Magic Quadrant for Cloud-Enabled Managed Hosting, Asia/Pacific

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 — with cloud management platform software to facilitate self-service and rapid provisioning with managed services (see "Technology Overview for Cloud-Enabled System Infrastructure"). The infrastructure platform may be located in a service provider's data center, or optionally at the customer's data center. Either way, it requires standardized deployment across all customers and uses a single code base. At a 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.

CEMH 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 CEMH, see "Technology Overview for Cloud-Enabled Managed Hosting.")

This Magic Quadrant focuses on the enterprise-class CEMH 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 premises 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

CEMH services must be available to customers on contracts shorter than those 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, CEMH should afford customers the ability to elastically change the amount of capacity and managed services in use, without requiring a contract alteration.

Use Cases Covered by This Magic Quadrant

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 supporting 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.

All three use cases typically involve tactical sourcing decisions that center on one application or a single group of closely related applications. They are typically best served by a best-of-breed provider that has strong operational expertise with similar solutions. However, many customers expand their use of hosting over time, and the choice of provider may become a strategic decision.

As customers begin to deal with the challenges of bimodal IT within their environments (see "Bimodal IT: How to Be Digitally Agile Without Making a Mess" and "Best Practices for Planning a Cloud Infrastructure-as-a-Service Strategy — Bimodal IT, Not Hybrid Infrastructure"), cloud-enabled services are often sought for Mode 2 "agile" IT needs, placing more emphasis on developer productivity and business agility. However, a substantive amount of CEMH is bought for Mode 1 traditional IT, with an emphasis on cost reduction, safety and security. This Magic Quadrant considers both sourcing patterns and their associated customer behaviors and requirements.

In the CEMH market, it is difficult to find a provider that excels in all areas — providers may be leaders in some areas but lag behind in others. As a result, it is important to match your use case with a vendor that excels at meeting your particular needs. Smaller providers may do one thing extraordinarily well, but may not have comprehensive sets of services that enable them to address a broad array of use cases.

It is also crucial to note that this Magic Quadrant shows the overall position of a vendor in the Asia/Pacific CEMH market specifically; it does not consider a provider's strength in other adjacent areas in IT services. Therefore, it is important to look beyond the major players in the Magic Quadrant when selecting a service provider, especially if you have an unusual need. The perfect vendor for your needs might, for example, be a Niche Player.

Gartner publishes similar Magic Quadrant reports for North America and Europe to provide a global view of the marketplace (see "Magic Quadrant for Cloud-Enabled Managed Hosting, North America" and "Magic Quadrant for Cloud-Enabled Hosting, Europe").

Types of Business Covered by This Magic Quadrant

This Magic Quadrant focuses on CEMH services for the following types of business:

• Western multinational companies (MNCs) operating in Asia/Pacific: These businesses typically host their IT infrastructure in one or two regional locations (hubs), typically Singapore and Hong Kong, and — to a lesser extent — in Japan and Australia because fewer MNCs have regional headquarters there. In some instances, they may require local IT hosting in India for back-end IT operations, and in China to support their large businesses there. Providers that address this segment must have presence in both Singapore and Hong Kong and to a lesser extent in the other markets.
• Asia/Pacific businesses, including government and midmarket companies: Their operations are typically domestic in nature. They require their IT infrastructure to be located within their markets for a variety of reasons, of which data security, data sovereignty and proximity hosting for application performance are the most important.

Source: Gartner (November 2015)

Vendor Strengths and Cautions

CenturyLink

CenturyLink is a global communications service provider (CSP), with a track record in managed hosting in the U.S. and Europe. It targets enterprises, including MNCs. It offers multitenant and single-tenant services. Its cloud data centers in Australia, Singapore, Hong Kong, Japan, India and China are connected to its data centers in the U.S. and Europe to provide global coverage.

Strengths

• CenturyLink has a competitive cloud platform. The platform, CenturyLink Cloud, offers cloud-native capabilities, an easy-to-use portal, and good governance and management features. It also offers a high level of automation for provisioning and management of managed services.
• CenturyLink has a broad range of managed services, including database management, security management, disaster recovery, and managed SAP and SAP Hana services. It is also introducing more application services, including database as a service and WordPress as a service.
• CenturyLink is expanding its consulting and professional services team significantly in the region to compete for large or complex projects. New capabilities include SAP consultancy and implementation, application development and support, and predictive analytics.

Cautions

• CenturyLink's strategy to move up the value stack into the applications domain will require a new level of investment in IT skills. It is still in the early stage of implementing the strategy, with support for a limited range of applications.
• CenturyLink does not support third-party public cloud providers, such as Amazon Web Services (AWS) or Microsoft Azure, an increasingly important requirement for enterprises. Its plan to evolve into an IT solutions provider is not complete without third-party cloud capabilities.
• CenturyLink has multiple cloud IaaS offerings. It is focusing its development on its CenturyLink Cloud, with no development in its other platforms. Customers of the earlier platforms should migrate to the new platform in the future.

CtrlS Datacenters

CtrlS Datacenters is a managed hosting, as well as cloud IaaS provider in India. It targets enterprises. CtrlS offers multitenant and single-tenant cloud-enabled managed hosting services. Its cloud data centers are located in Hyderabad, Mumbai and Delhi. It also has data centers in the Middle East and the U.S.

Strengths

• CtrlS offers high-availability services through its high-grade data centers, multiavailability zones and four-way disaster recovery architecture, with a zero data loss guarantee backed by service-level agreements (SLAs). Due to this implementation, it is particularly strong in the banking and finance sector.
• CtrlS provides a wide range of managed services that include security, middleware and databases. It offers a range of databases as a service, including Oracle, MySQL, MS SQL Server, MongoDB, and NoSQL. It has also introduced a Docker-based container management service.
• CtrlS has strong software skills and invests significantly in R&D. Its cloud platform supports a choice of hypervisors, including VMware, Xen and Hyper-V. It also has a hybrid cloud solution which can integrate third-party cloud services such as AWS and Google Cloud, with the ability to deploy, monitor, and manage infrastructure in real time.

Cautions

• CtrlS is expanding its presence outside India to tap new growth opportunities. While it has cloud data centers in the U.S. and the Middle East, it is still in the process of setting up data centers in other Asian markets. It plans to launch cloud data centers in Singapore, Japan, Hong Kong, and Australia in 2Q16, which will change its regional coverage significantly.
• CtrlS staff and skill sets are concentrated in India. It would require significant investments in cloud infrastructure, professional services, and sales and marketing in the markets it wants to compete in.

Datapipe

Datapipe is a U.S.-based managed cloud service provider. Its target market is multinational corporations (MNCs). It offers multitenant and single-tenant services. Its cloud data centers in Hong Kong, China, Singapore and Australia are connected to its data centers in the U.S., Europe and South America to form a global cloud platform.

Strengths

• Datapipe supports MNCs with regional requirements through its data centers in Hong Kong and Singapore, which are key regional hubs. It can also support domestic requirements in China, a key market for MNCs. It operates dual data centers in all locations.
• Datapipe is among the few providers that support AWS as well as Microsoft Azure for infrastructure and managed services. Its cloud portal provides a "single pane of glass" for ordering, orchestration and management of AWS, Azure, and its own cloud services.
• Datapipe provides a broad range of managed services. These include storage, security and database management services, with experience in cloud migration for large customers. This is supported by high-touch customer service and support.
• Datapipe offers a simple, customer-friendly pricing scheme. The pricing includes infrastructure and managed services up to the application layer, with a choice of hourly and monthly rates.

Cautions

• Datapipe has a relatively small presence in Asia/Pacific. Consequently, its customer base is small, although many customers are significant in terms of size and complexity.
• Datapipe's operations are concentrated in Hong Kong, with a small presence in China and Singapore. Its Australian data centers are also new, going live in December 2015.
• Datapipe is not targeting Chinese enterprises for now, even though it's among the earliest providers to have a direct presence in China.

Dimension Data

Dimension Data is a global information and communication technology (ICT) solutions and service provider, with a strong presence in Asia/Pacific. It is owned by the NTT Group in Japan. Its target markets are enterprises, including MNCs. It offers multitenant and single-tenant services. Its cloud data centers in Australia, New Zealand, Japan, Hong Kong, Singapore, India and Indonesia are connected to its data centers in the Americas, Europe, and South Africa to form a global cloud platform.

Strengths

• Dimension Data's Managed Cloud Platform provides a single, unified architecture for its public and private cloud services, with a common management platform for both environments. It also has strong regional coverage, with the ability to provide in-country support in many markets.
• Dimension Data widened its product portfolio to support enterprise requirements. It is SAP-certified for cloud, hosting and SAP Hana. It also offers hosted Microsoft Exchange and SharePoint, database as a service, and a security information and event management (SIEM) service.
• Dimension Data is gaining strong regional sales traction, with the ability to win a variety of customers in different markets, including India and Indonesia, where it has early mover advantage. This is enabled by its strong regional sales presence and improving professional services capabilities.

Cautions

• Dimension Data is becoming more successful selling private clouds to large enterprises. In this segment, it faces competition from large IT service providers with stronger enterprise application expertise.
• Dimension Data's revenue is aggregated from a number of markets, and is still fairly small at this stage, despite its strong revenue growth.
• Dimension Data's cloud platform is not well-differentiated, even though it has enhanced its platform significantly during the past year. It also lacks hybrid cloud management capabilities, and has limited experience supporting third-party cloud services.

Fujitsu

Fujitsu is a global IT service provider, with a track record for outsourcing and managed services. Its target markets are enterprises. It offers multitenant and single-tenant services. Its cloud data centers in Japan, Australia, Singapore, China, Thailand, and the Philippines are connected to its cloud data centers in the Americas and Europe to form a global cloud network.

Strengths

• Fujitsu has a good regional data center footprint, with a reasonable range of managed services, including support for security, middleware, databases, and select applications. It is SAP-certified for cloud, hosting, and SAP Hana. It has also introduced SAP Infrastructure as a Service.
• Fujitsu has a long track record in managing large-scale IT infrastructure and operations in Asia. Customers in Asia say it provides a good quality of service, with responsive service and support. It continues to invest in automation and management tools to improve its support capabilities.
• Fujitsu has introduced a new OpenStack-based platform, Fujitsu Cloud Service K5, which will integrate its existing platforms — Fujitsu Cloud IaaS Private Hosted, which supports VMware, and Fujitsu IaaS Trusted Public S5, which supports open-source Xen.

Cautions

• Fujitsu puts more emphasis on its VMware-based platform, which comes with the full range of managed services and is available in all locations. In contrast, its open-source Xen-based platform has limited managed services, and is available only in Japan, Australia and Singapore.
• Fujitsu's OpenStack K5 platform is new and currently available only in Japan, but it has a firm plan to roll out the platform in all regions quickly, with a focus to provide a consistent platform globally by 2017.
• Fujitsu is showing good revenue growth, but it is more successful in private clouds, and less in multitenanted services, where the future competition is.

Hewlett Packard Enterprise

Hewlett Packard Enterprise (HPE) is a global IT service provider, with a track record for outsourcing and managed services. Its target markets are enterprises. It offers multitenant and single-tenant services. Its cloud data centers in Australia, New Zealand, Japan, Singapore, India and China are connected to its data centers in the U.S. and Europe to form a global cloud network.

Strengths

• HPE has a good regional data center footprint, with a presence in several regional hubs, as well as China and India. Its service, HP Helion Managed Cloud, provides a good choice of managed services, including disaster recovery, security and database management. It is introducing more applications as a service, including Microsoft SQL and SAP Hana as a service.
• HPE has good advisory capabilities and applications, as well as migration expertise, putting it in a favorable position to support large enterprises with complex requirements. It is beginning to make inroads into the large enterprise segment.
• HPE is making it easier for customers to contract its cloud services, including simplified and modular contracts, commercial innovation for contracts, and more flexibility for customized SLAs.

Cautions

• HPE's cloud platform has limited differentiation. It has a roadmap to enhance its cloud platform and hybrid cloud enablement capabilities, but the development is focused on supporting enterprise workloads, rather than applications with public cloud requirements.
• HPE has limited standard managed services for middleware and applications for e-business hosting. However, these are available on customized basis.
• HPE lacks a cloud-enabled data center in Hong Kong, an important location for MNCs. Its cloud presence in China is also new, and it has yet to gain traction with Chinese enterprises.

IBM

IBM is a global IT service provider with extensive presence in Asia. It has a track record in IT outsourcing. Its target markets are enterprises and government. It offers multitenant and single-tenant services. Its data centers in Australia, Japan, Singapore, Hong Kong, China and India are connected to its data centers in the U.S. and Europe to form a global cloud platform.

Strengths

• IBM has strong consulting and outsourcing capabilities, as well as experience in enterprise applications, in particular SAP and Oracle, putting it in a favorable position to support large enterprises with complex cloud requirements.
• IBM has a track record for managing large-scale IT infrastructure and operations, and is now willing to take on stand-alone, cloud-enabled managed hosting projects. It provides a broad range of managed services, including disaster recovery, database management and security.
• IBM is expanding its cloud data center coverage aggressively to provide global delivery capabilities. It now has coverage in the six key Asian markets, including China and India. All of its data centers are connected by a high-speed global network.

Cautions

• IBM has two platforms — Cloud Managed Services and SoftLayer. They have different capabilities and are managed separately. Customers need to deploy IBM Cloud Orchestrator to manage both environments together.
• IBM's data center coverage is less extensive than it appears on the surface. IBM Cloud Managed Services is only available in Australia, Japan and China, while SoftLayer is available in all locations. This limits the ability of customers to access both platforms in all locations.
• IBM is beginning to win more customers with its increased emphasis on cloud, although the number of customers is still small at this stage. It also tends to win customers based on its broader IT capabilities, rather than its cloud platform.

IIJ

IIJ is a major hosting and managed service provider in Japan. Its target markets are enterprises and midmarket companies. It offers multitenant and single-tenant services. Its cloud data centers in Japan, China, Singapore and Indonesia are connected to its data centers in the U.S. and the U.K. to provide international cloud coverage.

Strengths

• IIJ has good domestic coverage in Japan, with six cloud data centers supporting a wide range of customers. It is expanding its coverage overseas to support Japanese customers and target opportunities in other markets. It is reporting strong initial adoption in Indonesia, its latest market.
• IIJ offers a good range of managed services, including security management and database management. It is SAP-certified for cloud services, including SAP Hana, and is gaining experience implementing SAP on its platform.
• IIJ is strong in product development and is constantly introducing new products. It has launched a new cloud platform, Infrastructure P2, which integrates its open-source-based, VMware-based and bare metal resource under a single management portal, sharing a common NFS storage for data store.

Cautions

• While IIJ has expanded its coverage overseas, its initial expansion was driven by Japanese MNC requirements. It is now more focused on tapping local opportunities, including using local partners to go to market, but it is still in the early stage of market development.
• IIJ has not rolled out its broad portfolio of products to all international markets due to limited market maturity in these markets. It also does not provide hybrid cloud management, even though it is extending its support to third-party clouds.
• IIJ has gained significant experience supporting enterprise application requirements. However, it has yet to capitalize on its capability to offer transformation services with cloud-enabled managed hosting, instead of traditional IT integration and IT outsourcing.

NTT Communications

NTT Communications is a global CSP, wholly owned by the NTT Group in Japan. Its target markets are enterprises, including MNCs. It offers multitenant and single-tenant services. Its cloud data centers are located in Japan, Australia, Singapore, Hong Kong, Malaysia, Thailand and India, with plans to extend to China. The data centers are connected to its cloud data centers in the U.S. and Europe to provide a global cloud platform.

Strengths

• NTT Communications has very good geographic coverage, with presence in all the regional hubs, as well as several major developing markets. It also has a strong foothold in India through its subsidiary, NetMagic Solutions, a major managed hosting and cloud provider in India. It is in an advanced stage of integrating NetMagic into its global operations.
• NTT Communications provides a broad portfolio of managed services. This includes support for security, databases, middleware and select applications, such as SAP and SAP Hana. It has also introduced Oracle Database as a service, with an option for customers to bring their own licenses.
• NTT Communications continues to invest significantly in product development. It has launched a new OpenStack-based platform, which integrates its existing enterprise and public cloud IaaS platforms, as well as third-party cloud providers, under a single cloud management portal. New features include bare metal services, with support for multiple hypervisors and an API gateway for hybrid cloud management.

Cautions

• NTT Communications' new OpenStack-based platform will be available only in Japan in December 2015. It will be progressively rolled out across all markets, with global availability only at year-end 2016. Its existing enterprise cloud platform is not well differentiated.
• NTT Communications does not have a timeline to fully integrate NetMagic into the company, even though it is increasingly integrated along key functional lines, including product development, operations and support, and sales.
• NTT Communications is gaining experience supporting some mission-critical applications or use cases. However, it has limited experience in supporting a broad range of enterprise applications, which puts it at a disadvantage when competing against the large IT providers.]

Orange Business Services

Orange Business Services is a global CSP with extensive presence in Asia/Pacific. Its target customers are MNCs and enterprises in Asia. It offers multitenant and single-tenant services. Its cloud data centers in Australia, Singapore, and Hong Kong are connected to its data centers in Europe and the U.S. to form a global cloud platform.

Strengths

• Orange has experience with data center consolidation, virtualization and managed services in Asia. It has a consulting and professional services team, supported by well-defined methodologies and processes, to support customers with cloud migration.
• Orange has a good catalog of infrastructure and managed services, which gives it the flexibility to customize individual solutions for customers. It provides end-to-end service management, with quality of service and SLAs for network, IaaS and OS, and applications.
• Orange supports third-party cloud services, including AWS, Microsoft Azure, VMware vCloud Air, and Aliyun. Its cloud portal provides single sign-on access, provisioning and monitoring of third-party services, as well as workload portability between cloud services. However, the contract management is done directly between the customer and third-party cloud provider.

Cautions

• Orange has limited experience and professional services for supporting complex enterprise applications. To augment its capabilities, it has to rely on partnerships with strong IT services providers to deliver a complete solution.
• Orange's customer base is small, although it has gained significant experience with data center consolidation, virtualization and managed services for a small number of large customers in Asia.
• Orange has affirmed its commitment to cloud as a key growth initiative. However, it is highly focused on the MNC segment, and it's not clear if Orange wants to fully address local domestic opportunities. However, it has empowered Orange Asia/Pacific to invest and win domestic business in the region.

Rackspace

Rackspace is a U.S.-based hosting provider with a strong track record in managed hosting in the U.S. and the U.K. It targets enterprises, including MNCs. Rackspace offers multitenant and single-tenant hosting services. Its cloud data centers are located in Australia and Hong Kong. It also has data centers in the U.S. and Europe.

Strengths

• Rackspace has renewed its focus on managed services, its biggest strength. It now provides managed services for third-party clouds, including Microsoft Azure, VMware's vCloud Air and AWS. It is hiring more IT specialists to strengthen its managed services capability in the region.
• Rackspace provides superior service and support, which is well-validated by customers in Asia, the U.S. and the U.K. Consequently, customer retention is very strong. It is also reporting strong revenue growth, with rising contributions from Australia, even though it was late in the market.
• Rackspace is price-competitive. It also allows customers to buy managed services on a consumption basis, breaking down the prices of its managed services transparently. It also provides effective advisory services as part of its managed services at no extra charge.

Cautions

• Rackspace's presence in Asia is limited to Hong Kong and Australia. It lacks presence in Singapore, an important regional hub for MNCs. While it has signed up channel partners in China and India, it is unlikely to gain traction in these markets without a direct presence.
• Rackspace is developing a single pane of glass for hybrid cloud management, but this is not expected to be ready until 2016, and will initially be limited to Microsoft Azure.
• Rackspace is beginning to build a professional services team in Asia and Australia, but it is still very small, which limits its ability to support large or complex requirements. It is building a network of specialist professional services partners to augment its capabilities.

Sify

Sify is a major managed hosting and network service provider in India. It targets enterprises and midmarket companies. It offers multitenant and single-tenant, cloud-enabled managed hosting services. Its cloud data centers are located in Mumbai, Delhi and Bangalore in India.

Strengths

• Sify offers a high-reliability service in India. It operates high-grade data centers in three major cities, with a disaster recovery service. It also offers a wide range of managed services, including managed security, database management and middleware management.
• Sify has strong software skills, and invests significantly in R&D. Its cloud platform can support multiple hypervisors, including VMware, KVM, and Microsoft Hyper-V. Its cloud portal is also well-designed, providing ease of use and a useful choice of features.
• Sify has built up its skill set supporting the Microsoft environment, in addition to its experience in VMware. Its new capability has enabled it to win a significant number of government contracts that are Microsoft-based.
• Sify is introducing a new cloud platform with scale-out capabilities to compete more effectively for public cloud requirements. It is also extending its support to AWS and Microsoft Azure, including offering managed services on top of the third-party cloud providers.

Cautions

• Sify is more focused on traditional workloads, which requires a high proportion of managed services. It has limited experience supporting applications with cloud-native requirements.
• Sify's scale-out cloud platform, and its third-party cloud services, are new and untested. It needs to demonstrate these capabilities, including the ability to provide hybrid cloud management.
• Sify is an India-only player because it lacks infrastructure and presence outside its home market. This limits its ability to address opportunities that are emerging in other markets in Asia. It has set up a presence in the U.S. to support U.S. companies with hosting requirements in India.

Singtel

Singtel is the leading CSP, as well as major IT services provider, in Singapore. It also has strong presence in Australia through SingTel Optus. Its target customers are enterprises, including MNCs. It offers multitenant and single-tenant services. It has cloud data centers in Singapore, Australia and Hong Kong.

Strengths

• Singtel has a good portfolio of managed services, including management of databases, middleware, Web servers and application servers. It has a large IT services arm, which enables Singtel to handle large and complex environments.
• Singtel now supports third-party cloud services, including Microsoft Azure, AWS, and Aliyun (the leading public cloud IaaS provider in China). It provides managed services on top of these platforms, direct connections to Azure and AWS and a cloud spend management tool.
• Singtel has experience in the government sector, operating a community cloud for the Singapore government. It has acquired strong security experience from the project, and has enhanced its capabilities with the acquisition of Trustwave, a U.S. managed security provider.

Cautions

• Singtel is adopting a multicloud strategy, with plans to develop hybrid cloud capabilities, including support for third-party cloud services from hyperscale providers. Its own platforms may wane over time if customers opt for third-party cloud services.
• Singtel has yet to introduce hybrid cloud or unified service management capabilities because its hybrid cloud strategy is relatively new. In the short term, it will use the management consoles and native toolsets of partner providers to provide managed services for customers.

Telstra

Telstra is the leading CSP in Australia. It is expanding its international presence, targeting MNCs. It offers multitenant and single-tenant services. Telstra operates cloud data centers in Australia, Singapore and Hong Kong, which are connected to its data centers in the U.K. and the U.S. to form an international cloud platform.

Strengths

• Telstra has a strong presence in Australia, and can also support MNCs with regional requirements through its cloud data centers in Singapore and Hong Kong. It provides end-to-end service management, with SLAs for cloud platform, network infrastructure and applications.
• Telstra focuses on providing a great customer experience, with a high-touch service, a user-friendly cloud customer portal and a globally consistent product. It has shown the ability to win MNC customers, despite its relatively new international presence.
• Telstra now supports third-party cloud services, widening the choice of platforms for enterprises. The platforms include Cisco Intercloud, VMware's vCloud Air, and IBM SoftLayer. It provides managed services on top of these platforms.

Cautions

• Telstra's portfolio of managed services is relatively small, covering key services such as security, backup and disaster recovery, and OS management. For Web servers and databases, its options are limited.
• Telstra is adopting a multicloud strategy, with plans to develop hybrid cloud capabilities, including support for third-party cloud services. Its own platform may wane over time if customers opt for third-party cloud services.
• Telstra's cloud portal currently has limited functionalities for the management of hybrid clouds because the strategy is new. It plans to introduce unified service management for partner services, with common features such as single sign-on, ordering, provisioning, reporting and billing.

Verizon

Verizon is a global CSP with an established managed hosting business in the U.S. Its target market is MNCs. It offers multitenant and single-tenant services. Its cloud data centers in Hong Kong, Australia and Singapore are connected to its data centers in the U.S. and Europe to form a global cloud platform.

Strengths

• Verizon has introduced its new Verizon Cloud platform, which provides a choice of Xen and VMware hypervisors, and is built on commodity hardware for price competitiveness. It has introduced a cloud abstraction layer for integrating and managing its multiple cloud platforms, although more work needs to be done to meet user expectations.
• Verizon is becoming more customer-oriented in its offerings. Its managed services are organized into different tiers of service to make it simpler for enterprises to select its services. Its range of infrastructure and managed services is also consistent across its different cloud platforms.
• Verizon is strong in security, a key differentiator for supporting large and complex cloud migration projects. It continues to boost its security capabilities, including acquiring more security certifications and introducing more managed security services.

Cautions

• Verizon has limited professional services and expertise in enterprise applications, which limits its ability to compete for large or complex migrations involving traditional workloads, an important segment of the market.
• Verizon plans to retire its Enterprise Cloud Managed Edition, which was the only platform available in Asia/Pacific before the launch of Verizon Cloud. Customers should make plans to migrate to the new platform.
• Verizon's customer base is small, even though the base is growing at a healthy pace with its increased focus on the product in the region. It has also been deploying customized private clouds for select clients, which is not in line with its standardized approach.

Vendors Added and Dropped

We review and adjust our inclusion criteria for Magic Quadrants as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant may change over time. A vendor's appearance in a Magic Quadrant one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. It may be a reflection of a change in the market and, therefore, changed evaluation criteria, or of a change of focus by that vendor.

Added

Since 1 November 2015, HP has separated into two independent, publicly traded companies, HP and Hewlett Packard Enterprise (HPE).

Dropped

None.

To be included in this Magic Quadrant, providers had to meet the following criteria:

• Products and services. The provider must offer a CEMH service that meets Gartner's market definition. It must offer this service as a multitenant offering in its own data center, and may offer a single-tenant option.
• Technical and business capabilities in Asia/Pacific. The provider must operate a CESI platform in at least one major market in Asia/Pacific, with associated technical support, managed and professional services, and sales capabilities in the country.
• Market traction and momentum. Because the market is evolving rapidly and has many players, we include only a select number of early market movers, innovative providers and potential market makers for this Magic Quadrant. To be included, a provider needs to be a key player in a major market, supported by CESI and associated capabilities in the region.

The provider must sell CEMH as a stand-alone service, with no requirements to bundle it with application development, application maintenance or other IT outsourcing and/or DCO services.

The provider's qualifying offerings must offer customers direct or mediated self-service for OS instance provisioning on a CESI platform, with usage-based billing and resource-metering increments of no greater than one month, as well as OS management services that are coterminous with the underlying compute resources.

The services evaluated must be enterprise-class, offer 24/7 customer support (including phone support) and have infrastructure availability SLAs.

Products and Services Excluded From This Evaluation

This Magic Quadrant is for cloud-enabled managed hosting only. Therefore, the following adjacent services are excluded from evaluation:

• Colocation: Although many CEMH providers also offer colocation, the quality of colocation offerings is not evaluated in this Magic Quadrant. This Magic Quadrant should not be used to select colocation vendors.
• Self-managed cloud IaaS: Many businesses want a self-provisioned, self-managed dynamically provisioned infrastructure; they want to take advantage of the cost-efficiencies of a provider's scale and automation tools, but do not want to relinquish control. If your interest is primarily in self-managed cloud infrastructure, consult "Magic Quadrant for Cloud Infrastructure as a Service, Worldwide."
• Traditional managed hosting: Although the managed hosting market is established, this Magic Quadrant focuses on providers that have evolved to offer customers more cloud-like consumption options, including on the managed service tier. Many providers in this Magic Quadrant may still offer traditional managed hosting services, but this analysis does not consider those legacy offerings in this analysis.
• DCO and remote infrastructure management (RIM): Although many DCO providers may manage the infrastructure for Web applications as part of a DCO contract, this Magic Quadrant evaluates only managed hosting that is sold as a stand-alone service within provider-owned data center facilities. It explicitly excludes hosting that may be part of a more general DCO or RIM contract. DCO providers are covered by "Magic Quadrant for Data Center Outsourcing and Infrastructure Utility Services, North America," "Magic Quadrant for Data Center Outsourcing and Infrastructure Utility Services, Europe" and "Magic Quadrant for Data Center Outsourcing and Infrastructure Utility Services, Asia/Pacific."
• Application management services: While some managed hosting providers may have some expertise in understanding how best to run the infrastructure underlying specific applications, we consider that managed hosting services stop below the application layer. Application layer services are part of the application management market (see "Magic Quadrant for Oracle Application Management Service Providers, Worldwide" and "Magic Quadrant for SAP Application Management Service Providers, Worldwide").
• Cloud management platforms: Cloud-building hardware and software — software such as BMC's Cloud Lifecycle Management, Citrix's CloudPlatform and OpenStack, and turnkey solutions such as HP's CloudSystem Matrix — are not evaluated in this Magic Quadrant, which is restricted solely to services. Instead, see "Cloud Management Platform Vendor Landscape."

Ability to Execute

This Magic Quadrant is aimed at businesses operating in Asia/Pacific, including MNCs with regional hosting requirements and Asia/Pacific businesses with domestic hosting requirements. Because Asia/Pacific is a large region with 13 major markets, providers need to demonstrate that they can address multiple markets within the region with the support of a competitive cloud platform, as well as associated managed and professional capabilities.

We gave high weightings to two criteria: Market Responsiveness/Record, which includes a provider's history and ability to respond to market needs and opportunities in the region; and Product or Service, which includes a provider's cloud platform, range of services, managed and professional services, and service availability in all key markets.

Source: Gartner (November 2015)

Completeness of Vision

This Magic Quadrant is aimed at businesses operating in Asia/Pacific, including MNCs with regional hosting requirements and Asia/Pacific businesses with domestic hosting requirements. Due to the region's large size and fragmented geography, providers need a strong Market Understanding of their target segments, as this will determine their Geographic Strategy, supported by a competitive Offering (Product) Strategy. We gave high weightings to these three criteria.

Ideally, a leading provider should provide services in all 13 major markets within Asia/Pacific. However, we recognized that this is not yet feasible due to the tremendous amount of resources required to address all these markets at a local level. As a result, we looked for providers that can support multiple markets today, and have the potential to become fuller regional providers in the future.

Source: Gartner (November 2015)

Quadrant Descriptions

Leaders

Providers require a strong strategy to become a Leader in Asia/Pacific. They need to invest in their products, geographic coverage and delivery capabilities to the extent that they can become strong regional players. To build their market positions, they must have the ability and willingness to invest for the future.

Challengers

Challengers typically have a strong Ability to Execute, but trail the market in terms of geographic coverage or product evolution. They have experience in traditional managed hosting services, but they have not exploited technology and market demand to build highly competitive CEMH services. They could become Leaders if they extend their vision and strategy, but they could also fall quickly behind in this fast-moving market if they focus only on the short term.

Visionaries

Visionaries are typically early movers with an innovative or disruptive approach to the market; however, they have limited geographic coverage or services that are new and unproven. They may become Challengers or Leaders if they can execute strongly on their vision and the market accepts their services.

Niche Players

Niche Players typically perform well in a particular segment of the market, but have limited ability to outperform other providers in the region as a whole. Their focus on a particular segment or geography limits their ability to address the broader market. They tend to be relatively unknown outside their target market.

An increasing number of enterprises in the Asia/Pacific are migrating to CEMH, drawing in a wide range of providers, including managed hosting providers, IT service providers and CSPs.

Service providers are gearing up to be strong regional players. However, they are still at an early stage of development and many have gaps in their capabilities, which can range from quality of cloud platform to managed services capabilities to geographic coverage.

This Magic Quadrant focuses on CEMH services for businesses in Asia/Pacific. These are standardized products that combine a CESI with managed services. This Magic Quadrant focuses on services for Asian enterprises and Western MNCs operating in Asia.

The aim of this Magic Quadrant is to help enterprises sourcing for CEMH services by establishing which providers are best placed to serve the needs of Asia/Pacific's broad market. Ideally, a provider should offer services in all the major markets, but we recognized that this is not yet feasible due to the tremendous amount of resources required to address all these markets at a local level. As a result, we looked for providers that can support multiple markets today, and have the potential to become fuller regional providers in the future.

We evaluated a select number of providers that focus on the region's developed markets, particularly the key regional hubs such as Singapore, Hong Kong, Australia, and Japan.

We also included providers from India, as this country serves as the IT back-end for many MNCs. We also looked at providers in China, as there is a growing need for MNCs to host in this country as business expands there. However, China's service provider market is immature. As a result, we did not include any provider from China in this Magic Quadrant.

We gave higher weightings to providers that:

• Serve multiple country markets in Asia/Pacific, including regional hubs such as Singapore, Hong Kong, Australia and Japan, to meet the requirements of MNCs.
• Offer a CEMH service that is competitive in terms of range of services, cloud platform, service features, managed and professional services, and local service and support.
• Experience and track record supporting enterprises in Asia/Pacific, with ability to win MNCs with regional requirements and Asian enterprises with domestic hosting needs only.

An increasing number of enterprises are adopting CEMHs, due to easier availability of services. Adoption is led by developed markets such as Japan, Australia, Singapore and Hong Kong, but it is also emerging in developing markets, particularly in India where there is a choice of strong local providers. Initial adoption is led by midmarket companies, but it is now extending to enterprises and government organizations as well.

There is a wide range of players, including cloud and managed hosting providers (mostly from the U.S.), IT services providers, and global and regional CSPs. Their capabilities differ significantly.

• Cloud and managed hosting providers have more-mature cloud platforms, lead in technical innovation and have better managed service capabilities, but they tend to lack strong regional presence.
• IT services providers have more managed hosting experience, typically as part of larger IT services or DCO deals, and deep presence in some country markets.
• CSPs lead in network and hosting services, typically offering end-to-end service management, including network, cloud infrastructure and application performance.

All of the providers are still in the early stage of execution in terms of cloud platform development, geographic coverage and experience supporting enterprises. Consequently, their track records for success are patchy and revenues small.

Nevertheless, most continue to invest in the service and are making progress, albeit at different speeds. In the past year, they have been:

• Building up cloud advisory services, especially for cloud migration and transformation
• Developing expertise in key enterprise applications, in particular SAP, Oracle and Microsoft
• Introducing more software as a service, including disaster recovery, database, SharePoint and Exchange

An increasing number of providers are now focused on hybrid clouds as their new strategy. They are beginning to extend support to hyperscale cloud providers, such as AWS and Microsoft Azure. However, their hybrid cloud management capabilities differ significantly, and are generally basic and unproven.

We believe the market will continue to evolve greatly over the next few years. Enterprises should select the provider that matches their needs in the near term and keep to shorter contracts. This will give enterprises the opportunity to select another provider as the market matures.