The Revolutionary Impact of the Cloud by Arun Chandrasekaran

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The Revolutionary Impact of the Cloud by Arun Chandrasekaran

  1. 1. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in any form without Gartner's prior written permission. If you are authorized to access this publication, your use of it is subject to the Usage Guidelines for Gartner Services posted on gartner.com. The information contained in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication consists of the opinions of Gartner's research organization and should not be construed as statements of fact. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner's Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see "Guiding Principles on Independence and Objectivity." Arun Chandrasekaran The (R)EVOLUTIONARY IMPACT OF CLOUD
  2. 2. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Your IT Forecast: Very Cloudy, With Scattered Thundershowers 1 SaaS $129.4M in 2014 IaaS $82.6M in 2014 PaaS $33.4M in 2014
  3. 3. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Key Issues 1. What are the key trends in the cloud computing? 2. What impact is cloud computing having on today’s business climate? 3. How can channel partners and vendors capitalize on emerging opportunities? 2
  4. 4. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Key Issues 1. What are the key trends in the cloud computing? 2. What impact is cloud computing having on today’s business climate? 3. How can channel partners and vendors capitalize on emerging opportunities? 3
  5. 5. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. The Cloud is Cloudy: Three Major Discussions Access Open Limited Closed Owner Provider Provider Enterprise/Provider Model 1:All – 1:Many 1:Few 1:Few – 1:1 Private Cloud Utility Services Public Cloud Enterprise Hype Curve
  6. 6. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. AHA SLIDE – Cloud is Cloudy • 4% - weil der Provider das so sagt23% 21% 20% 9% 5% Access via Internet Ability to grow and shrink usage Multiple clients use simultaneously No upfront investment Supplier uses that terminology Why classify a service as a cloud service?
  7. 7. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. The Two Sides of the cloud • 4% - weil der Provider das so sagt47% 35% 27% 26% 27% Security of service Data location, privacy, access Cost uncertainty and variability Inadequate service level Increased business risk What's holding you back?
  8. 8. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Mainstream Use Cases, Public Cloud Services Through 2014* D• SaaS (Analytics, E-Mail, Collab.) E• Select Cloud Optimized Apps F• Parallelized or HPC Workloads B• Prototyping/Proof of Concept Base Use Case Unpredictable and/or volatile workloads Project based workloads Rapid provisioning User self-service Peripheral Processing Disaster Recovery Leverage economies of scale and grid execution Other Key Considerations Manageable data risk Simple connection to internal applications Service licensing in place C• Web Site & Application Serving A• Development/Test and Projects * Excludes Information & Business Services
  9. 9. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. What CEOs and CIOs are saying… 8 23% 10% 8% 4% 10% 8% 6% 6% 5% 5% 10% 11% 12% 8% 5% 9% 6% 6% 5% 2% 9% 7% 7% 13% 7% 6% 8% 6% 7% 3% Growth Profitability Cost Workforce Customers Sales and marketing Operations Geographic growth Products Financial Top priority Second Third CEO priorities lead to CIO priorities Source: 2013 Gartner CEO & CIO Surveys Top 10 CIO Business Priorities 1 Increasing enterprise growth 2 Delivering operational results 3 Reducing enterprise costs 4 Attracting and retaining new customers 5 Improving IT applications and infrastructure 6 Creating new products or services 7 Improving efficiency 8 Attracting and retaining the workforce 9 Implementing analytics and big data 10 Improving business processes Business priorities drive the need for transformation. Top 10 CEO Strategic Business Priorities
  10. 10. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Key Issues 1. What are the key trends in the cloud computing? 2. What impact is cloud computing having on today’s business climate? 3. How can channel partners and vendors capitalize on emerging opportunities? 9
  11. 11. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. By 2016, the primary use of the term "cloud" will be to describe initiatives that are business led rather than IT led. Strategic Planning Assumption © 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
  12. 12. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. The Cloud Services Market Phenomenon 11 • Cloud services propose to replace EVERY existing operating model • IT roles will change: • Evolve (transform) • Expand (combine old + new) • Eliminate, or at least diminish • Externalization and standardization are key design points • Expectations are enormous – and often irrational • Cloud services are laying the foundation for the next generation of IT innovation Cloud Computing: a style of computing where scalable and elastic IT-related capabilities are provided 'as a service' to customers using Internet technologies. Cloud Services
  13. 13. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Cloud Services Disrupt and Benefit 12 Disruptor Benefactor People Process Technology Skills Roles & responsibilities IT decision makers IT procurement Externalization Business processes Procurement models Hybrid scenarios IT service delivery IT operations management Legacy application and infrastructure obsolescence Empowerment through self- service Business focus Strategic roles (IT and non-IT) Agility Externalization OPEX business model Sharing (interal/external) Increased efficiency Next-generation platform Cost savings (?) Availability and scalability
  14. 14. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Business Leaders Have an Increasing Role in IT Spending Decisions 40% of SaaS purchases are made by business leaders rather than IT BusinessIT Cloud purchase decisions are increasingly shifting to business leaders. "Business benefits" is the top reason for cloud services adoption. Business unit leadership's influence over technology decisions will double in the next two years. 13
  15. 15. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Key Issues 1. What are the key trends in the cloud computing? 2. What impact is cloud computing having on today’s business climate? 3. How can channel partners and vendors capitalize on emerging opportunities? 14
  16. 16. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Industry Adoption Shows Clear Trends Advanced Heavy Moderate Measured Lagging Industry Adopting Financial services Private cloud IaaS/PaaS, Select SaaS Telecommunications Community cloud and service providers Government Community cloud and SaaS Education Email and collaboration High Tech Panicky migration from vendor to provider Energy and utilities Some SaaS esp. financial and HR support Healthcare Public records, medical processes Retail Brokerage and messaging integration
  17. 17. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. The New Vendor Reality: A Risky Transition • Manage the shift from product to service • Risky proposition – giving away your customers • Discovering new pricing models • Cannibalizing on-premises products • New powerhouse vendors • Will the business models work?
  18. 18. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Benefits • Reach new customers, markets • Predictable revenues • Better intelligence and customer traction • Lower cost of support • Be a disruptor Risks • Transformative changes needed – Platform, people, processes • Demonstrate value upfront • Slower pipeline build-out • Less ability to sell high- value customization • Less value to Channel Transitioning to Cloud: Benefits & Risks
  19. 19. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. To Cloud or Not to Cloud 18 Cloud GrowDefend • Set up a dedicated organization or subsume within? • Port my existing code or acquire a cloud native platform? • How do I change my sales team effectiveness to sell cloud? • How do I segment my customers? • How can I transform from an ISV(or IHV) to be a service provider? • Is your competitor succeeding with a SaaS App? • Can you grow your customer base and/or retool your platform?
  20. 20. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. • SaaS was growing at 40% ; On-prem growing at 10% • Code too old and stodgy to be ported to Cloud • Acquired a cloud start-up • All sales reps were trained to sell both; no penalty or quota for one vs. another • No attempt to integrate. Provide customers the choice • Both products are still growing; Clean deployments Large ISV Case Study – On-Prem to SaaS Challenge: 15 year old product ; New competitors with a SaaS Model eating away Market share
  21. 21. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Infrastructure as a Service Platform as a Service Software as a Service Information as a Service Bus Process as a Service Service Delivery Service Delivery Service Delivery Service Delivery Service Delivery Process Process Process Process Process Data Data Data Data Data Apps Apps Apps Apps Apps Platform Platform Platform Platform Platform Infra Infra Infra Infra Infra Technology – Responsibilities Provider Responsibility Subscriber Responsibility 20
  22. 22. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. IT purchases, moving out from under IT department control into new buying centers Software Development integration and custom development critical for cloud services Convergence of technology forces convergence of partner typesCloud lack of appropriate leverage (programs & skill) put cloud adoption at risk Channel Play for cloud enable - Cloud Service Brokerage (CSB), reseller, builder Services new outcome driven solutions require ‘invested’ partners Channel Trends 2014 IT Skills lines blur between traditional IT skills and business skills New Challengers “born in the cloud” partners are new competition
  23. 23. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Channel Programs Must Evolve Today Tomorrow • Efficiency (simplification) • Mass partner recruitment • Tiered, based on volume + value • Certification • Product-based programs • Partner program • Aligned vendor + partner • Geographically limited • ISV disconnect • Effectiveness (improved sales) • Targeted capacity planning • Tiered based on value • Competency and Specialization • Partner business model based • Partner "ecosystem“ – “marketplace” • Aligned customer + partner + vendor • Global in scope and coverage • Integrated ISV + Resellers
  24. 24. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Cloud Models Fundamentally Transform the Way IT Services Are Delivered IT Delivered as-a-service Hybrid IT Traditional IT Cloud Service Brokerage Private Cloud(s) Public Cloud(s) Hybrid Cloud 23 Cloud services create an agile, scalable, cost-effective platform for next-generation business solutions based on the Nexus of Forces: mobile, social and big data.
  25. 25. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Cloud Services Brokerage Opportunities Aggregation Brokerage Customization Brokerage25% 50% 75% 100% Integration Brokerage ISV * System Integrator * Definition: CSB is composed of three primary roles in which an intermediary adds value to one or more cloud services on behalf of consumers of those services. Providers of CSB compete on the relative strengths of the three CSB roles Distributor * Partners Either • Are a brokerage • Enable brokerage • Leverage brokerage
  26. 26. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Recommendations  Clearly understand customer’s value propositions for adopting cloud computing.  All vendors are engaged in some way with cloud computing — know your strengths and prove your enterprise readiness.  Maximize the scale for options that you pursue.  Seek to address the rights of consumers of cloud services.  Service interfaces are as important as enabling technologies.  Partner with cloud brokerages to enhance performance and cloud service capabilities.  Manage the transition and constantly adapt to new realities.
  27. 27. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Recommended Gartner Research  CEO and Senior Executive Survey 2013: As Uncertainty Recedes, the Digital Future Emerges Mark Raskino, Jorge Lopez (G00247308)  Cloud Computing and Its Impact on IT Economics, Finances and Planning Assumptions Kurt Potter (G00253434)  Three Factors Will Significantly Impact Enterprise Cloud Use in the Near to Midterm Future Gregor Petri (G00253329) Service Providers  Cloud Solution Providers Ignore Customer Processes at Their own Peril Gregor Petri (G00247642)  Competitive Landscape: Data Center Transformation Services Warren Bell (G00231275) For more information, stop by Gartner Research Zone. 26

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