Market research firm IDC has revealed the top 10 providers of infrastructure, platform-as-a-service (IaaS and PaaS) and storage with Canadian operations, and in alphabetical order, they are: Bell, CenturyLink, Cogeco, IBM, iWeb, Long View, RackForce, Rogers, SherWeb and Telus.
It is a separate list than IDC’s recent report which focuses solely on top providers of IaaS, but includes companies with Canadian market share that don’t necessarily have Canadian data centres, namely Amazon Web Services and Microsoft Azure.
The companies listed here are the so-called industry leaders among only 20 or so cloud providers with Canadian operations, but the distinction is still important, according to Mark Schrutt, a researcher of IT services at IDC Canada.
He added that this year would see a number of American or multinational companies set up shop in Canada.
For now, these ten clouds can be sliced in only so many ways.
Aside from Canada’s Big Three that offer IaaS and PaaS on a national level, multinationals include IBM with its data centres sprinkled throughout the country, CenturyLink in Vancouver, Toronto and Montreal, Long View in Calgary, Alberta and Toronto, iWeb in Montreal, and SherWeb in Montreal and Sherbrooke, QC.
The remaining players, namely Cogeco with data centres in Barrie, Toronto and Montreal and RackForce in Kelowna, BC, serve only the Canadian market.
The problem, Schrutt says, is that it’s hard to tell them apart.
“These companies are in a very competitive marketplace, and it’s difficult for them to differentiate themselves,” Schrutt says.
In fact, the only company he singled out for being “innovative” and “flexible” was IBM, thanks to its 2013 SoftLayer acquisition.
A May 2014 Gartner report praised the company for its strong self-service vision, global customer base, SoftLayer’s smaller “pod” architecture for easier local expansion, and flexibility in both pricing and in how its offerings can be combined. However, the report also said that IBM “has not articulated a vision for how SoftLayer itself will be differentiated, beyond the availability of bare-metal servers and future in-country presence.”
As for the rest, smaller efforts are underway.
Bell has its 100 per cent power and network availability guarantee. iWeb has OpenStack and SSD storage. Sherweb has a hosted Microsoft CRM customer relationship management tool and SSL certificate encryption. Rackforce has a cloud video editing function, VMware vRealize Automation and what the company describes as greener and more sustainable power and cooling systems.
Meanwhile, Telus has QuickStart, offering setup, migration and training for certain cloud services. CenturyLink has, according to Gartner, both cloud-native capabilities that are attractive to developers and the governance and management features needed by large enterprises. And finally, Long View says it has a holistic approach to its IT services.
But differentiation remains a challenge, according to Schrutt.
What these companies have done well as a collective is excel in areas of scale, technology, solutions, and especially the channel, Schrutt said.
“More and more profits are coming from as-a-service offerings with companies moving away from hardware and software and into services,” Schrutt told CDN. “This is where the direction of technology is heading; the direction of services. There’s tremendous upside with regards to the channel.”
He explained that in addition, he’s seen best practices that include companies filling gaps in their offering by partnering with companies like Microsoft and getting customer input and feedback.
“And the big one is not competing with Amazon,” he said. “It’s about picking your own niche and going from there.”
Bruce Stuart, president of Vancouver-based channel consultancy Channelcorp, says that in addition to doubling break-even estimates to finance growth and using raw sale analysis, Canadian companies need to focus on customers that are “afraid of the patriot act.”
This would sectors like law firms, policing, healthcare and finance that would want their data specifically on servers in Canada, away from the jurisdiction of American law enforcement.
“Why would somebody go with a Canadian provider?” said Stuart. “There’s data in that has no advantage being hosted in Canada whereas there’s other data where these guys should be pointing out to customers the value of Canadian hosting.”
His statements seem to back up IDC research, which found that despite not having local data centres, Amazon and Microsoft hold over 50 per cent of Canadian market share.
Citing the example of Nirvanix, a San Diego, Calif.-based cloud provider that in 2013 became the industry’s first major bankruptcy, Stuart also cautioned that despite emerging in the top half, these Canadian companies could be headed for a similar fate lest they differentiate.
“Find a competitive advantage that’s unique to the customer,” he said.
Stay tuned to CDN for our profile on Long View, one of the Top 10 Canadian cloud providers.