Organizations of all stripes are undergoing a digital transformation that involves harnessing the power of data to drive business decisions and opportunities. But they’re running into roadblocks because they often lack the IT infrastructure and resources to effectively deal with all that data—presenting a prime opportunity for cloud service providers (CSPs) to fill the void.
Research by Gallup shows organizations that use their data to identify customer behaviors outperform competitors by 85% in sales growth and more than 25% in gross margin. But it takes expertise to achieve such results, and a recent Gartner survey showed more than 90% of organizations have yet to reach a “transformational” level of maturity in data and analytics.
A Forrester report found a majority of enterprises haven’t made the appropriate investments in resources and expertise required to extract transformative business value from machine learning, deep learning, and large data sets. But the same report suggests 70% of enterprises expect to implement some form of artificial intelligence (AI) over the next 12 months, up from 40% in 2016 and 51% in 2017.
Clearly, organizations are going to need some help in reaching their goals around big data initiatives, presenting opportunities for CSPs in at least three service areas.
First is storage-as-a-service (STaaS), which allows companies to store data in the cloud in an archived format, paying only for the storage capacity they use. That can be more cost-effective for customers, removing the capital expense of storage equipment as well as the operational expense of managing it. What’s more, businesses get the ability to store and retrieve any amount of data from any source, including business applications, data from factory sensors, websites, mobile apps, or wearable devices. STaaS can also make it easier for customers to meet security and compliance requirements—and addressing specific regulations can be a differentiator for a CSP. Providing powerful analytics to be run on STaaS data is another potential differentiator.
Similarly, database-as-a-service (DBaaS) can help customers drastically speed up application development, improve infrastructure utilization, and maintain consistent database quality and configuration—all while significantly reducing costs. DBaaS removes many operational headaches and tasks, including administration ones such as configuration, optimization, provisioning, backup, security, monitoring, networking, automation, upgrades, and maintenance. It also removes any concerns about performance and scalability, compatibility of hardware and software, and the increasingly difficult task of finding employees with the technical expertise to manage databases. While some larger CSPs already offer DBaaS, it’s otherwise relatively uncommon, making it a potential differentiator that can help CSPs build credibility with customers.
The same goes for the third offering, big data-as-a-service (BDaaS), an emerging category that can cover a range of technologies. The general opportunity lies in obviating the need for customers to make significant investments in the hardware and open source software required to analyze very large data sets. The CSP essentially abstracts the underlying complexity of big data processing. BDaaS is a potentially broad category that can include offerings such as multiple data processing engines for dealing with various forms of unstructured data, training deep learning algorithms, “cleaning” data, and data security. A good BDaaS service will lay the foundation upon which customers can start applying AI solutions.
The opportunity here is large. For example, the predicted compound annual growth rates (CAGRs) for the global DBaaS and STaaS markets are expected to be 65% and more than 40%, respectively, from 2016 through 2020. And while some larger CSPs do offer such services, it’s far less common outside the largest players, making these services a potential differentiator.
Of course, it will take the proper infrastructure on the CSP side to deliver on the promise of these services. Intel® can help direct you to the most appropriate technology base for each service, whether it’s software-defined storage for STaaS or the latest Intel technologies to power DBaaS offerings.
To learn more, download the free e-book, “Data Services: A Guide for Cloud Service Providers.”