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J’son & Partners Consulting represents the results of Russian IaaS market research. Services taken into account are provided to corporate clients by means of data-centers located in Russia.

 

IaaS (Infrastructure-as-a-Service) market research covers virtual servers provided to corporate customers as a cloud service. Cloud storages are not taken into account in the present report. IaaS granted to mass customers (B2C) and services provided from data-centers located abroad are excluded from the estimation as well.

 

According to J’son & Partners Consulting, IaaS market in monetary terms amounted to 2.6 billion rubles with annual market growth at 26%. This value makes merely 10% of overall virtual and physical servers consumption in monetary terms.

 

According to our estimations, IaaS market will reach up to 3.4 billion rubles by the end of 2015. The value of IaaS consumption estimated in the present report is about 30% of overall IaaS consumption in Russia, which includes B2C, services provided by international players from data-centers located abroad and cloud storages (without processing).

 

 

In 2014 the lLeader by IaaS revenue from IaaS in 2014 was I-Teco with market share of 22%. The second largest market player with 15% market share was CROC. At the third and the fourth places correspondingly were IT-GRAD and DataLine were at the third and the fourth places correspondingly. It is noticeable that 4 of the TOP-5 IaaS providers by revenue are substantially working with large business (annual ARPU is more than 500 thousand rubles). The top three companies with annual ARPU less than 500 thousand rubles were Cloud4Y, Inoventica Services и ActiveCloud.

 

 

The number of IaaS providers in Russia is increasing every year in Russia, thatwhich confirms significant market growth and effectiveness of “cloud business model” as well.

 

According to J'son & Partners Consulting,: 24 thousand companies have been using IaaS (maintained by Russian providers) in 2014.

 

DRIVERS AND BARRIERS

 

Unlike SaaS and BPaaS markets, IaaS main drivers and barriers are mainly technological.

 

A fast growth of the stored consolidated corporate data is the main driver. It is not only about the growth of its value properly, but it is also about consolidation processes that are particularly based on desktop and software virtualization. Moreover, it is caused by the intensivety growth of completely digital transactions that demand for continuous expansion of computing capacities and storages.

 

IT-infrastructure conversion to a hybrid cloud becomes highly attractive in conditions of corporate IT-budgets optimization necessity, especially in the part of capital expenses. Hybrid cloud infrastructure combines virtualized private IT-resources and public IaaS that are involved during peaks of load at the computing infrastructure and to store part of the corporate data.

 

Main barriers in realization of such an approach are technological limitations as well. Such limitations are on the database level for heavy business applications, such as ERP, telecom billing, automated banking systems, processing and for the number of others. DBMSs that are being used now do not allow cloud scaling of involved computing capacities. The solution was presented in 2014 – some vendors released new versions which allow dynamic connection of external cloud capacities. However, the migration process of big applied systems to such DBMSs is quite prolonged and it will obviously take not less than three years.

 

The problem is not only the necessity of providing a virtual server as a cloud service to an application, but of providing a complete virtual container (so-called software defined data center) that includes virtual storages and software-defined network. It will take not less than three years as well from IaaS providers and physical networks operators to deploy software-defined infrastructure necessary to form such virtual containers.

 

LONG-TERM FORECAST

 

By cConsidering of these factors, the forecast up to 2019 is made on the assumption that dynamics of the estimated IaaS market will be nonlinear: there will be a moderate linear growth by 25% in a year for the period of 2015-2017 and a transition to an accelerated growth in the period of 2018-2019.

 

It can be expected that in 2019 the concerned IaaS market will amount 12.5 billion rubles in comparable prices. Overall corporate consumption value of cloud servers capacities (including services provided from data-centers located abroad) will reach 18 billion rubles, which will compose about 40% of the total virtual and physical servers consumption in Russia in 2019.

 

 

OPINION OF THE INDUSTRY REPRESENTATIVES

 

During the research, J'son & Partners Consulting surveyed representatives of the key market players and found out what do they think about IaaS development in Russia.

 

- What are the main drivers for the cloud market development in Russia?

 

Andrian Bushin

ActiveCloud, Business Development Director

 

In the nearest future a sharp increase in the value of currency, changing economic situation in the country and adopted legislative acts that demand to store personal data in Russia will serve as the main growth factors for the Russian cloud services market. Companies reduce its capital expenses for maintenance and development of an existing IT-infrastructure during the crisis. Customers will gaze more and more at new instruments for implementation of new IT tasks – from the equipment leasing to the cloud services. The prices for these instruments, for sure, will grow, but still will remain significantly cheaper than purchasing server equipment in the ownership or using foreign cloud services.  

 

Maxim Zaharenko

Oblakoteka, General Director

 

Mistrust and unwillingness to change the paradigm of IT are still the barriers. But both are becoming weaker as the quantity of the successfully placed IT-systems in the cloud is incrementing. The driver is current economic situation and, above all, the lack of funds for purchasing equipment and software, and, consequently, the desire to replace CAPEX with OPEX.

 

Pavel Baklanov

Oversun, Technical Director

 

Currency exchange rate and economic situation were the main drivers this year. An increment of inquiries from customers by the end of the year has grown considerably. First of all, it is a result of costs elevation for foreign cloud services in Russian currency. Many companies in Russia could not afford themselves foreign hosts, so they drew attention to the Russian market. Currency fluctuations risks are high as well. Companies cannot plan their budgets when the IT costs can grow twice in a week. They need a certainty, and this could be achieved only when services are purchased in rubles. Also the profit from using cloud services instead of classical infrastructure began to be much more noticeable for many companies in conditions of the crisis. More often during the crisis exactly the IT costs are being cut. Taking into account a sharp rise in prices of software and hardware, usage of cloud services appears to be the only possibility. Due to its usage one can significantly optimize costs and revise an approach to the IT implementation.

 

- How would the amendments adoption to the federal law №152 (242-FL) affect the IaaS market in Russia?

 

Ekaterina Hrobostova

Inoventica Group, Press Secretary

 

 

One of the drivers for the cloud service market in Russia is, definitely, the implementation of the claims described in the federal law №152. Indeed, the organization of an infrastructure that processes personal data in the «cloud» of a service provider is much more efficient than a similar decision to organize it on one’s own. It concerns both time and money issues. Especially now, in conditions of financial and economic instability. As regards to the activities of foreign companies, which is related to the processing of personal data of Russian citizens, an impact on the IaaS market provides the federal law №242, binding to place relevant IT-infrastructures on the Russian territory by the first September 2015. So Paypal, an American payment system, has already placed servers for storing personal data of Russian citizen in Russia. Inoventica Services implements similar projects.

 

Evgeny Bessonov

Cloud4Y, Head of Marketing Department

 

Certainly, we can note a growing interest to our service, «Cloud FL 152», which frees an operator of personal data from costs on establishing and maintaining a secured IT-infrastructure to meet the requirements of the 152-FL.

 

In addition, in the nearest future, another law (242-FL) will become legal from the first September 2015, as you know. Even now many companies initiated the transfer of an IT-infrastructure with personal data of Russian citizens into our Russian cloud. Understanding significant importance of these activities for business, our company has established the customer's infrastructure migration process in a short term.

 

Evgeny Schepilov

«I-Teco», Head of Services Direction

 

 

Amount of appeals connected with claims implementation of 152-FL has increased. It is connected not only with data transfer from abroad. An important factor is a switch-over of customers to use an infrastructure which is being rented by a provider. In this case a client obtains a number of advantages that include the guarantee of data security: by definition, a provider establishes the maximum protection level in its own infrastructure, as the provider should be ready for any complexity of customer requirements in this matter. The IaaS segment has a great potential for development: according to a last year’s survey, the market share of these solutions was about 5% in Russia.

 

Maxim Berezin

CROC, Head of virtual data-center

 

This law encourages companies to be more interested in matters of personal data storage on Russian servers and of possible consequences of non-compliance with legal requirements. So, some companies have already started the migration process. Thus, now we are transferring data of one foreign bank which operates in Russia to the servers of CROC’s outsourcing data-center. In a perspective we expect the law to become a driver of cloud services’ growth in general.

 

We can also note a sharp increase in the number of requests from Western providers of services and from their partners. As a rule, they are working in the interest of global companies that are cooperating with Russian users and customers as well. And this means that, starting from the first of September, foreign service providers should learn how to work with somebody of Russian cloud market players, conduct partnership and start to resell their services, one way or another. In this case CROC is quite an attractive variant, as the company’s «cloud» supports the compatibility with Amazon EC2, S3 API.

 

- How will the current economical situation influence the cloud services market and, in particular, the IaaS market?

 

 

Alexey Sevastyanov

DataLine, First Deputy General Director

 

We are tuned quite positively at this point. Cloud services and IaaS in particular are helping to optimize the existing IT-costs, to provide resources for a new project involving minimum of investments and to control them with a certain level of flexibility. Many companies now are heading towards reducing costs, including IT-costs as well.

 

Services of a cloud provider with professional IT-infrastructure and personnel could be an intelligent alternative to the costs of updating and creating an infrastructure from scratch, this is especially topical for the SMB sector.

 

Dmitry Gachko

IT-GRAD, General Director

 

From my point of view, the current crisis is a powerful driver for the growth of the cloud service market. The market will not be simply growing, it will be developing and improving, complementing the existing services with new functions, more and more transforming into a complete replacement for a private IT-infrastructure. Saas, VDI in DaaS models, hybrid solutions will be used more actively. Also, it is the most important thing that public cloud solutions (OpenStack Swift, Ceph, Hadoop) will be developing for enterprise customers.

 

Besides that, the market will be slowly structured in terms of leading companies appearance. There will be more clear positioning and customer focusing, what will lead to an appearance of new industry leaders.

 

Detailed results of the research are available in the full version of the report «Russian IaaS market (services provided by Russian companies to corporate clients), results of 2014»

 

Example of the report content

 

  1. Summary
  2. Introduction
  3. Analysis of services markets in Russia that are competing or technologically preceding the IaaS

3.1. IT-outsourcing and system integration market

3.2. Russian data-centers market

3.3.Offer on the Russian data-centers market

3.3.1. Market development forecast

3.3.2.Competion on the data-centers market

3.4. Secondary data-centers market: the value and the объемиструктурапоуслугам

3.4.1.The demand level for services

3.4.2.The main user segments of services

3.5. Drivers and barriers of the market development

3.5.1. Competition with foreign companies

3.5.2. Competition with private data-centers

3.6. Security as a limiting factor

  1. Analysis of Russian IaaS market players activity

4.1. Description of the service

4.2. Comparison of business-models of Russian Iaas operators

4.2.1. Chargeable parameters of the service and tariffs comparison

4.2.2. Comparison of cloud-providers’ tarrifs with competing services

4.2.3. Profiles of the largest players

4.3. Russian IaaS market: estimation from the «top»

4.3.1. By revenue

4.3.1. By quantity of clients

4.4. Market development factors

4.4.1. Infrastructure transformation

4.4.2. Legislative innovations

4.4.3. Others

  1. Conclusions

 

This Information Note is prepared by J’son & Partners Consulting, We strive to provide factual and prognostic data that fully reflect the situation and are available to us before issuing the material. J’son & Partners Consulting reserves the right to revise the data after publication of new official information by the market players.

 

 

OPINION OF THE INDUSTRY REPRESENTATIVES

During the research, J'son & Partners Consulting surveyed representatives of the key market players and found out what do they think about IaaS development in Russia.

 

- What are the main drivers for the cloud market development in Russia?

 

Andrian Bushin

ActiveCloud, Business Development Director

In the nearest future a sharp increase in the value of currency, changing economic situation in the country and adopted legislative acts that demand to store personal data in Russia will serve as the main growth factors for the Russian cloud services market. Companies reduce its capital expenses for maintenance and development of an existing IT-infrastructure during the crisis. Customers will gaze more and more at new instruments for implementation of new IT tasks – from the equipment leasing to the cloud services. The prices for these instruments, for sure, will grow, but still will remain significantly cheaper than purchasing server equipment in the ownership or using foreign cloud services.    

 

 

Maxim Zaharenko

Oblakoteka, General Director

Mistrust and unwillingness to change the paradigm of IT are still the barriers. But both are becoming weaker as the quantity of the successfully placed IT-systems in the cloud is incrementing.  The driver is current economic situation and, above all, the lack of funds for purchasing equipment and software, and, consequently, the desire to replace CAPEX with OPEX.

 

 

Pavel Baklanov

Oversun, Technical Director

Currency exchange rate and economic situation were the main drivers this year.  An increment of inquiries from customers by the end of the year has grown considerably. First of all, it is a result of costs elevation for foreign cloud services in Russian currency. Many companies in Russia could not afford themselves foreign hosts, so they drew attention to the Russian market. Currency fluctuations risks are high as well. Companies cannot plan their budgets when the IT costs can grow twice in a week. They need a certainty, and this could be achieved only when services are purchased in rubles. Also the profit from using cloud services instead of classical infrastructure began to be much more noticeable for many companies in conditions of the crisis. More often during the crisis exactly the IT costs are being cut. Taking into account a sharp rise in prices of software and hardware, usage of cloud services appears to be the only possibility. Due to its usage one can significantly optimize costs and revise an approach to the IT implementation.

 

 


 

- How would the amendments adoption to the federal law №152 (242-FL) affect the IaaS market in Russia?

 

Ekaterina Hrobostova

Inoventica Group, Press Secretary

One of the drivers for the cloud service market in Russia is, definitely, the implementation of the claims described in the federal law №152. Indeed, the organization of an infrastructure that processes personal data in the «cloud» of a service provider is much more efficient than a similar decision to organize it on one’s own. It concerns both time and money issues. Especially now, in conditions of financial and economic instability. As regards to the activities of foreign companies, which is related to the processing of personal data of Russian citizens, an impact on the IaaS market provides the federal law №242, binding to place relevant IT-infrastructures on the Russian territory by the first September 2015. So Paypal, an American payment system, has already placed servers for storing personal data of Russian citizen in Russia. Inoventica Services implements similar projects.

 

 

Evgeny Bessonov

Cloud4Y, Head of Marketing Department

Certainly, we can note a growing interest to our service, «Cloud FL 152», which frees an operator of personal data from costs on establishing and maintaining a secured IT-infrastructure to meet the requirements of the 152-FL.

In addition, in the nearest future, another law (242-FL) will become legal from the first September 2015, as you know. Even now many companies initiated the transfer of an IT-infrastructure with personal data of Russian citizens into our Russian cloud. Understanding significant importance of these activities for business, our company has established the customer's infrastructure migration process in a short term.

 

Evgeny Schepilov

«I-Teco», Head of Services Direction

Amount of appeals connected with claims implementation of 152-FL has increased. It is connected not only with data transfer from abroad. An important factor is a switch-over of customers to use an infrastructure which is being rented by a provider. In this case a client obtains a number of advantages that include the guarantee of data security: by definition, a provider establishes the maximum protection level in its own infrastructure, as the provider should be ready for any complexity of customer requirements in this matter. The IaaS segment has a great potential for development: according to a last year’s survey, the market share of these solutions was about 5% in Russia.

 

Maxim Berezin

CROC, Head of virtual data-center

This law encourages companies to be more interested in matters of personal data storage on Russian servers and of possible consequences of non-compliance with legal requirements. So, some companies have already started the migration process. Thus, now we are transferring data of one foreign bank which operates in Russia to the servers of CROC’s outsourcing data-center. In a perspective we expect the law to become a driver of cloud services’ growth in general. 

We can also note a sharp increase in the number of requests from Western providers of services and from their partners. As a rule, they are working in the interest of global companies that are cooperating with Russian users and customers as well. And this means that, starting from the first of September, foreign service providers should learn how to work with somebody of Russian cloud market players, conduct partnership and start to resell their services, one way or another. In this case CROC is quite an attractive variant, as the company’s «cloud» supports the compatibility with Amazon EC2, S3 API.

- How will the current economical situation influence the cloud services market and, in particular, the IaaS market?

 

Alexey Sevastyanov

DataLine, First Deputy General Director

We are tuned quite positively at this point. Cloud services and IaaS in particular are helping to optimize the existing IT-costs, to provide resources for a new project involving minimum of investments and to control them with a certain level of flexibility. Many companies now are heading towards reducing costs, including IT-costs as well.

Services of a cloud provider with professional IT-infrastructure and personnel could be an intelligent alternative to the costs of updating and creating an infrastructure from scratch, this is especially topical for the SMB sector.

 

 

Dmitry Gachko

IT-GRAD, General Director

From my point of view, the current crisis is a powerful driver for the growth of the cloud service market. The market will not be simply growing, it will be developing and improving, complementing the existing services with new functions, more and more transforming into a complete replacement for a private IT-infrastructure. Saas, VDI in DaaS models, hybrid solutions will be used more actively. Also, it is the most important thing that public cloud solutions (OpenStack Swift, Ceph, Hadoop) will be developing for enterprise customers.

Besides that, the market will be slowly structured in terms of leading companies appearance. There will be more clear positioning and customer focusing, what will lead to an appearance of new industry leaders.