Cloud Computing Trends End User Perspective A Clear Look Throught the Cloud Presentation developed for:
Agenda 1 - What is going on? 2 - Understanding the Cloud 3 - Cloud Computing: the real scenario 4 - Cloud Computing: a look ahead 5 - Competitive Landscape 6 - Final Words
1 - What is going on?
Economical stability in some countries will leverage IT investments in the region
IT Investments are direct linked with external factors.
Those same external factors are direct linked between them.
The same holistic overview is more and more moving towards a global perspective, getting out of the local landscape.
Technology is key for short, medium and long term growth!
Economic Landscape IT Investments Competitive Environment Government Incentives Regulation Demand Source: Frost & Sullivan
After a slow year, the horizon is promising to the region The macroeconomic consistency presented by some countries in the region before the global economic downturn in 2009, was an important factor that decreased the impact in the region. GDP 2010 GDP 2011 5.2% Latin America – GPD Growth GPD Forecast - 2011 7.6% 6.8% 6.7% 4.5% USD 3.97 Trillion USD 4.17 Trillion Source: Frost & Sullivan, World Bank, Cepal
And the IT department is always facing the same challenges
Constant pressure to reduce costs.
Increase operational efficiency.
Fastness in solutions implementations.
Optmize the use of IT to leverage business.
IT aligned with the core business of the company.
Technology was a fundamental piece in the cost saving objectives of companies in 2010 ( Not Raking)
It is evident that company's Chief Financial Officers (CFOs) will have greater control over IT investments. Hence, there will be a clear predilection over investments in IT areas that have direct consequence in reducing costs and increasing revenues and profit margins.
IT Infrastructure Outsourcing
Software as a Service
Adecuacy on long term contracts
Reduction on ITbudgets
Postopone of someIT projects
Strong impact on small and medium business.
2 – Understanding the Cloud
Software as a Service (SaaS) Consists in the software distribution whereas a company provides maintenance, support and client’s operation during the service contracted period. Platform as a Service (PaaS) Its primary use is focused on providing a complete solution for application development and launching and Web services that are fully available online. S3 Infrastructure as a Service (IaaS) It provides to the customer a computing infrastructure as a service, using mostly virtualization. The client attains resources from an outside vendor such as hosting, computing capacity, maintenance and network management Market Definitions
Cloud Computing encompasses major advantages from other past IT architectures and services Cloud computing is a flexible and scalable shared and/or private environment in which third-party suppliers or in-house architectures use virtualization technologies to create and distribute computing resources to customers on an as-needed basis, via the Internet browser.
More than a technological revolution, Cloud Computing is the ultimate evolution of a series of environments and technologies.
However, due to its emergent stage and current retsraints, the original concept of cloud computing suffered adaptations by providers to addreess clients’ needs.
Cloud Computing Characteristics Distributed computing Pay per Use Browser-based client √ IT Architectures √ √ √ √ √ √ √ Cloud Computing Utility Computing Grid Computing Virtualization Tecnologies Software as a Service Platform as a Service √ Web Services
An impressive 20% of the companies in Latam had an excellent understanding of the Cloud Computing concept Market Knowledge and Awareness – Latin America N = 110. Source: Frost & Sullivan
IT executives in Mexico have a higher understanding regarding the cloud computing concept in comparison to the rest of Latin America.
Some top reasons for that is the general maturity level regarding IT and some early adoptions leveraged by multinational companies established in the country.
3 – Cloud Computing: the real scenario
T he economic unrest experienced in 2009 made CIOs want to know more about Cloud Computing Current Market Adoption – Latin America N = 110. Source: Frost & Sullivan
Cloud computing highest adoption rate mainly in Mexico and Brazil. Nevertheless, large enterprises in Latin America are strongly engaging into the cloud computing concept and adoption rate for the short term is likely to increase 30%.
The concept of cloud computing encompasses significant promises Current Market Adoption
Cloud Computing adoption is still very fragmented among verticals. Nevertheless, there is a clear current adoption acceptability from three main verticals: Industry and Manufacturing, Banking and Finance, and IT and Telecom.
The government sector still has some security and privacy issues that restraints the adoption of cloud computing toward further solutions and services.
Brazil Mexico Colombia Companies that already adopted the cloud computing concept 25% Companies without any type of cloud computing solution 75%
Whilst public clouds suit small and medium companies’, enterprises demand private environments Current Market Adoption – Latin America N = 110, Source: Frost & Sullivan
Due to the emerging stage of the cloud computing trend in the region and also globally, the majority of enterprises that already adopted the model, preferred the private one (either outsourced or developed in-house).
The hybrid and public models are expected to gain share in the near future as companies start to trust more in this new technology business model and more local successful case studies are released.
Enterprises in Latam are starting the cloud adoption in the application level Current Market Adoption – Latin America N = 110, Source: Frost & Sullivan
Driven by marketing efforts and also available offers, enterprises in Latam have started the cloud computing adoption by the application level ( CRM, ERP; BI, Email etc)
Platform utilization ( Web Site Hosting, E-commerce) is still low and very punctual. Within the infrastructure level, companies are expected to increase the cloud adoption in the short term.
Database solutions was by far the most participative with an 82.4 percent penetration Top Cloud Computing Solutions and Services - 2010
BI (Business Intelligence)
Application Platform Infrastructure 85% 30% 60%
4 – Cloud Computing: a look ahead
Cloud Computing is clearly going to witness significant growth in the short-term in Latam Frost & Sullivan Future Market Adoption (2011 and 2012) – Latam
With 65 percent of companies planning to adopt or expand their Cloud Computing architectures in 2011 and 2012, this IT trend is clearly going to witness significant growth in the short-term in Latam.
Noteworthy highlights to the intent of adopting Hybrid Clouds, with 30.8 percent penetration, where companies can reap the advantages of public Clouds for some processes, while maximizing the security and privacy of their operations by also having private Clouds in place.
Security is King to the enterprise segment
Most of the major factors driving adoption of the Cloud Computing concept by companies in Latin America & Caribbean are the same ones that boost more mature markets such as the USA and Western Europe.
Security is the top reason cited by enterprises for avoiding Cloud solutions. In some cases, the concerns are legitimate: clearly, anytime a resource is shared, there is greater risk of unauthorized access and contaminated data. Specifically in “public clouds”, when access is via the Internet, the possibility of unauthorized access increases and so does the risk of digital crimes.
Market Drivers – Cloud Computing – Latam Top mentions in order of importance IT cost reductions Business Continuity Operational elasticity Faster “time-to-market” Market Restraints – Cloud Computing – Latam Top mentions in order of importance Security & Privacy Lack of Knowledge and Awareness Internet Constraints Loss of Control Source: Frost & Sullivan
Cloud Computing providers still have key challenges to overcome in this market Lack of clear regulations No clear pricing structures Lack of knowledge on offers Government participation Standardize offers Strong marketing and comm. strategy
Potential Verticals for Cloud Computing Providers in the Region Oil & Gas Mining Energy Utilities
5 – Competitive Landscape
Quality is already an integral part of the offer and decision making is beyond the IT department
For enterprise segment, security is king. With 77.5 percent penetration, security is the most important characteristic considered in the process of selecting a Cloud Computing provider.
Growing importance of the chief financial officer (CFO) over IT strategic plans and short-term investments. Most IT service providers and vendors have been trying extremely hard to customize their go-to-market strategies in order to address the CFOs and creating tools to show return on investment (ROI).
Key Attributes Considered in the Selection of a Cloud Computing Provider –Latin America 77.5% 65.0% 42.5% 40.0% 27.5% 25.0% 20.0% 12.5% 7.5% 20.0% N = 110, Source: Frost & Sullivan
Global players are the major participants within the cloud computing market
Partnerships among IT service providers and application developers are expected to keep growing within the cloud computing landscape. This is key to build up an integral cloud computing solution.
Telecom service providers are still not perceived as cloud computing players by end-users in most part of Latin America. This scenario is likely to change in the short term.
Cloud Computing Providers Preferred by Respondents (Latam), 2010 10% 10% 10% 15% 20% 45% 50% 65% 70% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% SAP Amazon Unisys Oracle Salesforce HP Google Microsoft IBM
Telcos have huge opportunity to attend SMB segment in the region Broadband +
Perfect ICT solution for SMB segment. Specially Saas.
Solution to antipiracy Software
95% of enterprises structure in Latam are SMB
One stop shopping concept All ICT solutions with one provider)
With IT Partner
6 – Final Words
IT Service Players have to Shift from Providers to Partners 1 – Understand your client’s business! The CFO wants to see the return over the investment. 2 – Security, Price, and Market Experience. Those are key attributes to focus on. Quality is already default. 3 – Focus are on: e-commerce and storage (infrastructure), ERP, CRM, and BI (applications), application testing (platform).
CIO: Strategic Role within Organization Rol de IT/Telecomunicaciones en las Empresas CIO, CTO: More strategic role within Organization Align IT area to Bussiness Customer Focus Loyalty More Wallet Share Market Share Support to increase productivity Support to reduce costs and reduce risks
Frost & Sullivan Marcelo Ruiz IT & Communications Global Consulting Director and Country Manager Colombia Frost & Sullivan Tel: 571 6292729 [email_address]