

Businesses have experienced first hand the benefits of virtualizing infrastructure.


The Infrastructure as a Service (IaaS) market has been on a growth trajectory for several years – and there are no signs of it slowing in the foreseeable future. In a report from i2i Research, IaaS market growth is anticipated to increase at a CAGR of 29 percent from $43.73 million in 2019 to $296.95 million in 2025.

IaaS frees businesses and organizations from the costs and limitations of on-site infrastructure, enabling them to use virtualized computer infrastructure instead. IaaS minimizes the investment companies must make in hardware – also lowering the costs associated with maintaining it. Furthermore, when new capabilities are required or a business’ needs change, IaaS scales up without investing in and implementing new physical infrastructure. Companies can also scale back resources when they’re no longer required rather than investing in hardware now but not having a need for it in the future.

In addition to IaaS’s value proposition that has helped drive adoption in the past, there are four reasons that your clients may be ready to move their infrastructure to the cloud in 2021, based on these insights from industry leaders.

The Cloud Exodus Continues

Matt Kunkel, CEO of LogicGate, explains, “Because of our pandemic-forced, digital-first work environment, businesses have been forced to compress their digital transformation timelines, producing an uptick in cloud-based investments.”

According to Synergy Research Group, corporate spending on cloud infrastructure services reached $29 billion in Q1 2020, a 37 percent increase over the same quarter last year.

Kunkel reminds managed service providers (MSPs) and value-added resellers (VARs) that companies on an accelerated digital transformation track need your knowledge and expertise to choose and implement optimal, secure solutions. “The increased demand heightens the importance of governance, risk and compliance (GRC) in 2021 and beyond,” he says.

Employees Are Still Working from Home

With the pandemic continuing as 2020 draws to a close, businesses and organizations are still enabling employees to work from home. Software as a Service (SaaS) can give remote employees access to the applications and data they need. Still, IaaS, which virtualizes all of the company’s computing resources, allows teams to share common, centrally managed resources and additional services from IaaS providers, such as patch management, monitoring and backup and disaster recovery (BDR).

“When it comes to managing distributed workforces, many businesses were forced into a trial by fire this year. Location simply isn’t as big of a factor for employees anymore. Making distributed teams work requires a foundation of processes and platforms that enable people to communicate and connect across global time zones,” says Lachlan Donald, CEO of Buildkite. “I expect asynchronous operations to be a pillar of the ‘new’ future of work.”

Aging Infrastructure Creates a Security Risk

Matt Glenn, VP of Product Management for Illumio, points out, “The older infrastructure is, the riper it is for attacks.” He says instead of launching attacks on new or emerging technologies that have been hardened with the latest cybersecurity technology, hackers will exploit outdated, unmonitored technology in the new year.

“Bad actors will focus their efforts more on older infrastructure and less on individual users,” Glenn says. “They’ll leverage a ‘minimize risk and maximize reward’ mindset, targeting manufacturing lines and supply chains in order to command a much higher return on their efforts. The cost of a manufacturing plant immobilized by ransomware is so great to a company, it would make them more likely to pay the ransom – and in turn, maximize the reward to the attacker.”

Replacing outdated infrastructure – or, in the case of IaaS, cost-effectively virtualizing it – can help minimize this risk.

Businesses Can Do More on a Cloud Platform

Michael Beckely, CTO and Co-Founder of Appian, comments that cloud providers are continually introducing new capabilities to their users. “Vendors such as Google and AWS are continuing to strip the complexities out of operationalizing artificial intelligence (AI) by using low-code techniques. In 2021, the use of broadly applicable and high-value use cases like AI-enabled document processing will become widespread.

Meet the Demand

Businesses saw the urgency in 2020 to advance their digital transformation. The pandemic and economic shutdowns of 2020 showed companies the necessity of moving infrastructure to the cloud, enabling secure, remote work, and extending capabilities with virtualized infrastructure as a core. In some cases, their ability to operate depended on it.

How much progress have your clients made on their digital transformation roadmap to date, and where can IaaS and the value you add take them in 2021?