Cloud technology has played a vital role in changing the way various companies use and consume information technology. It is one of the important offerings that has created an industry wide shift to the third platform technology viz. social, mobile, and big data. Cloud computing continues to drive the innovation and growth across all the IT industries.

A recent research conducted by IDC predicts that the global IT expenditure on public cloud hosting is forecasted to reach nearly $107 billion by the year 2017. Moreover, the cloud services will expand at a compounded annual growth rate of about 23.5% between the years 2013 and 2017. This is five times the growth of IT sector as a whole.

One of the key factors driving this growth is the increasing number of cloud deployment models. This has clearly accelerated the adoption of cloud hosting worldwide. The momentum was further shifted from dedicated private cloud offering to shared public cloud offering with the emergence of VPC or virtual private cloud. VPC combines the attributes of both public and private clouds and are effective in addressing various constraints that have demotivated the customers from adopting cloud models. In the same way, growing competition and commoditization is forecasted to increase the level of IT expenditure on cloud-based IaaS offering.

Infrastructure-as-a-Service provides scalability and elasticity to the organizations. It enables businesses to benefit from the faster time-to-market. This not only gives them an edge over the competitors, but also improves their sales and revenue. Another important reason why the service is recently gaining traction is that it allows firms to quickly scale-up or down according to its changing business requirements. The service providers typically have the most powerful and latest servers, networking technology, and storage capabilities to meet the on-demand scalability requirements of the businesses, which provide greater agility and flexibility to the businesses.  

In this light, more and more companies are integrating their IaaS platforms with their legacy systems in order to move their critical business data in a secured environment. A study by Gartner supports this argument and predicts that this trend is expected to gain more traction by 2016. The study further illustrates that the global expenditure on public cloud will be expanded at a CAGR of nearly 18% and reach $210 billion by 2016. Of this IaaS is projected to grow at the rate of approximately 41.3% by 2016. Therefore, going by the estimates, this will be the fastest growing segment of the public cloud computing.

Hence, the growing competition is increasingly shifting companies focus on cloud services. IaaS is enabling business to improve their profit margins as well as lower their operational costs. Accordingly, service providers in order to sustain in this competitive ecosystem need to scale-up/down their offerings and provide customized service to their customers.