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Cloud Computing: What is in Store?

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Frost & Sullivan analysis of the cloud comuting market in Asia Pacific

Frost & Sullivan analysis of the cloud comuting market in Asia Pacific

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  • 1. Cloud Computing: What is in Store ? Seoul 22nd February, 2011
  • 2. Agenda 1 A Closer Look at Current Adoption Trends 2 Initiatives & Case Study 3 Outlook 2
  • 3. Our definition of Cloud Computing? A pool of compute, memory and i/o resources, applications or operating environments with seemingly infinite scalability, delivered as a service over a network, be it private or public. Characteristics Service Types Deployment Models On Demand, Self- PUBLIC Service Public Software as a Service Enterprise Cloud software delivered through the public or private network Pay As You Use, PRIVATE Metered Consumption Private Enterprise Cloud Platform as a Service Rapid Elasticity, Development platform as a COMMUNITY Scale Up/Down service Enterprise Enterprise 1 2 Community Shared Pools, Cloud Illusion of Infinite Enterprise Resources Infrastructure as a 3 Service HYBRID Broad Network Compute, storage as a service Private Public Access using Enterprise Cloud Cloud Standard Internet Protocols 3
  • 4. Almost one-fourth of enterprises in APAC have started usingCloud Computing Adoption level and type of cloud Amongst cloud users, 91% use SaaS, 69% IaaS, 47% PaaS. 1/3rd of cloud users currently use all three. Points to a decreased time to adoption amongst existing users 10% 7% 77% 23% 6% Not adopted yet Public cloud Private cloud Hybrid cloud N = 330 Source: Frost & Sullivan 4
  • 5. CRM and HRM applications witness the highest adoption Applications / Infrastructure that have been put in the Cloud ERP + CRM + HRM 17% Server computing 9% Custom Application 9% Analytics & Reporting 9% Storage 8% Security 7% Desktop 7% Collaboration tools 7% Office productivity 6% Others 1% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% N = 330 Source: Frost & Sullivan 5
  • 6. IT & Telecom and Professional Services emerge as leadingadopters Vertical-wise Adoption levels Financial 84% 6% 2% 8% Services Government 79% 2% 12% 7% Manufacturing 82% 4% 6% 8% IT & Telecom 63% 13% 10% 14% Professional 68% 16% 5% 11% Services Others 76% 2% 6% 16% Non-adopters Public cloud Private cloud Hybrid cloud N = 55 / Vertical Source: Frost & Sullivan 6
  • 7. Increasing adoption has created a US$1.1 billion CloudComputing market in APAC ex Japan Cloud Computing Market Size, 2010 100% = US$1.1 billion 9% 1% 90% SaaS IaaS PaaS Source: Frost & Sullivan With a 90% share of the market, SaaS is the dominant segment of the Cloud market in the Asia Pacific region. 7
  • 8. APAC SaaS market expected to grow at 39% for the 2010-2014 period APAC SaaS Market Forecast, 2010-2014 4,000 3,813 3,500 857 3,000 2,826 2,500 675 2,022 2,000 490 1,500 1,438 2,956 1,028 357 1,000 2,151 258 1,532 500 1,081 770 0 2010 2011 2012 2013 2014 BAaaS Security & UC Source: Frost & Sullivan The Business Applications as a Service (BAaaS) segment witnessing significant traction, expected to remain a focus area for major market participants. 8
  • 9. Australia and China account for half of the APAC BAaaSmarket Country-wise Breakdown of the BAaaS Market, 2010 100% = US$770 million Philippines Indonesia Malaysia 2% Thailand 2% 2% 2% Vietnam New Zealand Taiwan 0% 5% 3% Australia Hong Kong 35% 5% Singapore 7% South Korea 10% India China 11% 16% Source: Frost & Sullivan 9
  • 10. Agenda 1 A Closer Look at Current Adoption Trends 2 Initiatives and Case Study 3 Outlook 10
  • 11. Governments are looking to drive greater adoption of CloudServices Three-pronged Approach – Create Internal Demand, Generate Supply and Promote nation-wide adoption Reduce public sector ICT spending and improve efficiency Drive greater Promote adoption by Three- Three- entry of local local pronged and foreign businesses Approach players Source: Frost & Sullivan 11
  • 12. Many governments in APAC are promoting Cloud Japan to Tap Government Potential through the Kasumigaseki Cloud • The Kasumigaseki Cloud aims to establish a shared pool of resources to meet the increasing requirements of government’s IT systems and bring in greater efficiencies. • A new National Digital Archive will also be developed to digitize government and other popular information, and introduce standardized formats. Korean Government Investing in Cloud to Drive ICT Industry Competitiveness • Communication Commission has allocated about US$500 million for the development of Korean Cloud Computing facilities. • KCC, Ministry of Knowledge Economy and the Ministry of Public Administration and Security collaborating to create Cloud-based IT infrastructure. • The initiative is expected to boost Cloud Computing services in the Korean market to promote local players to enter the market. • This is aimed to fulfill towards garnering a 10% of the global Cloud Computing market as well as a reduction of 50% in public sector’s ICT spending by 2014. 12
  • 13. UniSIM expects a to lower storage costs by a factor of 20 bymoving into the Cloud • UniSim decided to move its Archival data into the Cloud. • The decision is estimated to reduce storage costs to US$7,200, 20 times lower than US$146,400 for managing it on its own. Cost Self Procurement Cloud-based Remarks Components (US$) (US$) Hardware 12,000 - Purchase of two servers + operating system + maintenance Software 70,000 - Purchase of software Storage 14,000 - Storage & maintenance fee Co-location & 7,200 - For two servers Power Technical 43,200 - Manpower support IaaS - 7,200 Storage + Shared bandwidth (Storage) Total 146,400 7,200 Savings of $139,200 Source: National Grid Office + UniSIM + PTC System 13
  • 14. Agenda 1 A Closer Look at Current Adoption Trends 2 Government Initiatives to Promote Cloud Computing 3 Outlook 14
  • 15. #1: Huge pressure expected on Existing Channel StructureThe shift from Product to Services has exerted tremendous pressure onexisting GTM strategies and channel models creating more conflict Vendor Vendor Master Direct Distributor Distributor Distributor Web Distributor Reseller Reseller Reseller Key Reseller Reseller Accounts Other Accounts I. Aggressive Channel Structure Customer Vendor II. 3-Tier Structure Distributor Vendor Reseller Reseller Reseller Customer Customer III. 2-Tier Structure IV. 1-Tier Structure 15
  • 16. #2: Cloud will significantly disrupt the current ICT landscape(1) • Financial and competitive pressure to grow services business Vendors • Existing business models and GTM un-geared for “services” play • Lucrative maintenance revenues will dry up in the future • Vertical understanding and “Customization” are clear differentiation Outsourcers/GSI • As basic IT services turn commoditized, SI revenues will dry up • Need to give up lucrative existing contracts to retain customers • As IT becomes commoditized and simple, SI revenues will start drying up Resellers • Procurement rationalization toward fewer providers • Massive consolidation ahead • Pressure to move up the value chain as product margins reduce Distributors • Services play critical for survival • Conflict ahead with Vendors • Need to capitalize on the advantages of billing, relationship and infrastructure Service • Lack of nimbleness and “IT” branding are inhibiting early growth Providers • Sought after channel partner in the short-term for pure-play cloud providers 16
  • 17. #2: Cloud will significantly disrupt the current ICT landscape(2) • Business skills such as project, relationship management will take front-seat It is all about Business • Cloud will run on Commoditized, open source platforms with stringent SLA’s • IT automation will render several “dull” IT jobs obsolete • Skills in demand will include technical architects, vendor IT departments will shrink relationship managers, risk management professionals SMB’s will have access to • SMB’s have an unique ability to scale quickly and obtain access to enterprise class infrastructure Enterprise class ICT • Advent of start-ups that live in the “Cloud” with no resources infrastructure Conglomerates will • MNC’s and Conglomerates will offer “IT as a Service” both internally potentially to external customers as well become “Service • Drastic improvements in efficiency, effectiveness and providers” measurability of IT • “ Browser” is the software and “Internet” is the network • Ubiquitous access from any device, anytime, anywhere, any Browser is the software network 17
  • 18. #3: Significant efforts will be devoted to Standards, Securityand SLA’sThese are three critical areas where we expect considerable industryefforts in the future Standards Development Use cases Reference implementations Publishing of test results Risk Management Frameworks Adequate security controls Vendor assessment standards Stringent privacy laws on data integrity Third-party audits and review Improvement of SLA’s More heterogeneity in SLA’s SLA’s with clear response time Financial liability Robust privacy standards 18
  • 19. #4: PaaS will emerge as key battleground • Explosive growth ahead • Low barriers to entry SaaS • SaaS vendors need to move beyond “pure SaaS” to “PaaS” • Lock-in model • The key battleground in the future of cloud • PaaS market participants are expected to venture PaaS aggressively into the SaaS, IaaS turf • Openness and integration with other platforms , mobile devices crucial • A segment headed for rapid commoditization • Robust service delivery platforms and flexi-pricing IaaS models crucial • SaaS is a path of natural progression Source: Frost & Sullivan 19
  • 20. #5: While SaaS will continue to thrive BAaaS Market: Revenue Forecasts (South Korea), 2009-2017 600.0 60.0% 500.0 50.0% Revenue Growth Rate (% ) Revenue ($ Million) 400.0 40.0% 300.0 30.0% 200.0 20.0% 100.0 10.0% 0.0 0.0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 CRM ERP SCM HRM BI Others Growth rateNote: Compound Annual Growth Rate (2010-2017): 32.8% Note: All figures are rounded; the base year is 2010. Source: Frost & SullivanOthers includes solutions such as Office Automation, eBusiness, Accounting and Vertical Specificsolutions. 20
  • 21. Important Ingredients to build a robust Cloud Framework Web App Stringent SLA Frameworks Service delivery Security & Privacy platform Cloud Computing Virtualization SOA Broadband Commoditized Browser as a Open Source Hardware Platform Source: Frost & Sullivan 21
  • 22. Global Growth Partnership Company 22
  • 23. Follow Frost & Sullivan on Facebook, LinkedIn, SlideShare, andTwitter http://www.facebook.com/FrostandSullivan http://www.linkedin.com/companies/4506 http://www.slideshare.net/FrostandSullivan http://twitter.com/frost_sullivan 23
  • 24. For Additional InformationDonna Jeremiah Mi Ok LeeCorporate Communications Corporate CommunicationsAsia Pacific Asia Pacific - Korea+603 6204 5832 +82 2 6710 2033djeremiah@frost.com Miok.lee@frost.comNitin BhatPartner Asia PacificICT+65 6890 0999nbhat@frost.com 24