Cloud-Enabled Managed Hosting Market Definition/Description

The cloud-enabled managed hosting (CEMH) market deals in standardized, productized hosting offerings that combine a cloud-enabled system infrastructure (CESI) platform — comprising compute, network and storage hardware owned and operated by a service provider — with cloud management platform software to facilitate self-service and rapid provisioning with managed services (see “Technology Overview for Cloud-Enabled System Infrastructure” note that this document has been archived; some of its content may not reflect current conditions ). The infrastructure platform may be located in a service provider’s data center, or optionally at the customer’s data center, but, either way, it requires standardized deployment across all customers and uses a single code base that has been pre-engineered and/or predeployed by the provider prior to customer sign-up. At minimum, a service provider must supply server OS management services, including guest OS instances when virtualization is used. The provider may optionally supply other managed and professional services relating to the infrastructure’s deployment and operation.
Cloud-enabled managed hosting allows only limited customization. It is sold on a stand-alone basis, with no requirement to bundle it with — for example — application development, application maintenance or data center outsourcing (DCO) services.
Customers must be able to access a self-service interface, which may be different from the platform interfaces used internally by the provider. A service provider can potentially intervene in the self-service workflow to manually approve, deny or alter a customer’s requests, as long as the provisioning requested is fulfilled in a fully automated manner thereafter. Managed services (such as OS backups, patching and monitoring) must be available to customers on commitments of less than one year.

For a more detailed overview of cloud-enabled managed hosting, see “Technology Overview for Cloud-Enabled Managed Hosting.”
This Magic Quadrant focuses on the enterprise-class cloud-enabled managed hosting market. Multiple delivery models are used in this market:
  • Multitenant, on the provider’s premises: Compute, storage and networking hardware is shared by many customers, housed in the service provider’s facilities and fully managed by that provider. This is the most common use case. It encompasses cloud infrastructure as a service (IaaS) offerings for which the provider offers management of guest OS instances.
  • Single-tenant, on the provider’s premises: Compute and storage hardware is dedicated to one customer and housed in the service provider’s facilities.
  • Single-tenant, on the customer’s premises: Compute, storage and networking hardware is dedicated to one customer and housed in that customer’s data center facilities, but owned and managed by the service provider in a nearly identical fashion to the multitenant and single-tenant provider-housed approaches.
In addition to server OS management, managed and professional services related to infrastructure operations may be offered, such as:
  • Management of infrastructure software at the middleware or persistence layer, such as Web server software, application servers and database servers
  • Management of storage, including backup and recovery
  • Management of host-based and network-based security functions
  • Management of network devices, such as application delivery controllers
  • Professional services associated with hosting, such as architecture consultation, capacity planning, performance testing, security auditing and data center migration
Cloud-enabled managed hosting services must be available to customers on contracts shorter than the multiyear contracts historically used for traditional managed hosting. Customers may opt for longer contracts of one to three years to secure greater overall discounts, but this is entirely at their discretion. Ultimately, cloud-enabled managed hosting must afford customers the ability to change the amount of capacity in use without any contract alterations.
Use Cases Covered by This Evaluation
This Magic Quadrant focuses on the following common use cases, independent of the type or types of infrastructure used for the associated workloads:
  • E-business hosting for digital marketing sites, e-commerce websites, SaaS, social websites, and similar modern online properties and applications. These workloads are often complex and are associated with a high rate of change in systems and application infrastructure.
  • Web-based business application hosting for corporate intranets and Web-based applications delivered to users primarily within enterprises. The applications may be commercial software or developed in-house; workloads are often relatively static and do not have a high rate of change.
  • Enterprise application hosting. Managed hosting for the infrastructure used to support large commercial software applications, such as those of Oracle, SAP and other enterprise software vendors. These workloads are often complex and require specialized knowledge to operate optimally, but do not have a high rate of change.

In 2016, Gartner will be making a number of significant changes to Magic Quadrants related to the hosting and Infrastructure-as-a-Service markets, including the retirement of some Magic Quadrants into overall Market Guides, and the launch of a brand new Magic Quadrant.
In 2015, we noted in both our Magic Quadrant for Cloud Infrastructure as a Service, Worldwide and our Magic Quadrant for Cloud-Enabled Managed Hosting, North America the rather significant changes that were taking place in the market for hosting and cloud infrastructure services. Through thousands of inquiries with end-user organizations over 2014 and 2015, Gartner has watched as customers have evolved their view of the marketplace. The outsized mindshare that hyperscale Infrastructure-as-a-Service platforms such as Amazon Web Services, Microsoft Azure, or Google Compute Engine have obtained has led buyers to analyze these offerings as far more than a vendor or a technology … but as more of an overall “strategic platform” for their organizations to build new and innovative/disruptive applications on over the next decade. This is especially true among North American clients.
Therefore Gartner will be making the following changes to our Magic Quadrants in the hosting and IaaS markets in 2016:
  • First, Gartner will be launching a new “Magic Quadrant for Public Cloud Infrastructure Managed Service Providers, Global” in 2016. More details on this Magic Quadrant will be available soon on Lydia Leong’s blog.
  • Second, in order to make room for the new Magic Quadrant for Public Cloud Infrastructure Managed Service Providers, and because buyer behavior in North America has moved the most towards this direction, we have retired our Magic Quadrant for Cloud-Enabled Managed Hosting in North America. In its place, we will be publishing a North American Market Guide for hosting for our end-user clients, roughly at the same time last year’s Magic Quadrant was published (July).
  • Third, in Europe and Asia-Pacific there is still more of a focus on locally-hosted services than in North America, therefore our Magic Quadrants for Cloud-Enabled Managed Hosting will continue in those markets but will be changing their focus slightly, as represented by their new titles – Magic Quadrant for Managed Hybrid Cloud Hosting.


Magic Quadrant for Cloud-Enabled Managed Hosting, North America, 2015

Gartner Magic Quadrants tend to evolve over time as technologies and buyer expectations mature, and our views on the hosting market are no exception.  Gartner has been publishing Magic Quadrants in the hosting market since 
2004 1998, which later became a combined hosting and cloud IaaS Magic Quadrant in 2009 (link) and now the two exist as separate Magic Quadrants.  The first thing that most readers will notice in this year’s MQ is the change in title –Cloud-Enabled Managed Hosting.

This is not simply a cloudwashing of our previous Magic Quadrant for Managed Hosting, the term Cloud-Enabled encapsulates how we view the market as evolving at this point in time.   In a nutshell, Gartner expects that Cloud-Enabled Managed Hosting will evolve managed services over the next several years … much like Infrastructure-as-a-Service has done to infrastructure provisioning and management over the past several years.

Why has the name of the Magic Quadrant for Managed Hosting changed to “Cloud-Enabled Managed Hosting”?
These new Magic Quadrants cover the market that is created by the intersection of managed services and a cloud-enabled infrastructure platform (which might or might not be cloud IaaS).  These magic quadrants will begin to place more focus more on the service layer on top of the infrastructure, rather than the infrastructure itself.

Magic Quadrant for Cloud-Enabled Managed Hosting, North America, 2014

By Jon

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