Mid-Markets in the Cloud: How Cloud Providers Can Capture the Undertapped Opportunity

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An analyst briefing delivered by program director Lynda Stadtmueller on mid-markets in the cloud.

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Mid-Markets in the Cloud: How Cloud Providers Can Capture the Undertapped Opportunity

  1. 1. Mid-Markets in the Cloud:How Cloud Providers Can Capture the Undertapped Opportunity Lynda Stadtmueller Program Director, Cloud Computing
  2. 2. Today’s Presenter Lynda Stadtmueller, Program Director Frost & Sullivan 2 2
  3. 3. Focus Points•About the Mid-Markets•The 2011 Frost & Sullivan Cloud User Survey: Mid-MarketsFirmographics•MidMarkets in the Cloud: Adoption & Perceptions•How Cloud Service Providers can Tap the Mid-Market Potential 3 3
  4. 4. About the Mid-Markets IT needs are identical to large100-499 employees business in scope, if not scaleU.S. market size: But they have fewer resources (people, budget) to address those needs 90,000 companies 360,000 locations They approach cloud as part of a 17 million employees bigger, data center decision (Source: 2008 U.S. Census) Tech-savvy, nimble & creative And willing to spend on value. 4 4
  5. 5. Mid-Markets are Well-Suited to the Cloud• Enables IT to support business growth and compliancerequirements• Budget-friendly – Reduce/defer capital expenditures; reduces needfor specialized staff• Scalable – Supports market agility and business fluctuations Yet most providers target their services and marketing toward large businesses. 5 5
  6. 6. Frost & Sullivan 2011 Cloud User Survey:Mid-Market RespondentsWeb-based survey of 300 U.S.-based IT decision-makers conducted April 2011.Mid-Markets = 77 respondents. Title Owner or Industry C-Level Education Financial Other Other Executive 5% Svcs/ 31% 17% 20% Insurance High Tech 33% VP or 13% Director Health 31% care IT 32% Manager or Supervisor 18% 5 years Number of Locations Company Existence or less More than 50 9% 20+ years 6-10 years 3% 25% 12% 10 to 19 19% Single 18% 21-50 years 11-15 years 5 to 9 2 to 4 32% 21% 13% 39% 16-20 years 9%N=77 Source: Frost & Sullivan 6 6
  7. 7. Mid-Markets In the Cloud: Familiarity and Usage 1/3 are cloud believers 1/3 are unfamiliar Familiar 1/3 are unconvinced with and Familiar Currently about cloud with and Use Not very Plan to 13% Familiar Implement 33% Within the Next 24 Months 17% Familiar with but No Plans to Implement 37% Source: Frost & SullivanN=77 7 7
  8. 8. Mid-Markets Are Willing to Spend on Data Center/Cloud What is your estimated budget to implement your cloud computing/data center strategy for 2011? 20% of mid-market respondents $601,000 - Over $1 $1 million million have budgeted over $300,000 to 6% 1% implement cloud/data center $301,000 - strategy in 2011. $600,000 12% Less than $25,000 36% 30% have increased their budgets from 2010 to 2011. $101,000 - $300,000 18% 65% of budgets have remained the $20,000 - same. $100,000 27% Only 5% have decreased their budgets.N=77 Source: Frost & Sullivan 8 8
  9. 9. Top Data Center Challenges: Mid vs. Large Keeping up with new technology 49% Aging, inefficient servers/ eqpt 42%Minimizing downtime/ increasing availability… 40% Mid-markets struggle to keep up Growth of data storage requirements 34% with new technology and keep Slow/poor performance of applications 32% apps running. Reduction in capital budget 26% Large businesses struggle with storage. Lack of funds for training 22% Delivering apps to remote users 19% Mid-sized businesses (N=77)0% 10% 20% downtime/increasing Minimizing 30% 40% 50% 60% 24% availability of apps 40% Keeping up with new technology 31% 49% Growth of data storage requirements 55% 34% 0% 10% 20% 30% 40% 50% 60% Large (N=99) Mid (N=77) Source: Frost & Sullivan 9 9
  10. 10. Top Drivers to Cloud Adoption: Mid vs. LargeDefer/Avoid Expansion of Data Center… 62% Strengthen Business Continuity 38% Prepare for Disaster Recovery 38% Mid-markets seek to avoid Earn a High Return on Investment 38% capital costs for data center Improve Security/Compliance 33% expansion. Defer Server Purchases/ Upgrades 33% Large businesses seek toShift from Capital to Operating Budget 24% bolster business continuity. Strive to Go Green 14% Decrease IT Staff 10% 0% 10% 20% 30% 40% 50% 60% 70% Mid (100-499) N=21 32% Defer/Avoid Expansion of Data Center Facilities 62% 63% Strengthen Business Continuity 38% 0% 10% 20% 30% 40% 50% 60% 70% Large (500+) N=19 Mid (100-499) N=21 Source: Frost & Sullivan 10 10
  11. 11. Top Criteria in Selecting a Cloud Provider: Mid vs. Large Availability (uptime) SLAs 52% Ease of migration to cloud 48%Private (dedicated) cloud option 24% SLAs for data loss/ leakage 19% Easy to use mgmt system 19% Low price 19% Mid-Markets expect the provider to keep App performance SLAs 19% apps running and help with migration. Consistent pricing 14% Large businesses want to control security. Open source platform 14% Managed service options 14% 0% 10% 20% 30% 40% 50% 60% 21% Mid (100-499, N=21) Availability (uptime) SLAs 52% 21% Ease of migration to cloud 48% 42% Escalating tiers of security options 5% 0% 10% 20% 30% 40% 50% 60% Large (500+) N=19 Mid (100-499) N=21 Source: Frost & Sullivan 11 11
  12. 12. Who Will Mid-Markets Turn to For Cloud StrategyAssistance? A security services provider 6% 88% of mid-markets will get Hypervisor vendor outside help to develop and 6% An independent implement their cloud strategy. consultant/ VAR A managed 22% services provider 9% A cloud services provider My data center 10% infrastructure provider 22% Well do it ourselves 12% My network service provider 13% 12 12
  13. 13. Tapping the Mid-Market Potential for Cloud Services Approach mid-markets with a broad view of data center environment: traditional,hosted, private & public cloud. Fortify cloud offers to simplify the configuration/decision. Align marketing messages with mid-market needs (e.g., focus on deferral ofcapital investments and minimal labor requirements). Don’t oversimplify the technology or understate the risks. Instead, help constructa risk-benefit analysis. Provide professional or managed services to help mid-markets develop strategyand manage implementation. Mid-markets are poised to burst into the Cloud. Don’t miss the opportunity to serve them! 13 13
  14. 14. Next StepsRequest a proposal for or Growth Partnership Services or GrowthConsulting Services to support you and your team to accelerate the growth ofyour company. (myfrost@frost.com) 1-877-GoFrost (1-877-463-7678)Join us at our annual Growth, Innovation, and Leadership 2011: A Frost &Sullivan Global Congress on Corporate Growth (www.gil-global.com)Register for the next Chairman’s Series on Growth: Driving Innovation – TheWhat, Why, and How. Visions and Benchmarks as the Innovation Key(October 5th) (http://www.frost.com/growth)Register for Frost & Sullivan’s Growth Opportunity Newsletter and keepabreast of innovative growth opportunities 14 14(www.frost.com/news)
  15. 15. Your Feedback is Important to Us What would you like to see from Frost & Sullivan?Growth Forecasts?Competitive Structure?Emerging Trends?Strategic Recommendations?Other? Please inform us by rating this presentation. Frost & Sullivan’s Growth Consulting can assist with your growth strategies 15 15
  16. 16. Follow Frost & Sullivan on Facebook, LinkedIn, SlideShareand Twitter http://www.facebook.com/FrostandSullivan http://www.linkedin.com/companies/4506 http://www.slideshare.net/FrostandSullivan http://twitter.com/frost_sullivan 16 16
  17. 17. For Additional InformationMireya Espinoza Craig HaysCorporate Communications VP of Sales, North AmericaInformation & Communication Information & CommunicationTechnologies Technologies(210) 247-3870 (210) 247-2460Mireya.espinoza@frost.com chays@frost.comLynda StadtmuellerProgram DirectorCloud Serviceslstadtmueller@stratecast.com 17 17

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