IIJ GIO To Boost European Cloud Spending

Internet Initiative Japan (IIJ) has introduced its enterprise-gra de cloud computing solution in Europe. The service leverages the company's investment in data centre and high-capacity backbone infrastructure connecting Europe with the US and Japan. It follows the launch of IIJ cloud services in China, highlighting the company's ambitions to reduce its dependence on its core domestic market. IIJ aims to achieve cloud-related revenue of JPY10bn in the current financial year, a goal it seems likely to reach given fast-growing demand for private cloud services in Europe.

IIJ Europe (formerly IIJ Exlayer, a company that was consolidated in June 2012) will provide the new IIJ GIO EU service to businesses across Europe, although BMI believes it will likely concentrate on larger cloud-dependant EU markets such as the UK, France, Germany, Spain and Italy in the start-up phase.

Enterprise Key To Cloud Market Growth
IIJ GIO Domestic Revenue (JPYbn)

Clients will be able to select the type of server (virtual or physical), CPU performance and memory size, operating system, and other features, making the service highly adaptable and scalable. As a major Internet backbone provider, IIJ includes network costs in the same monthly fee so that, if clients experience sudden spikes in traffic, there are no extra charges to be passed on. This approach differs from the majority of cloud providers in Europe, which use traffic-based fees and thus can lead to variable charges over time.

IIJ has been offering cloud services under the GIO brand to Japanese businesses for several years and generated turnover of JPY6.2bn from its Japanese offering in the financial year ended March 2013, doubling the JPY3.1bn recorded in FY 2011 and increasing by a factor of 10 from the JPY0.6bn earned in FY2010. The number of registered users in Japan climbed from 700 to 1,000 in the year to March 2013, helping monthly revenues grow to JPY0.7bn from JPY0.4bn a year earlier.

Although large businesses account for the majority of IIJ's cloud revenues, a growing number of social networking service (SNS) game providers are using the GIO serv ice to host their products. A round 33% of FY12 revenues were generated by such clients. BMI expects Europe's growing social networking services sector to find IIJ's flat-rate, scalable, high service level offering very appealing . Consequently, we expect IIJ to record rapid growth in cloud-related revenues over the next five years. This will filter through to our forecasts for spending on cloud services in the region.

Over the 2013-2017 period, BMI projects cloud service spending in the UK, Germany and France to grow by 135.6%, 110.4% and 146.3%, respectively, to reach total values of US$11.61bn, US$8.02bn and US$7.04bn, respectively.

This article is tagged to:
Geography: Europe, China, Germany, Spain, France, United Kingdom, Italy, Japan, United States

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