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Cutting through the fog: What is private cloud and what role does it play in the broader IT market?

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While some vendors found themselves unprepared for the first waves of public cloud adoption, they can now catch up with the market through the solutions and purchasing processes offered through …

While some vendors found themselves unprepared for the first waves of public cloud adoption, they can now catch up with the market through the solutions and purchasing processes offered through private cloud. Private cloud offers the benefits of cloud without customers needing to shift all responsibility of delivery to an external firm. As a result, budgets for and adoption of private cloud are increasing, driving a market opportunity increasingly on par with the more mature public cloud space.

TBR’s research team invites you to view a webinar that originally aired Thursday, July 31, 2014, highlights TBR’s research-based findings and focus on how private cloud will transform the market. This webinar provides high-level analysis of vendor opportunity and the customer and competitor landscapes surrounding private cloud.

Cloud Practice Manager and Principal Analyst Allan Krans and Content Manager Christian Perry shared their perspectives on the trends driving private cloud adoption and provide webinar attendees with additional insight into vendors’ strategies and the future of the private cloud market. They then fielded questions from the audience related to the report.

Questions for discussion will included:

• How do customers perceive and purchase private cloud?
• Which are the leading vendors in the third-party-managed and self-built private cloud markets?
• What strategies are leaders utilizing and in what direction are they headed?

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  • 1. TBRT ECH N O LO G Y B U SIN ESS RESEARCH , IN C. Cutting through the fog: What is private cloud, and what role does it play in the broader IT market? July 31, 2014 TBR’s Private Cloud Webinar
  • 2. TBR TBR Quarterly Webinar Series | 7.31.14 | www.tbri.com | ©2014 Technology Business Research Inc. Private Cloud Webinar: Presenter Allan Krans Cloud Practice Manager Email: allan.krans@tbri.com Twitter: @allankrans Insert Analyst Photo 2
  • 3. TBR TBR Quarterly Webinar Series | 7.31.14 | www.tbri.com | ©2014 Technology Business Research Inc. Key Takeaways: Point 1 Private clouds, combined with increasing management and integration capabilities, will enable the next step in cloud solution delivery 3 Customization is the driving force behind the growth in private cloud opportunity. Multiple routes will exist for customers to create and consume more cloud-delivered integrated solutions. Insert Picture Insert Picture Skills are a barrier vendors will need to help customers overcome.
  • 4. TBR TBR Quarterly Webinar Series | 7.31.14 | www.tbri.com | ©2014 Technology Business Research Inc. • Skills to manage delivery and security • Growing public cloud accessibility Growth in private cloud will moderate as the broader market develops skills to build or consume IT through this new delivery method Global Private Cloud Market Drivers 2014: $41 billion 2018: $69 billion Barriers • Line of business (LOB) purchasing involvement • Tight data center capacity • Emerging standards 50% CAGR 14% CAGR 2010: $8 billion Cloud Customization ~NEW~ ~NEW~ ~NEW~ ~NEW~ 4
  • 5. TBR TBR Quarterly Webinar Series | 7.31.14 | www.tbri.com | ©2014 Technology Business Research Inc. Private cloud adoption returns more of the control and consideration to the IT department Public Cloud Adoption • Shadow IT purchasing • Fragmented management Private Cloud Adoption • IT-driven purchasing • Traditional management Early Hybrid Adoption • IT and LOB purchasing • Modern management Technology-focused Adoption Outcome-based Adoption Pendulum of Cloud Adoption IT is at least involved, if not controlling, nearly 70% of private cloud purchasing. Security, usage monitoring and integration are top private cloud concerns. Cloud Customization 5
  • 6. TBR TBR Quarterly Webinar Series | 7.31.14 | www.tbri.com | ©2014 Technology Business Research Inc. Integration and Aggregation Layer Delivering cloud services as solutions is a largely services-based opportunity that exists above and across cloud services Cloud Solutions Delivery Options Public Cloud CRM Self-built Private ERP Traditional On-premises Accounting Delivered via: Systems Integration Managed Services Cloud Orchestration Services Business Process as a Service (BPaaS) Cloud Brokerage ~NEW~ ~NEW~ ~NEW~ Cloud Customization 6
  • 7. TBR TBR Quarterly Webinar Series | 7.31.14 | www.tbri.com | ©2014 Technology Business Research Inc. Key Takeaways: Point 2 Private clouds, combined with increasing management and integration capabilities, will enable the next step in cloud solution delivery 7 Insert Picture Insert Picture Customization is the driving force behind the growth in private cloud opportunity. Multiple routes will exist for customers to create and consume more cloud-delivered integrated solutions. Skills are a barrier vendors will need to help customers overcome.
  • 8. TBR TBR Quarterly Webinar Series | 7.31.14 | www.tbri.com | ©2014 Technology Business Research Inc. With IT more involved, private cloud is highlighting the gaps between cloud services and traditional IT organizations Gaps in Private Cloud Capabilities NIST Cloud Essential Characteristics: 1. On-demand self-service 2. Broad network access 3. Resource pooling 4. Rapid elasticity 5. Measured service Corporate IT Typical Characteristics: 1. IT-serviced 2. Dedicated networks 3. Resource dedication 4. Incremental elasticity 5. Aggregate service Private cloud is highlighting the gaps Top barriers: How can I scale efficiently? How can the usage be metered and reported back to constituents? How can these services be integrated and secured? Private Cloud Skills 8
  • 9. TBR TBR Quarterly Webinar Series | 7.31.14 | www.tbri.com | ©2014 Technology Business Research Inc. Gaps in the skills and requirements for application migration significantly impact the workloads that can be transitioned to private clouds 2014 Expectations Versus Reality Private cloud apps Private infrastructure Private cloud apps Private infrastructure Growth Expectations for 2014 2014 Growth Reality Workloads migrated to private cloud 2014 has been a near total reversal of expectations for which workloads would be migrated to private cloud. Private Cloud Skills 9
  • 10. TBR TBR Quarterly Webinar Series | 7.31.14 | www.tbri.com | ©2014 Technology Business Research Inc. Public cloud data center build-outs are slowing, causing cloud components demand and growth opportunities to shift As public cloud service providers satisfy their base-layer IT infrastructure requirements, incremental enterprise private cloud build-outs will lead cloud components revenue growth Private Cloud Skills 10 Rapid ODM-enabled data center build-outs Public cloud components Private cloud components Year-to-yearrevenuegrowth 2012 2018 We are just ahead of the inflection point in growth Accelerated migration by early adopters Incremental adoption growth  SOURCE: TBR ESTIMATES TBR
  • 11. TBR TBR Quarterly Webinar Series | 7.31.14 | www.tbri.com | ©2014 Technology Business Research Inc. Cloud Components Market With virtualized base-layer hardware in place, customers will shift focus to software-led efficiency and simplicity in 2015 $19.4B $27.5B $39.3B Operations management and security software will lead 2013 to 2018 growth due to the need to manage and secure hybrid clouds. Private Cloud Skills 11
  • 12. TBR TBR Quarterly Webinar Series | 7.31.14 | www.tbri.com | ©2014 Technology Business Research Inc. Key Takeaways: Point 3 Private clouds, combined with increasing management and integration capabilities, will enable the next step in cloud solution delivery Insert Picture Insert Picture Customization is the driving force behind the growth in private cloud opportunity. Multiple routes will exist for customers to create and consume more cloud-delivered integrated solutions. Skills are a barrier vendors will need to help customers overcome. 12
  • 13. TBR TBR Quarterly Webinar Series | 7.31.14 | www.tbri.com | ©2014 Technology Business Research Inc. Managed Self-built Solution Routes Pressure to weigh opportunity cost and time to market is driving more customers to LOB-driven managed private cloud deployments Global Private Cloud Market 70% of customers adopted 30% of customers adopted “I like having all of my marbles in my hands; with the cloud, I have handed all my marbles to someone else and said, ‘Please look after them, watch out for them.’” — Large enterprise self-built cloud customer • More LOB involvement • Less centralized purchasing • Higher IT control • More centralized purchasing “Say you can do [some function] through the cloud for a million dollars. And IT says, ‘Well, we can do it for $700,000.’ [The] payoff of that would be a no-brainer. But now it’ll take up to six months. What’s the opportunity cost of those five months? So, it drives a different analysis.” — IT Architecture, $10B+ Retail, U.S. 13
  • 14. TBR TBR Quarterly Webinar Series | 7.31.14 | www.tbri.com | ©2014 Technology Business Research Inc. Cloud Expenditures The pockets of growth in private cloud are shifting from infrastructure to more mission-critical development and application workloads Decreasing growth rates as initial infrastructure-focused spending loses momentum Rising importance as private development of environments and application replatforming assume greater importance The most investment-rich area that will gradually gain momentum in dollars spent; the rate of spending growth will hinge on customer success stories and winning approval for core application migrations. Solution Routes 14
  • 15. TBR TBR Quarterly Webinar Series | 7.31.14 | www.tbri.com | ©2014 Technology Business Research Inc. Customization Method: Brokerage and Integration The continuum of brokerage, integration and aggregation will be one of the strongest areas of cloud growth over the next 5 years Brokerage Integration • Aggregation (marketplaces) • Integration (of multiple cloud environments and services) • Customization (services-led) • Platforms (cloud or software) • API management • Catalogs and frameworks Solution Routes 15 SOURCE: TBR ESTIMATES TBR Integration and Aggregation Layer
  • 16. TBR TBR Quarterly Webinar Series | 7.31.14 | www.tbri.com | ©2014 Technology Business Research Inc. Private Cloud Webinar: Q&A Questions? 16
  • 17. TBR TBR Quarterly Webinar Series | 7.31.14 | www.tbri.com | ©2014 Technology Business Research Inc. Private Cloud Webinar: Contact Information James McIlroy Vice President of Sales Email: mcilroy@tbri.com Telephone: 603.929.1166 Twitter: @TBRinc SlideShare: www.slideshare.net/TBR_Market_Insight YouTube: www.youtube.com/user/TBRIChannel LinkedIn: www.linkedin.com/company/technology-business-research Allan Krans Cloud Practice Manager Email: allan.krans@tbri.com Twitter: @allankrans 17
  • 18. TBR TBR Quarterly Webinar Series | 7.31.14 | www.tbri.com | ©2014 Technology Business Research Inc. TBR Cloud Research Overview Continual portfolio expansion elevates TBR’s and clients’ knowledge of what ‘cloud’ means to vendors and customers Accenture CSC Rackspace AWS Dell ServiceNow Atos Fujitsu TCS Cognizant IBM Verizon Capgemini Microsoft Deloitte Oracle Google SAP HP Wipro Infosys Salesforce.com Workday Hybrid Cloud Customer Report Private Cloud Customer Report Cloud Professional Services Customer Report Topical Cloud Reports: 2014 reports include Orchestration, and LOB vs. IT Public Cloud Benchmark Managed Private & Professional Services Cloud Benchmark Cloud Components Benchmark 18
  • 19. TBR TBR Quarterly Webinar Series | 7.31.14 | www.tbri.com | ©2014 Technology Business Research Inc. Cloud Vendor Reports (Cloud Business Quarterly) Benchmarks (Benchmark XLS data is also available) • Accenture Cloud* • Amazon Web Services* • Atos Cloud* • Capgemini Cloud* • Cognizant Cloud* • CSC Cloud* • Dell Cloud* • Deloitte Cloud* • Fujitsu Cloud* • Google Cloud* • HP Cloud* • IBM Cloud* • Infosys Cloud* • Microsoft Cloud* • Oracle Cloud* • Rackspace* • Salesforce.com • SAP Cloud* • ServiceNow* • TCS Cloud* • Verizon Cloud* • Wipro Cloud* • Workday Public Cloud Benchmark The public cloud program compares and analyzes the strategies, results and drivers of 50 key vendors in the public cloud segment across Software as a Service, Platform as a Service and Infrastructure as a Service. Managed Private & Professional Services Cloud Benchmark* The managed private cloud and professional services program compares and analyzes the strategies, results and drivers of 29 key vendors in the managed private cloud and professional services market across Business Process as a Service, Software as a Service, Platform as a Service, Infrastructure as a Service, cloud consulting, cloud SI and cloud ADM. Cloud Components Benchmark* The cloud components program compares and analyzes the strategies, results and drivers of 12 key vendors that sell the building blocks of software and hardware used to construct public and private clouds. Note: There are also three semiannual cloud adoption studies and cloud topic reports (Cloud Security is available now and Cloud Orchestration is upcoming). Syndicated Research Coverage TBR Cloud Practice Syndicated Coverage *Semiannual Report 19
  • 20. TBRT ECH N O LO G Y B U SIN ESS RESEARCH , IN C. About TBR Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, telecom and enterprise network vendors, and operators. Serving a global clientele, TBR provides timely and actionable market research and business intelligence in formats that are tailored to clients’ needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis. TBR has been empowering corporate decision makers since 1996. To learn how our analysts can address your unique business needs, please visit our website or contact us today. Contact Us 1.603.929.1166 info@tbri.com www.tbri.com 11 Merrill Drive Hampton, NH 03842 USA This report is based on information made available to the public by the vendor and other public sources. No representation is made that this information is accurate or complete. Technology Business Research will not be held liable or responsible for any decisions that are made based on this information. The information contained in this report and all other TBR products is not and should not be construed to be investment advice. TBR does not make any recommendations or provide any advice regarding the value, purchase, sale or retention of securities. This report is copyright-protected and supplied for the sole use of the recipient. Contact ©Technology Business Research, Inc. for permission to reproduce.