Cloud computing indonesia market what are customers looking for

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Frost & Sullivan Analysis on Indonesia's Cloud Computing Market

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Cloud computing indonesia market what are customers looking for

  1. 1. CLOUD COMPUTINGINDONESIA MARKET: WHAT CUSTOMER LOOKING FOR JAKARTA DECEMBER 6TH, 2011 COMPUTRADE TECHNOLOGY INTERNATIONALS GOLDEN CIRCLE CLUB ROUND TABLE DISCUSSION IWAN RACHMAT – SENIOR CONSULTANT
  2. 2. Recent Research on Cloud We Have Done in Q2-2011• Survey done with IT Managers and CIOs in Australia, Hong Kong, China, India, Singapore and Malaysia in Q2 2011• 64% with >500 employees and 36% with 200 to 499 employees • The public cloud is differentiated from private cloud set ups in that public clouds are typically owned by third party providers Public Cloud • Hardware is also located externally in the providers premises and they provide clients leased use of their cloud data centres on tap as a utility service • Private clouds on the other hand are private data centres that are owned by companies themselves Private • What makes them more cloud like than the regular data centre is that they are Cloud upgraded with virtualised servers and can cater for fluctuating bandwidth needs compared with the traditional server which would flounder in the face of sudden spikes in computing demands
  3. 3. “Persists the opinion among local enterprises that cloud computing – especially public cloud – is not secure”• 40 percent of respondents said they felt that public clouds were less secure• Cloud adoption is set to grow at CAGR of 39% through to 2015• The research indicates fear around public clouds has been spread by vendors selling their private cloud offerings• Managing a cloud means securing a centralised network and allowing end points such as PCs and mobiles to connect to it at the edges • “Data Lock-in Model” where it is difficult getting data out of the Web customer relationship management CRM vendor s database once it is in • “Potential hidden-cost” as it will need upfront cost for integration with own Some infrastructure & application with Cloud Cautions • Investment in application architecture online – e.g. when google increases price of using its App Engine caused a panic on the apps community due to cost surge • Dependability of QoS, Performance, & reliability – that has to fully rely on the providers’ promise
  4. 4. APAC Cloud Computing Market OutlookAPAC Cloud Computing is market expected to grow at 39% for the 2010-2015 period;however Cloud adoption in the Asia Pacific region remains one of the most conservativecompared with global peers 5,807 4,284 CAGR: 39% US$ millions 3,132 2,224 1,575 1,124 2010 2011 2012 2013 2014 2015 Approximately 30% of APAC organizations will have adopted some form of cloud computing by 2012. Source: Frost & Sullivan Analysis, 2010 4
  5. 5. Cloud Adoption in APAC Hybrid clouds lead the way ; Cloud adoption growing at a rapid pace 16% 71% 3% 29% 10% N = 600 Not adopted yet Public cloud Private cloud Hybrid cloudSurvey done with IT Managers and CIOs in Australia, Hong Kong, China, India, Singapore and Malaysia in Q2 2011. 64% with>500 employees and 36% with 200 to 499 employees. Source: Frost & Sullivan 5
  6. 6. Cloud Computing: Perception and Usage Trends Cloud is a top priority ; More pressure from senior management At this stage, the risks of cloud far outweigh the 3% 21% 39% 30% 7% benefits I believe that Cloud computing is going to shrink IT 5% 16% 33% 35% 11% teams and make some jobs redundant There is more pressure on me from the top 8% 28% 33% 25% 6% management to procure Cloud services Public Clouds are less secure than private clouds 4% 19% 38% 29% 11% Cloud Computing is my # 1 priority for current/future 6% 20% 36% 27% 11% fiscal year Strongly disagre Somewhat disagree Neutral Somewhat agree Strongly agree N = 600 Source: Frost & Sullivan
  7. 7. #1 Cloud Computing to Transform Entire Industries Industry Cloud Driven Transformation Banking Branchless Banking Utilities Smart Grids IT Post PC Era Media Content Streaming, eBooks Virtual Stores and more Retail eCommerce EMR and Point of Care Healthcare Solutions
  8. 8. #3: PaaS Emerges as Key Cloud Battleground SaaS • Explosive growth ahead- Citizen Engagement (Wikis, Blogs, Data.gov) • Low barriers to entry- Government Productivity (Cloud based tools) • SaaS vendors need to move beyond “pure SaaS” to- Business Enablement (Salesforce.com) “PaaS”- Enterprise Applications (Core Mission &Business Svcs) • Lock-in model PaaS • The key battleground in the future of cloud- Database and Database Management • PaaS market participants are expected to venture Systems aggressively into the SaaS, IaaS turf- Developer / Testing Tools • Openness and integration with other platforms, mobile- Virtual Environments devices crucial IaaS • A segment headed for rapid commoditization- Computing • Robust service delivery platforms and flexi-pricing models- Storage crucial- Application hosting • SaaS is a path of natural progression Source: Frost & Sullivan
  9. 9. Challenges in Cloud AdoptionSome lingering issues that potentially hinder cloud adoption in Indonesia… • How the market understand & perceive the cloudMarketEducation • Market perceptions toward cloud; “security issue” in particular • Public vs. Private Cloud as perception of “lack of control”Security towards data security • Cost transparency in integrating the cloud service with legacy IT systems and equipping staff to manage these servicesInfrastructure • Bandwidth availability • Skill-sets that straddle across storage, server and networkingRegulation • Government support on cloud’s regulation 9
  10. 10. Benefits: What customers’ looking for…key objective is to build trust by providing end-to-end cloud ecosystem… • Data Center location; earthquake, flood prone? Social unrest?Security • System security e.g. framework such as MOF, certification e.g. ISO/IEC 27001:2005, audit report SAS 70 type II • Point of presence • Bandwidth availability; especially for international linkInfrastructure • Space/ floor availability • Electricity reliability; single/ double source? • Strategic partnership with vendors of infrastructure, software,Collaboration programming for implementing and maintaining licenses • Services availability: DRC, data center, managed services • Building managementSupport • Cooling & fire system; to follow international standard • Power back up (diesel capacity) • Certified & skilled technician support 10
  11. 11. Research Conclusion• Cloud computing is a major strategic issue.• Cloud is not a fad, it is a profound shift in the way we use technology.• Cloud is disrupting entire industries and the channel.• The battleground shifts to PaaS.• Huge opportunities exist in a market that is set to fragment further.
  12. 12. For your kind references
  13. 13. Cloud Computing – DefinedAbove all, we have to be on the same page in understanding the “Cloud”…What is the Cloud?• The cloud is a means by which global class, highly scalable and flexible services can be delivered and consumed over the internet through an as-needed, pay-per-use business model• Applications are increasingly “click to run” services that live in remote Internet data centers – not on the PC or local server. They scale to millions and use shared IT infrastructure. “A pool of abstracted, highly scalable, and managed infrastructure capable of hosting end- customer applications and billed by consumption,” - Forrester Research -
  14. 14. Shift from hardware to software, services and cloudThe IT industry itself is being transformed by cloud computing as consumers andbusinesses depend, to a greater extent, on smartphones and tablets 2011 2017 $909 • Web collaboration driving growth, standalone audio slowing down CAGR: 10.5% • India, China, ASEAN are growth markets $500 • Usage of VoIP increases • Basic web conf. features becoming free – $343 threat to existing pure-play players CAGR: 19.7% • New partnerships and business models may $117 become necessary in the next 3-4 yearsAudio & Video Web 14
  15. 15. Cost & Benefits44% end users report more than 10% reduction in cost by shifting to cloud computingwhile 10% report more than 50% cost savings. 5% 6% 40% 9% 10% 15% 15% N = 330 10% 10% 4% 6% 4% 8% Current users of cloud have 49%19% 14% experienced an actual higher savings 8% when compared to “expected savings” from non-adopters 11% 16% 27% 14% N = 77 N = 253 More than 50% 31-50% 21-30% 11-20% 6-10% 0-5% None Source: Frost & Sullivan End User Survey in APAC, 2010 15
  16. 16. Indonesian Cloud Computing MarketThe Indonesian Cloud Computing Market is growing at a rapid pace and is expected togrow at a CAGR of 48% during 2010-2014 Indonesia Cloud Computing 140% Market Growth Forecast, 2010-2014 CAGR: 41.4% 100% 75% CAGR: 55.9% 62% 60% 57% 55% 50% 48% CAGR: 91.5% 43% 37% 38% 2011 2012 2013 2014 SaaS IaaS PaaS Platform-as-a-service (PaaS) is set to be the new battleground in the cloud computing industry as PaaS vendors seek to attract developers to their platforms Source: Frost & Sullivan 16
  17. 17. Impressive growth ahead for IaaS The share of IaaS in Cloud Market is expected to increase to 34% in 2014 from 30 % in 2010 Market Size in 2011 Market Size in 2014 $1.7 $9.7 5% 8% 2011-2014$11.2 $40.930% 34% $70.2 $23.8 58% 65% Source: Frost & Sullivan 17
  18. 18. Key Industry ShiftsMobile Multi-Media & Internet• 3G Penetration Growth • Skype, Google, Facebook• Smartphone proliferation • Search & Commerce to Content &• Tablet demand Communication• Mobile Apps • Consumer Video adoption Industry Shifts Social Network• More time on Social Networks than • Cheaper Bandwidth Email • More Bandwidth• Primary communication medium to • Secure & Optimized Networks share content & discuss • Cloud Computing•Secular trends across demographics • Virtualization 18
  19. 19. Major Trends Shaping the Indonesian MarketTrend # 1: Future Shift in Adoption Patterns• Phase 1 : Basic infrastructure creation• Phase 2 : Increasing competitiveness and connectivity• Phase 3: Optimizing and maximizing IT• Lot of Indonesian enterprises will go through Phase 2 and 3 at the same time forcing them to look at the cloud• Mobility will play a big factor in the push towards cloud – especially PaaS,and SaaSTrend # 2: Increasing Awareness• The entry of global participants, and their marketing initiatives in the form of conferences and road shows, This is expected to drive awareness levels and adoption in the long term.• However, enterprises continue to remain skeptical of Cloud adoption due to Security and Privacy concerns.Trend # 3: Nascent Market , growing maturity of suppliers• Currently nascent but huge supply side push with lots of launches in last one year• Perceived Lack of infrastructure with regards to internet connectivity and availability.• However maturity of service offerings, enterprises would be keener to move some of their IT spend to Cloud.
  20. 20. The Public CloudCloud Computing leverages virtualization, to provide scalable, elastic, cost effectiveplatforms and services Challenges V.S. Benefits • CapEx reduced • Security • Control OpEx • Governance / Compliance • Agility • SLAs • Re-focus on core business • Risk to brand & revenue • Leverage economies of • Multi-tenant scale • Vendor viability • Rapid deployment • Cost of transition • Elasticity • Portability • Outsourced maintenance • Loss of control • Future Proofing • Performance • Availability • Security 20
  21. 21. Value Proposition of Cloud ComputingThe key to selling cloud services is effective communication of its key value proposition Cost Saving Facts ….In customer language… • Using virtual machines and unified • Cost savings experienced by other cloud computing, Service Providers can deliver the service customers. same hardware resources much cheaper • A sample case study to show how cloud than enterprises. services can reduce the cost of the • Cloud computing rationalizes the IT customer. department. Focus on Core Competencies, Automation of IT Facts …In customer language… • Cloud services saves senior management • Typical enterprise issues with or without from being bogged down by IT related issues cloud services. and focus on core business. • IT can focus on strategic requirements of the enterprises rather than day-to-day maintenance. 21
  22. 22. Cloud Disrupts the Channel The shift from Product to Services will exert tremendous pressure on existing 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 II. 3-Tier Structure Vendor Distributor Vendor Reseller Reseller Reseller Customer Customer III. 2-Tier Structure IV. 1-Tier Structure
  23. 23. Value Proposition of Cloud ComputingSix points about “cloud” as value propositions to the customers 1. Focus on Business: Cloud computing saves companies from being bogged down by day-to- day IT related issues and focus on strategic issues. 2. Agility: Cloud computing lets the enterprise pay for exact amount of computing/storage requirements they need and scale up or down very fast. This reduces cost and lets them respond to business needs fast. 3. Cost Saving: Shifting to cloud saves 10% to 50% of current hardware & manpower costs for the companies (even compared to servers hosted at datacenters). 4. Technology Edge: Cloud computing keeps the enterprise on latest technology with hardware being replaced every 2 years. This allows enterprise to create IT based competitive advantages. 5. Uniform Access: Cloud computing gives similar access of resources to employees across locations. 6. Standardization: Cloud computing eliminates multiple hardware platform and allows standardization in IT processes. 23
  24. 24. Increasing Demand has Led to Entry of Global Market ParticipantsThe Indonesian Cloud Computing market has been witnessing increasing tractionfrom local enterprises as they learn more and more about the delivery model and theopportunity to decrease costs and bring in efficiencies.• Foreign investments in the Telecom sector and the expansion plans of local players into the Broadband Wireless Access has attracted the attention of the global players, such as Google, Amazon, NetSuite, Salesforce, RightNow, Oracle and Zoho have entered the Indonesian market, primarily through channel partners.• These participants currently hold a large share of the market with limited offerings from local service providers.• In terms of user segments, Manufacturing dominates the adoption level across verticals in Indonesia. Further, the SMBs and Large Businesses contributed almost equally to the market in 2010, a trend which is expected to continue in the medium term.
  25. 25. Cloud Computing – EcosystemCloud infrastructure ecosystem will determine service delivery to the market MIDDLEWARE DATABASE PLATFORMS COMPUTING STORAGE NETWORK Indonesia players:
  26. 26. Current Market Players
  27. 27. Recent Industry Development• Development of cloud computing technologies also be applied in the field of health services is now being developed - connecting stakeholders in the health services, such as doctors, nurses, the health sections and patients - Indosat & Alcatel- Lucent• Education System, through cloud is in trial phase for 20 schools in Yogyakarta. The similar method will also be applied for University system – Microsoft Indonesia• Indonesia’s National Coordinating Agency for Survey and Mapping, BAKOSURTANAL, is taking its GIS initiatives to a whole new level by developing its NSDI using cloud computing technology to have seamless sharing of information between different agencies, and also provide various opportunities for BAKOSURTANAL to become more cost-effective, productive, flexible, and efficient – Indonesia Government – ESRI• To provide Public & Private Cloud services fro SMB with target of around 150K SMBs – Indonesia Cloud – Dell Indonesia
  28. 28. Key Takeaways• Significant market potential within the next 5 years with projected CAGR of 39%• Communication & education to the market is key initial step in introducing “Cloud” to alleviate general issues of security & privacy of public cloud• Some industry trend that create market pull & to the cloud development incl. booming on smartphone & tablet demand, fast adoption on social network, and pressure on high CAPEX for telecom• Some issues that can hinder development of cloud going forward; in area of market education, security, infrastructure, & regulation – to be solved in order for the industry to be fully taking off• To identify what customers looking for in subscribing to the “cloud”; from security issues up to support & certification i.e. to provide them with trust & security• To communicate to customer using their language & to forward cloud’s value propositions
  29. 29. Thank You iwan.rachmat@frost.com twitter: iwanr2010Global Growth Partnership Company 29
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