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Cloud-Native Apps and Developers Drive Digital Growth

Server virtualization was one of the key steps toward further IT infrastructure abstraction. Every enterprise CIO and CTO knows that managing a server farm is problematic. That's why the quest for container and serverless platforms is driving more organizations to reassess their data center.

Cloud container management revenue will grow from a small base of $465.8 million in 2020, to reach $944 million in 2024, according to the latest worldwide market study by Gartner.

Among the various sub-segments, public cloud container orchestration and serverless container offerings will experience the most significant growth. Here are the study findings.

Container Management Market Development

Container management provides software and related services that support the ongoing operation of containers, at scale, in production environments. But production applications are uncommon.

"There has been considerable hype and a high level of interest in container technology, but a lower level of production deployments to date," said Michael Warrilow, research vice president at Gartner.

Containers are useful because they provide a tool for addressing several critical concerns of software application developers -- including the need for faster delivery, agility, portability, modernization and life cycle management.

Gartner predicts that by 2022, more than 75 percent of global organizations will be running containerized software applications in production -- that's up from less than 30 percent today.

"Understanding of ‘cloud-native’ varies, but it has significant potential benefits over traditional, monolithic application design, such as scalability, elasticity and agility," said Mr. Warrilow. "It's also strongly associated with the use of containers."

That said, several factors will restrict container adoption among organizations developing or modernizing custom applications. Despite the need to support digital transformation, initiatives will be curbed by recessed economic conditions for at least the medium term, as organizational priorities shift to cost optimization.

Gartner expects that up to 15 percent of enterprise applications will run in a container environment by 2024 -- that's up from less than 5 percent in 2020, hampered by application backlog, technical debt and IT budget constraints.

According to the Gartner assessment, the enterprise deployment bottleneck will be the speed at which software applications can be refactored and/or replaced. Using containers for mainframe modernization projects is a good example.

Direct revenue for container management software and services will remain a small portion of the container ecosystem. Additional revenue will come from a range of adjacent segments that are not included in Gartner’s container management forecast.

These additional revenue opportunities include software application development, managed services, on-premises hardware and infrastructure as a service (IaaS) among other segments.

Outlook for Container Management Adoption Growth

For example, the IaaS revenue associated with container management is expected to reach $1 billion before 2023. Many of the adjacent segments are already reported in existing Gartner forecasts.

"Although the direct incremental revenue may be less than many expect, containers may have a different role to play," said Mr. Warrilow. "Containers could ultimately fuel an open ecosystem similar to Linux."

So far, no single IT vendor has a differentiated solution. The marketplace is somewhat saturated by a lack of meaningful and substantive innovation. To stand out from the crowd of me-too players, it's going to require some imaginative go-to-market strategy that creates a compelling movement.

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