Cloud provider Vultr released a new service that uses third Generation AMD EPYC processors to power virtual machines. These processors use AMD’s Zen 3 microarchitecture with a maximum frequency of 3.675GHz per core.

Alexander Wurm, a senior analyst at Nucleus Research, said demand for high-performance virtualized infrastructure has exploded as organizations have continued to shift low-latency and mission critical workloads to the cloud.

“Although not every cloud deployment needs the most performant infrastructure, Vultr better serves select customers prioritizing efficient latency-optimized processing with this new offering,” he said.

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Wurm predicts that this service could be helpful to high-tech companies to enable other ISVs, for financial companies to use for fraud detection and to support IoT and edge computing implementations in manufacturing and automotive companies.

J.J. Kardwell, CEO of Constant, the parent company of Vultr, said in a press release that this new service is an alternative to “Big Tech” clouds.

“AMD has made tremendous strides over the past few years in regard to tech innovation,” Kardwell said. “It has pushed the design, architecture, and performance of its CPUs, which has enabled us to implement even more affordable alternatives to solutions like AWS EC2.”

Sid Nag, VP of research for cloud and edge technologies, said that this is one way for a boutique cloud provider to differentiate itself from the hyperscale providers.

“However, similar solutions are also available from the hyperscalers who have both general purpose and specialized offerings,” he said. “Also, many of the hyperscalers build their own silicon instead of relying on standard silicon from AMD or another company.”

Nag said that price could be a factor in the decision to use a boutique provider instead of a hyperscaler although the economies of scale favor the large providers as well.

Vultr’s compute platform now has three services: Optimized cloud compute, cloud compute and bare metal. Optimized Cloud Compute is available in general purpose, CPU optimized, memory optimized, and storage optimized server types. All Optimized Cloud Compute instances and some High Performance Cloud Cloud instances are powered by 3rd Gen AMD EPYC CPUs.

Vultr’s AMD-powered virtual machines will be available in 19 distributed locations on four continents:

• North America: Atlanta, Dallas, Chicago, Los Angeles, Miami, New Jersey, Seattle, Silicon Valley and Toronto
• Europe: Amsterdam, Frankfurt, London, Paris, Stockholm and Warsaw
• Asia: Seoul, Singapore, Tokyo
• Australia: Sydney

Gartner predicts that enterprise IT spending on public cloud computing will surpass spending on traditional IT by 2025 in the application software, infrastructure software, business process services and system infrastructure markets. Researchers estimate that 51% of IT spending in these four categories will have shifted from traditional solutions to the public cloud by 2025, compared to 41% in 2022.

Analysts think that demand for integration capabilities, agile work processes and composable architecture will drive this shift.

Gartner recommends technology and services providers target segments where the shift is occurring most aggressively, such as infrastructure-related segments that currently have a lower level of cloud penetration and may grow faster than segments such as enterprise applications that have already shifted to cloud services.

This research on cloud shift measures the ratio of enterprise IT spending on public cloud services compared with traditional for a certain set of market segments. It compares only those markets where cloud is a meaningful trend and excludes consumer spending and markets that cannot transition to cloud.