Cloud DaaS Managed Service Fuels NewSQL Market

As public clouds are commoditized, the public cloud vendors are increasingly moving to higher margin and stickier managed services. In the early days of the public cloud, renting compute and storage was unique, exciting, sticky and profitable. It has quickly become a commodity. In order to provide differentiation, maintain margins and create barriers to customer exit, against increasing competition, the cloud is moving toward a collection of managed services.

Public clouds are growing beyond simple compute instances to platform as a service (PaaS). PaaS is then comprised of various modules, including database as a service (DaaS). In the early days you rented a number of compute instances, loaded your database software and you were the DBA managing all aspects of that database. Increasingly, public clouds are moving toward a DaaS model, where the cloud customer writes to a simple database API and the cloud provider is the DBA.

If the database resides in a single server and does not require high-availability, providing that as a managed service is no problem. Of course, if this is the use case, then it is no problem for the customer to manage their own database. In other words, there is little value to a managed service.

The real value-add for the customer, and hence the real price premium, is derived by offering things like auto-scaling across multiple servers, hot backup, high-availability, etc. If the public cloud provider can offer a SQL-based DaaS, where the customer writes to a simple API and everything else is handled for them, that is a tremendous value and customers will pay a premium for it.

While this sounds simple, public cloud companies soon learn that the Devil is in the details. Managing someone else’s database, without insight into their business processes, performance demands, scaling demands, evolving application requirements, and more, is extremely challenging and demands a new class of DBMS. These demands have created a market need that is now being filled by companies using the moniker “NewSQL”.

In short, when it comes to DaaS, public cloud vendors want the following:

• Simple “write to our API and we’ll handle the messy stuff like scaling, HA, etc.”

• Premium value that translates to a higher profit margin business

• Barriers to customer exit

Future posts will delve into the operational demands of DaaS, and how these demands a driving NewSQL DBMS architectures and features.