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Forrester: Market Overview of Current Cloud Service Offerings from Global IT Providers
 

Forrester: Market Overview of Current Cloud Service Offerings from Global IT Providers

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Compared to traditional enterprise IT services, a new family of services is emerging that are more standardized, scalable, and billed based on consumption. Known as cloud-based IT services, ,there are ...

Compared to traditional enterprise IT services, a new family of services is emerging that are more standardized, scalable, and billed based on consumption. Known as cloud-based IT services, ,there are new signs that this sourcing model is moving beyond the marketing hype and will expand into the broader enterprise market.

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    Forrester: Market Overview of Current Cloud Service Offerings from Global IT Providers Forrester: Market Overview of Current Cloud Service Offerings from Global IT Providers Document Transcript

    • June 9, 2009 Market Overview Of Current Cloud Service Offerings From Global IT Providers by Paul Roehrig, Ph.D. for Sourcing & Vendor Management Professionals Making Leaders Successful Every Day
    • For Sourcing & Vendor Management Professionals June 9, 2009 Market Overview Of Current Cloud Service Offerings From Global IT Providers This is the first document in the “Cloud IT Services Market Overview — Real Enterprise Value Or Just Vapor?” series. by Paul Roehrig, Ph.D. with Christine Ferrusi Ross, James Staten, Philipp Karcher, and antonin Shanahan ExECuT I V E S u M Ma Ry Compared to traditional enterprise IT services, a new family of services is emerging that are more standardized, scalable, and billed based on consumption. Known as cloud-based IT services, ,there are new signs that this sourcing model is moving beyond the marketing hype and will expand into the broader enterprise market. Forrester believes that this will be a game-changing, disruptive shift for some enterprise clients — and perhaps even the overall outsourcing industry. The cloud services hype, questions from within IT client organizations, and the push from service providers (many of which have vastly different current offerings and strategies) put IT sourcing professionals in a tough spot trying to decipher what “it” is and what it means to their firms. Forrester surveyed 11 major global IT service providers to get an overview of the status and strategies of some key established IT services firms in this space and to begin to answer questions for IT services decision-makers about which firms and strategies might be a good match (now and in the future). Tabl E O F CO n TE n TS n OT E S & RE S O u RCE S 2 Economics And The Changing Role Of Forrester surveyed 11 service provider Technology Drive Cloud Services Interest companies, including accenture, atos Origin, Economic Pressures accelerate Enterprise Capgemini, Cognizant Technology Solutions, Interest In Cloud Services CSC, Dell, HP, IbM, Siemens IT Solutions and 7 IT Service Providers Are Well Positioned To Services, Tata Consultancy Services, and wipro. Enable Cloud Services Related Research Documents IT Providers are beginning To Enable and “Should your Email live In The Cloud? a Deliver SaaS and IaaS Services Comparative Cost analysis” RECOMMEnDaTIOnS January 5, 2009 13 Balance Current Provider Capabilities With “Future View: The new Tech Ecosystems Of Cloud, Your Long-Term Requirements Cloud Services, and Cloud Computing” alTERnaTIVE VIEw august 28, 2008 13 Enterprise Cloud Services May Not Live Up To The Hype “Is Cloud Computing Ready For The Enterprise?” 14 Supplemental Material March 7, 2008 © 2009, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please email clientsupport@forrester.com. For additional information, go to www.forrester.com.
    • 2 Market Overview Of Current Cloud Service Offerings From Global IT Providers For Sourcing & Vendor Management Professionals ECONOMICS AND THE CHANgINg ROLE Of TECHNOLOgY DRIvE CLOUD SERvICES INTEREST A mountain of blogs, whitepapers, and slide decks are either proselytizing or condemning anything- as-a-service or cloud-based whatever. But what this means today is anything but clear. Forrester has defined cloud computing as: A form of standardized IT-based capability — such as Internet-based services, software, or IT infrastructure — offered by a service provider that is accessible via Internet protocols from any computer, is always available and scales automatically to adjust to demand, is either pay-per-use or advertising-based, has Web- or programmatic-based control interfaces, and enables full customer self-service.1 Because this is an emerging services technology, some core characteristics — standardized, billing based on consumption, scalability, and access — can help define what the cloud services model means for enterprise clients (see Figure 1). figure 1 Some Key Characteristics Of a Cloud Services Model Cloud service characteristics Details Standardized • Cloud services are based on a level of standardization for technology components. IT-based capability • The underlying logic is that a significant amount of IT client demand has more similarities than differences, and this is key to economies of scale for many common technology requirements (processing power, storage, core applications, development platforms, etc.). Consumption • Most cloud services models charge by actual use of the resources in CPU hours, billing gigabits (Gbs) consumed, gigabits per second (Gbps) transferred, email accounts, etc., rather than only by number of servers, tickets, or authorized users. • The pay-for-play economics, often with shorter contract durations, can be very attractive to clients. Scalable • Scalability and resilience are key design components of cloud services. • More of the delivery cost risk is on the service provider, but clients have more flexibility (within reasonable commercial limits) for increasing and decreasing demand while continuing to pay only for what is used (along with provider margins and some delivery cost spread across all clients). Web-based • Many cloud services use a standard Web browser to control demand and implement accessibility and services without any unusual software add-ons or specific OS requirements. flexibility • Clients can provision and manage services without significant involvement by the provider. 54681 Source: Forrester Research, Inc. June 9, 2009 © 2009, Forrester Research, Inc. Reproduction Prohibited
    • Market Overview Of Current Cloud Service Offerings From Global IT Providers 3 For Sourcing & Vendor Management Professionals Over the past few years, several providers have claimed utility or on-demand service capability, but in most cases the core service delivery processes have not changed. True cloud service offerings aren’t just “plugging stuff in when clients ask for it.” Cloud IT services are much more akin to a real utility offering and that requires some latent capacity that is relatively easily turned on and off. Consider your mobile phone as an example. Purists will claim that it’s an oversimplification, but each individual service — voice, text messaging, roaming, Web access, and even the appliance — is standardized and scalable (within limits). And you also have consumption billing (usually as minutes or some data transfer volumetric) with a time-based contract and you can make changes to your plan via the Web.2 Now imagine this same model for your enterprise technology environment. In a cloud services model, nearly everything can be converted to a “service.” Web services, individual software applications (as software-as-a-service [SaaS]), platforms for application development (PaaS), and centralized or distributed computing power (as infrastructure-as-a-service [IaaS]) are all reconstituted as easily scalable services with consumption-based pricing. There are several general types of cloud services, described below using some commonly recognized examples. · Web-based service offerings. These solutions include rich Internet applications — many of which are delivered via the Web — similar to Flickr, Microsoft Office Live, MySpace.com, Zillow, and so on. Although included here in the interest of clarity, most service IT providers are not in the business of providing Web-based services, but many are aligning to help clients implement these offerings. · Software-as-a-service offerings. SaaS services include complete applications that can be customized by clients and delivered over the Internet such as salesforce.com, Gmail, and enterprise applications delivered as a service. After several years of maturation, SaaS is not “new” — and some definitions of cloud computing don’t even include SaaS — but what is interesting is that major IT service providers are taking more steps to help clients implement their own SaaS offering, and in some cases providers are beginning to offer their own SaaS products. · Software platform-as-a-service offerings. PaaS offerings are externally hosted services providing complete platforms to create, run, and operate applications, including development tools, administration and management tools, runtime engine(s), data management engine(s), security facilities, and user-management services. These services include offerings such as Google App Engine and Force.com.3 · Infrastructure-as-a-service. IaaS includes both full infrastructures on which clients can deploy applications (like Amazon Elastic Compute Cloud) as well as separate infrastructure services (e.g., virtual computing capacity, virtualized hosting, utility storage, etc.). © 2009, Forrester Research, Inc. Reproduction Prohibited June 9, 2009
    • 4 Market Overview Of Current Cloud Service Offerings From Global IT Providers For Sourcing & Vendor Management Professionals Economic Pressures Accelerate Enterprise Interest In Cloud Services Frictionless, efficient, commoditized centralized computing power has been the nirvana-like target since the UNIVAC, but it’s remained an elusive goal. Until recently, most cloud offerings have been delivered to midsize businesses or as smaller niche offerings into larger enterprises, but this is starting to change as some enterprise IT services clients are beginning to show interest in the advantages offered by cloud services delivery models.4 Based on client interest expressed to Forrester and recent survey data, there is clearly a growing desire by enterprise decision-makers to learn more about this potentially disruptive services model (see Figure 2).5 So what is motivating the growing interest in cloud services by enterprise IT decision-makers? As with many things in business, economics is one of the key drivers. · IT dilettantes squander resources. For decades now almost all public and private IT decision- makers have had to make IT work on its own by building up complex and expensive IT shops. The result is that many firms have become IT dilettantes, with huge amounts of capital and hordes of people dedicated to IT work that fails to drive equity generation, mission achievement, or brand differentiation. Current global economic pressures are forcing decision-makers to re- examine the ROI of outsourcing and disruptive technologies like cloud services.6 · Cloud services have a compelling value proposition over traditional outsourcing. Cloud services cost less than traditional outsourced services — in some cases a lot less. According to the providers surveyed, the amount of savings depends on the type of service offered, but a general rule of thumb is between 20% and 50%. Some providers claim savings even higher — up to 70% or even 80% in some cases. June 9, 2009 © 2009, Forrester Research, Inc. Reproduction Prohibited
    • Market Overview Of Current Cloud Service Offerings From Global IT Providers 5 For Sourcing & Vendor Management Professionals figure 2 Growing Enterprise Interest In Cloud Services 2-1 Interest in SaaS models is growing in global companies “What are your firm’s plans to implement or expand your use of software-as-a-service (SaaS) in the next 12 months?” Interested/considering 22% 30% Piloting 10% 8% Implementing/implemented 10% 6% Organization size: Expand/upgrade existing Very large* 5% (5,000-19,000 employees) implementation 6% Global 2000† Decreasing 1% (20,000 or more employees) 3% Removing 0% 1% Not interested/don’t know 52% 45% *Base: 150 enterprise software decision-makers at very large companies † Base: 86 enterprise software decision-makers at Global 2000 companies 2-2 Enterprise clients show strong interest in platform-as-a-service “What are your firm’s plans to implement or expand its use of platform- as-a-service/cloud computing platforms in the next 12 months?” Interested/considering 30% 21% Piloting 12% 16% Implementing/implemented 9% 16% Organization size: Expand/upgrade existing Very large‡ 5% (5,000-19,000 employees) implementation 9% Global 2000§ Decreasing 1% (20,000 or more employees) 0% Removing 0% 0% Not interested/don’t know 43% 38% ‡ Base: 378 enterprise software decision-makers at very large companies Base: 267 enterprise software decision-makers at Global 2000 companies § Source: Enterprise And SMB Software Survey, North America And Europe, Q4 2008 54681 Source: Forrester Research, Inc. © 2009, Forrester Research, Inc. Reproduction Prohibited June 9, 2009
    • 6 Market Overview Of Current Cloud Service Offerings From Global IT Providers For Sourcing & Vendor Management Professionals figure 2 Growing Enterprise Interest In Cloud Services (Cont.) 2-3 IT clients show growing interest in internal cloud services “What is your company’s highest level of awareness or interest in building and operating an internal “cloud” or pool of pay-per-use virtual servers?” Already implemented 4% Implementing in the next 12 months 4% Interested and planning budget for it 13% Interested but no budget for it 23% Not interested 33% Not aware (includes “don’t know”) 23% Base: 962 hardware decision-makers at North American and European enterprises 2-4 Many firms planning budget for external cloud providers “What is your company’s highest level of awareness or interest in pay-per-use hosting of virtual servers (also known as cloud computing) at service providers such as Amazon Web Services, Savvis, or Mosso?” Already implemented 5% Implementing in the next 12 months 3% Interested and planning budget for it 17% Interested but no budget for it 21% Not interested 34% Not aware (includes “don’t know”) 20% Base: 962 hardware decision-makers at North American and European enterprises Source: Enterprise And SMB Hardware Survey, North America And Europe, Q3 2008 54681 Source: Forrester Research, Inc. June 9, 2009 © 2009, Forrester Research, Inc. Reproduction Prohibited
    • Market Overview Of Current Cloud Service Offerings From Global IT Providers 7 For Sourcing & Vendor Management Professionals IT SERvICE PROvIDERS ARE WELL POSITIONED TO ENABLE CLOUD SERvICES Given the pressures of the modern economy, more and more firms are looking for disruptive ways to cut costs and increase efficiencies. Many IT services decision-makers are already turning to outsourcing service providers — many of whom are already trusted providers — for help figuring out the economic and operations impact of cloud or utility-based services. Because of their existing capabilities, levels of investment, and client relationships, many major IT providers are positioning to move more aggressively into the cloud services business, and most already have a few cloud service offerings. · Software-as-a-service is the most common offering by providers. Although the capabilities vary widely, most of the major providers profiled in this document have some mature offerings in the SaaS space. Most providers offer project and consulting support for end user clients who want to either develop their own SaaS offering or manage SaaS delivery into their firms. Other providers are now delivering industry-specific SaaS capabilities. · Providers enable, but generally don’t deliver, software platform-as-a-service. Most of the IT service providers don’t really play in this space — IBM is the big exception, and Wipro is moving fast in this space — but many firms do offer consulting and development support to help clients leverage platforms provided by other firms. · Infrastructure-as-a-service. Most of the IT providers profiled below either have existing IaaS offerings or are well on the way to developing as-a-service offerings for processing, storage, backup, networking, desktop, and so on. IT Providers Are Beginning To Enable And Deliver SaaS And IaaS Services It is still early days for real enterprise-level commercial cloud services offerings by IT providers. Most providers have only a handful of offerings to enable cloud services for clients or to directly deliver services. Clients also need to be skeptical about some claims made by providers about cloud services. There are critical differences between managed services repackaged as cloud offerings and true scalable, flexible, easily accessible, utility services. Differentiating between marketing slideware and reality for clients is difficult — particularly because this is an emerging capability — but there are some things that clients can assess to help understand provider’s current capabilities. · Differentiate between enabling and delivering cloud services. Most of the providers Forrester reviewed either enable cloud services for clients via consulting, deliver cloud services (which can include aggregating services from other providers), or both. Clients should be clear about whether a particular service provider is implementing, managing, or delivering the services provided by external cloud providers or their own internal capability. © 2009, Forrester Research, Inc. Reproduction Prohibited June 9, 2009
    • 8 Market Overview Of Current Cloud Service Offerings From Global IT Providers For Sourcing & Vendor Management Professionals · Demonstrate latent capacity. Every true utility has some latent capacity. If you plug a new appliance into your home, the expectation is that there is almost always enough electrical power to make it work. It’s now the same with salesforce.com or Amazon Elastic Compute, and providers should be able to demonstrate at least some level of latent capacity if they are claiming they can deliver — not just enable — cloud services. · Demonstrate a commercial client base. This is a relatively new business space for the big IT service providers, so most of them have dozens — rather than hundreds — of clients. Some providers are a bit too enthusiastic about claiming that internally used capabilities are equivalent to commercially offered enterprise services, but there is real evidence of a growing install base of commercial clients. The service providers that we review here claim some significant differences in their current cloud services offerings for enterprise clients (see Figure 3). Although cloud-based services have yet to gain as much traction as traditional models for enterprise clients, these offerings are resonating with early-adopter clients and may be starting to disseminate into the early majority of clients (see Figure 4). June 9, 2009 © 2009, Forrester Research, Inc. Reproduction Prohibited
    • Market Overview Of Current Cloud Service Offerings From Global IT Providers 9 For Sourcing & Vendor Management Professionals figure 3 Current Enterprise Cloud Services Figure 3 Current Enterprise Cloud Services Service provider Software-as-a-service Infrastructure-as-a-service Accenture • Working on early applications and services • No mature IaaS offerings in place. for Windows Azure. • Offers some data center solutions that are • Provides consulting and SI services to help critical for cloud computing and IT service clients develop and implement third-party delivery. SaaS services. • Supports migration to cloud services (to • Some specific SaaS offerings such as internal and external cloud services), and Navitaire to provide enterprise SaaS ongoing service provisioning and applications for the travel and management (including servers, storage, transportation industry. and applications). • Accenture and Avanade (Accenture’s joint venture with Microsoft) have an agreement with Microsoft to offer IT services for the Microsoft Business Productivity Suite. • Partnering with salesforce.com and Workday to delivery additional SaaS offerings. Atos Origin • Offers a number of its services to the • Offers IaaS offerings to some clients as a European payments market, including CRM supplement to traditional service offerings. and other eServices, as SaaS solutions for • Bundles IaaS solutions as part of application enterprise clients. hosting and management service, or as the • Has a SaaS offering for the SMB market — back end to a desktop service. called Atos-in-a-Box — that includes • Most of the firm’s cloud offerings are Web-based email, workplace services and currently in the IaaS space (particularly collaboration, as well as CRM and ERP storage on demand in Europe). applications. • SaaS offering to the Dutch public sector. • Actively partnering with other firms to develop and implement SaaS offerings such as a business-to-business integration offering with software provider Axway. Capgemini Rather than generating specific SaaS While it does not directly own an IaaS offering, offerings, Capgemini is leveraging its Capgemini has taken the role of partner strength as a consulting and SI firm and and systems integrator for Amazon Web positioning itself as the delivery engine for Services. Google’s messaging, collaboration, security, and archive solutions. Cognizant Cognizant does not offer SaaS services to Cognizant does not offer IaaS services to clients. clients. CSC • Working closely with Force.com, Google App Virtual Desktop and Dynamic Server are two Engine, Amazon Web Services, and other offerings available today that provide clients cloud providers to help clients implement with storage-, compute-, and desktop-as-a- their own cloud-based solutions. service. • Has a practice — including a Vietnam delivery center — dedicated to enabling SaaS offerings for other firms. • Current services for financial services clients offered in a SaaS model. 54681 Source: Forrester Research, Inc. © 2009, Forrester Research, Inc. Reproduction Prohibited June 9, 2009
    • 10 Market Overview Of Current Cloud Service Offerings From Global IT Providers For Sourcing & Vendor Management Professionals figure 3 Current Enterprise Cloud Services (Cont.) Service provider Software-as-a-service Infrastructure-as-a-service Dell • Builds SaaS functionality into many services • Technology foundation for other public and offerings for enterprise clients including private cloud providers via its Data Center device management, data center Solutions (DCS) group to help clients create management, managed storage, and private cloud facilities. disaster recovery. • Customers include Microsoft, Facebook, • IP developed organically and via Lawrence Livermore National Labs, and acquisitions (MessageOne, Silverback, others. Everdream, and ASAP). • Dell also delivers some cloud IaaS services via its MessageOne offerings including data storage, mail and messaging, archiving, and disaster recovery services. HP/EDS • SaaS-enabled business process outsourcing • Offers Adaptive Infrastructure as a Service services for processes such as billing and (AIS) to a small install base of clients. clearing services, card processing services, • AIS provides access to IT as a service on a credit services, etc. subscription basis and is delivered based • Provides Cloud Assure, a SaaS offering heavily on automated processes and designed to help IT organizations monitor procedures running in HP’s “next-generation” the security and performance of cloud data centers. services. IBM • Partnering with Amazon Web Services to • In the early stages of trying to create a true help clients create SaaS offerings. infrastructure utility to clients. • Delivering SaaS applications directly to end • Offering a dedicated environment customers (including offerings for Lotus (including a choice of data center, servers, applications and security/compliance). storage, and network). • Providing consulting support to help SaaS • Also offering a more variable use model on provider firms design, build, deliver, and IBM’s dedicated Computing on Demand market their own SaaS offerings (including infrastructure (nearly 15,000 CPUs in supporting 3,000 SaaS partners to build and New York, London, and Tokyo). deliver their own SaaS offerings). • Has a cloud storage offering (scale out file • Enabling end user clients to integrate or services). build proprietary SaaS/cloud services into • Among the few major IT service providers to their businesses (including separate move into the PaaS space for clients. practices for salesforce.com and SuccessFactors). Siemens IT • Has a SaaS solution for networked device • Offers virtual enterprise computing that runs Solutions monitoring for clients that want to remotely on its global network of automated data and maintain networked devices (including centers. Services non-IT elements such as a turbine or • Has a managed server utility offering that is computer tomograph). billed based on consumption, and it has a • Has several SaaS offerings (e.g., global consumption-based managed storage document management, an SAP solution for offering. business travel reservations, multiple Microsoft-based offerings that enable collaboration, workflow management, and communication). 54681 Source: Forrester Research, Inc. June 9, 2009 © 2009, Forrester Research, Inc. Reproduction Prohibited
    • Market Overview Of Current Cloud Service Offerings From Global IT Providers 11 For Sourcing & Vendor Management Professionals figure 3 Current Enterprise Cloud Services (Cont.) Service provider Software-as-a-service Infrastructure-as-a-service TCS • Targeting SaaS offerings at small and Does not have a commoditized commercial medium-size business in five verticals standalone IaaS offering (but is exploring (manufacturing, retail, healthcare, education, some services with a few clients). and professional services). • Current SaaS solutions consist of Web-based shared services including CRM, finance and accounting, several HR functions, and some end user productivity applications. Wipro • Delivers application development and Still building out an IaaS service offering management services associated with (but services now developed to manage third-party PaaS platforms such as Force.com virtualization technologies, provide and Microsoft Azure. self-service/on-demand pro-visioning, and • Has a custom platform for SaaS enablement automated workload management). and delivering the SaaS service. • Current SaaS offerings include messaging and collaboration, document management, mortgage processing, and claims management. • Provides consulting, implementation, and support services on enterprise cloud strategy. 54681 Source: Forrester Research, Inc. © 2009, Forrester Research, Inc. Reproduction Prohibited June 9, 2009
    • 12 Market Overview Of Current Cloud Service Offerings From Global IT Providers For Sourcing & Vendor Management Professionals figure 4 Existing Cloud Services Client Profiles Service provider Existing client profile Accenture • Worked with more than 70 clients, implementing more than 125+ SaaS projects delivered in a variety of industry segments and in several functional areas — including sales, marketing, human resources, etc. • Accenture and Avanade are working with clients such as Aviva, Royal Mail, Payless Shoes, and W.H. Smith to implement Microsoft Business Productivity Online Suite. • Navitaire, a wholly owned subsidiary of Accenture, provides enterprise SaaS applications for the travel and transportation industry. • Offers tools and other assets to help clients’ IaaS services but does not have existing clients in this space. Atos Origin • Atos Worldline Transaction as a Service manages 20 billion transactions a year for 300 major accounts and 100,000 midsize companies. • Has 72 SMB clients of workplace services and 30 customers of services such as Oracle and SAP Adaptive services. • Multiple enterprise IaaS clients; storage on demand has about 80 corporate customers; 20 enterprise clients receive utility-based computing. Capgemini Did not provide client information. Cognizant Cognizant does not have a current cloud services client base. CSC • CSC has hundreds of software-as-a-service clients, many of whom receive financial services solutions. • Hundreds of Infrastructure-as-a-service clients are receiving desktop-as-a-service, testing-as-a- service, storage-/compute-as-a-service, etc. Dell • About 5,000 clients are receiving SaaS services such as distributed device management, data center management, storage, and business continuity/disaster recovery. • About 50 clients are now receiving IaaS services. HP/EDS • HP does not disclose specific customer client information, but claims that its SaaS business is considered to be one of the top 10 in the world based on revenue. • A few clients are now piloting some IaaS offerings. IBM IBM has more than 3,000 SaaS independent software vendor clients. It also has multiple specialty partner application areas such as BPM, compliance, asset management and CRM, each with several dozen clients. Siemens IT • About 120 clients are receiving SaaS services now, primarily SharePoint and messaging Solutions services. About 100 of those clients are leveraging a document management SaaS service. and • Three clients are receiving virtualized computing capacity, virtualized hosting, and utility Services storage. TCS Piloting an IT-as-a-service offering with some clients. Wipro • About 46 clients are receiving salesforce.com implementation and business process solution such as document management, carbon management, and claims management. • About 20 clients are receiving Infrastructure-as-a-service solutions (primarily enablement) support. 54681 Source: Forrester Research, Inc. June 9, 2009 © 2009, Forrester Research, Inc. Reproduction Prohibited
    • Market Overview Of Current Cloud Service Offerings From Global IT Providers 13 For Sourcing & Vendor Management Professionals R E C O M M E n D aT I O n S BALANCE CURRENT PROvIDER CAPABILITIES WITH YOUR LONg-TERM REqUIREMENTS Forrester believes that implementing some aspects of cloud services in the enterprise is not so much a question of “if” but rather “when.”7 IT sourcing teams should start thinking about cloud options now, particularly in selecting providers for the long haul. · Don’t consider cloud services as all-or-nothing. Even if the full enterprise may not be ready for cloud services (or vice versa), clever enterprise decision-makers will start exploring service options now and consider cloud utility services for parts of the organization where they make the most business sense. This will help build a foundation for the future.8 · Evaluate partnership ecosystems (and pay attention to Microsoft). Size matters when building out true commodity services — and IbM stands out in this regard. but mass alone is not enough, and providers are all working to build technical and business alliances to mature their offerings. Clients should assess provider partner strategies when making sourcing decisions. One key alliance partner is — and should be — Microsoft. Enabling cloud services requires software to make it work, and Microsoft has been aggressively creating IP and tools that will likely be necessary to make cloud services a scalable reality. · Keep your attention on traditional outsourcing models. Cloud services delivered by IT service providers are certainly not magic bullets for enterprise clients. Issues of technology maturity, security, legacy systems, licensing, data ownership, and weak or absent standards are still significant today. Rapid changes in this space mean that IT services clients should consider cloud options now and in the future, but traditional service models will remain. a lT E R n aT I V E V I E w ENTERPRISE CLOUD SERvICES MAY NOT LIvE UP TO THE HYPE The road to lasting success is littered with firms that bet heavily on the “next big Thing” that ultimately fizzled. If the economic context shifts drastically, or technology hurdles remain unresolved (e.g., security, licensing issues, and standards), clients will vote against cloud services with their investments. Enterprise-level cloud services could continue single-digit growth, be dropped as a core strategy by many IT service providers, and remain a niche offering for a few firms. IT clients will end up wishing they had focused on improving tradition sourcing processes and management structures. Providers that avoided significant investment in cloud services will have freed up assets to focus on honing more traditional sourcing strategies and service offerings. © 2009, Forrester Research, Inc. Reproduction Prohibited June 9, 2009
    • 14 Market Overview Of Current Cloud Service Offerings From Global IT Providers For Sourcing & Vendor Management Professionals SUPPLEMENTAL MATERIAL Companies Interviewed for This Document Accenture HP Atos Origin IBM Capgemini Siemens IT Solutions and Services Cognizant Technology Solutions Tata Consultancy Services CSC Wipro Dell ENDNOTES 1 Many market observers have offered up definitions of cloud and cloud computing — to no avail. Every party wants to adapt the definition to their own needs. But it is possible to describe the scope of things referred to as cloud and offer a useful segmentation of them. See the August 28, 2008, “Future View: The New Tech Ecosystems Of Cloud, Cloud Services, And Cloud Computing” report. 2 CFOs will be interested in the pay-as-you-go economics of cloud computing because it can help keep cash in the bank longer and be more closely aligned to actual demand — so less overpaying. See the October 29, 2008, “Talking To Your CFO About Cloud Computing” report. 3 The term “PaaS” describes many different approaches, each of which has a particular “sweet spot” among application scenarios. For example, some firms deliver software components over the Internet that cloud services developers can integrate via service-oriented architectures (SOAs), but these are not complete development platforms. BigTable, Simple Queueing Service, and GoogleCheckOut are all examples. See the February 10, 2009, “Platform-As-A-Service Is Here; Can It Help You?” report. 4 Forrester believes that for a service to be ready for enterprises to consume, it must pass from the early- adopter phase (few enterprises are using it, and most deployments are experimentation and non-business- critical projects) to early majority. Evidence of being at this stage comes from a sufficient volume of direct enterprise customer references using the service for business-critical purposes, indicating that the service has matured to the point of consideration for IT approval. See the March 7, 2008, “Is Cloud Computing Ready For The Enterprise?” report. 5 “Cloud services” may be all the rage as a blog topic, but it’s still not on the radar for most enterprise IT clients. The primary inquiry topics have been: 1) What is cloud computing? 2) How and when should we use cloud offerings? Can we build our own?; and 3) How big will cloud be and what are the emerging strategies? See the August 28, 2008, “Inquiry Insights: Cloud Computing, Q3 2008” report. 6 Since the late 1990s, technology-enabled work has been woven into the fabric of global commerce. In trying to adapt, far too many firms have become IT dilettantes, with huge amounts of capital and hordes of people dedicated to IT work that fails to drive equity generation, mission achievement, or brand differentiation. June 9, 2009 © 2009, Forrester Research, Inc. Reproduction Prohibited
    • Market Overview Of Current Cloud Service Offerings From Global IT Providers 15 For Sourcing & Vendor Management Professionals Staying in the low-value IT transaction business without good reason is perhaps the biggest waste of time and resources since the invention of solitaire. See the October 9, 2008, “New Market Pressures Will Drive Next-Generation IT Services Outsourcing” report. 7 While degrees of scalability, availability, disaster recovery, monitoring, and compliance are still open issues on many clouds, the core basis of these infrastructures has been addressed. And as more enterprises leverage clouds, IT infrastructure and operations professionals are telling the cloud platform providers what remaining issues need to be addressed to garner more of their business, which is hardening and maturing the cloud platforms rapidly. See the December 10, 2008, “Should Your Windows Apps Move To The Cloud?” report. 8 Many industry participants, including Forrester, have advocated one ideal IT infrastructure architecture that every enterprise should work toward, but this won’t be a reality any time soon. See the December 24, 2007, “There Are Three IT Architectures, Not One” report. © 2009, Forrester Research, Inc. Reproduction Prohibited June 9, 2009
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