The market for cloud infrastructure-as-a-services (IaaS) is in a state of upheaval, with many service providers shifting their strategies after failing to gain enough market traction, according to a new report from Gartner Inc.

Worldwide spending on IaaS is expected to reach nearly $16.5 billion in 2015, up 33% from 2014, with a compound annual growth rate (CAGR) of 29% from 2014 to 2019, the report says.

The IaaS services market is quickly consolidating around a small number of market leaders, according to Lydia Leong, Gartner vice president and distinguished analyst.

Last year was a “year of reckoning” for many cloud IaaS providers, and many think their current strategy is failing them, Gartner says. Some providers intend to launch an entirely new cloud IaaS platform, make substantial changes to their current platform or shift from providing managed services on leading cloud IaaS platforms.

Many providers have said they intend to discontinue or significantly cut their investment in their cloud IaaS offerings, and others intend to eliminate or replace them, the report notes.

"We urge buyers to be extremely cautious when selecting providers; ask specific and detailed questions about the provider's roadmap for the service, and seek contractual commitments that do not permit the provider to modify substantially or to discontinue the offering without at least 12 months' notice," Leong said.

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