industry spotlight
Infrastructure-as-a-service
Discover the IaaS industry, where scalable infrastructure meets cutting-edge technology.
Powering the future with scalable solutions
The IaaS industry is on the rise, with no signs of slowing down. Remote work has gone mainstream, with many companies finding this way more productive and cost-effective. As more employees are expected to work remotely full-time, the demand for IaaS to support these distributed teams keeps growing. And so does the adoption of IaaS solutions, given the need to update aging infrastructure. This surge in customer demand is catching the eye of investors, who are eager to jump on innovative IaaS opportunities.
Why it matters:
Investor interest and significant market growth potential make the IaaS industry ripe for opportunities. As an IaaS startup, consider capitalizing on:
- Remote work solutions
- AI and ML integration
- Edge computing
- Hybrid and multi-cloud solutions
Between the lines:
Be aware of possible obstacles like competition, security breaches, and fundraising.
Our expert team is equipped with the knowledge needed to develop successful, investment-worthy ventures in the IaaS sector
What we do:
We help secure the necessary funding, assist with M&A options, and craft impeccable pitch decks and business plans.
Go deeper:
Explore our analysis of the infrastructure as a service market to learn about the latest trends, startup challenges, and key strategies for securing investment.
5x growth
The infrastructure as a service market is expected to grow fivefold by 2032.
92%
Individuals use containerized applications.
9/10
Companies utilize public cloud services.
68%
Companies will adopt a cloud-first strategy by 2025.
6/10
Workers globally freelance.
IaaS industry trends in 2024
Top IaaS industry trends to consider in 2024:
Edge computing and IoT integration: enables processing data near to its source for faster response times and better data management.
Hybrid and multi-cloud strategies: optimizing IT environments.
Enhanced security and compliance: including robust encryption, identity and access management, and continuous data monitoring.
Serverless computing: building and deploying applications without managing the underlying infrastructure.
Why it matters: tracking industry trends allows for a better understanding of the infrastructure as a service market, more informed decisions, staying competitive, and effective innovation.
VENTURE LANDSCAPE
In 2023, IaaS startups secured $63M in venture funds
With major deals covered in:
- Cloud storage solutions
- Compute and virtualization services
- Networking and content delivery
- Data management and analytics
IaaS startup challenges
As with any sector, breaking into infrastructure as a service has its pros and cons. To succeed in this area, you must overcome the following obstacles.
Securing VC funds:
As a capital-intensive and highly competitive market, IaaS makes many VCs hesitate to open their pockets wide for startups.
Why it matters
Insufficient funding leads to:
- Slower growth
- Inability to scale
- Weak competitive moat
What it takes:
- Develop a compelling business plan with market opportunity, competitive advantages, and potential for growth
- Provide evidence of market potential and traction
- Present realistic and detailed financial projections
- Craft an investor-appealing pitch deck
Intense competition:
The infrastructure as a service market is dominated by giants like Amazon Web Services, Microsoft Azure, and Google Cloud. So, it’s no wonder that new entrants find it difficult to gain a market share.
Why it matters
Intense competition can lead to:
- Price wars
- Reduced profit margins
- Problems with customer acquisition and retention
What it takes:
- Target niche markets where competition is not so intense
- Develop unique features or services that differentiate your IaaS solution from competitors (think about enhanced security or better customer support)
- Build strong customer relationships through excellent service, personalized solutions, and reliable support
Constant tech innovation:
As an IaaS startup, you need to constantly innovate and maintain a high level of technical expertise. Otherwise, you won’t be able to manage complex infrastructure and offer cutting-edge solutions.
Why it matters:
Lack of technical expertise results in:
- Service outages
- Security vulnerabilities
- Damaged reputation and customer trust
What it takes:
- Hire skilled professionals with expertise in cloud computing, cybersecurity, and data management
- Ensure continuous learning and professional development for the technical team
- Track industry trends and invest in R&D
Data security:
As infrastructure as a service providers handle sensitive customer data, they must ensure robust security measures and compliance with regulatory standards.
Why it matters:
Data breaches or non-compliance with regulations can lead to:
- Legal penalties
- Loss of customer trust
- Damaged reputation
What it takes:
- Implement advanced security protocols, such as encryption, multi-factor authentication, and continuous monitoring, to protect data
- Establish compliance programs such as GDPR, HIPAA, or SOC 2 to comply with industry standards and regulations effectively
- Perform regular security checks and vulnerability assessments to identify and address potential risks
FAQs
What is the difference between infrastructure as a service vs platform as a service?
IaaS provides virtual servers, storage, and networking. PaaS offers all the previous services, with development tools and software to build and run applications. In short, IaaS is about infrastructure, while PaaS is about application development.
What are some common infrastructure as a service examples?
Some common infrastructure as a service examples include Google Cloud Platform, Microsoft Azure, Amazon Web Services, and IBM Cloud.
How attractive is the industry to potential IaaS investors?
The IaaS industry attracts investors due to its fast growth, high demand for cloud services, and strong market potential.
If you are an IaaS startup, how easy is it to raise funding today?
Raising funding for an IaaS startup is achievable due to the industry’s growth and strong investor interest.
How long does it take to create a pitch deck and financial model for an IaaS startup?
Our team usually needs two or three weeks to complete all the documentation. However, sometimes, owing to a hectic schedule and project complexity, we may need more time, but not more than a month. For more details, contact us directly.
What are the key mistakes IaaS startups make in their pitch decks?
Most decks don’t tell a story. A comprehensive investment narrative matters a lot for startup decks as they pitch to VCs and angels who are more likely to cut big checks if they believe in founders. A failure to showcase traction, establish a clear market position, and build a solid competitive advantage, coupled with poor design, may avert investors from your project.
How competitive is the infrastructure as a service market?
The IaaS market is highly competitive, with major players like Amazon Web Services, Microsoft Azure, and Google Cloud dominating the space. Numerous newcomers are also trying to carve out their market share.
What services do you provide for investors looking to invest or already investing in IaaS?
We help investors evaluate IaaS investment opportunities by conducting in-depth research and presenting valuable insights in a visually appealing format. We also provide comprehensive fundraising services to the portfolio companies of our partner funds.
Do you provide IaaS M&A support?
Of course! Our team supports IaaS M&A, identifying opportunities, assessing their potential, and ensuring successful partnerships post-deal.
Do you make intros to IaaS VCs?
We connect you with relevant IaaS VCs, evaluating the funding round size, team, and product, and support your collaboration with investors from start to long-term partnerships.
Do you have available data or research to purchase on the IaaS market?
Our experts deliver insights on the infrastructure as a service market, including industry analysis, competition assessments, and market overviews. Utilizing trusted data, we help you identify opportunities, challenges, and investment trends in IaaS.
Which growth stage of companies have you worked with in the past?
Our core proficiency lies in helping startups from the Seed to Series B growth stages within the IaaS industry and beyond. However, we also support businesses in Pre-Seed and Series C+ growth stages and forge ties with established companies and investment funds.
Leverage Waveup’s unmatched expertise in fundraising, M&A advisory, and growth hacking to take your project to the next level. Share your email, and let's discuss how we can help!