Randy Bias - Presentation at Emerging Communications Conference & Awards (eComm 2011)

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  • 1. The Public Cloud Has Won Web-scale clouds are happening now ... don’t be left in the coldRandy Bias @randybiasJun 27th, 2011 @cloudscalingeComm - SFO
  • 2. MobileMatters
  • 3. Mobile Apps ExplodingSources: Asymco.com, Chetan Sharma, Morgan Stanley
  • 4. Mobile + Cloud
  • 5. Two Sides of the Same CoinConsumption Production
  • 6. Two Sides of the Same CoinConsumption Production
  • 7. Carriers KnowMobile
  • 8. Carrier Advantages
  • 9. Carrier Advantages IP backbone
  • 10. Carrier Advantages IP backboneWireless network
  • 11. Carrier Advantages IP backbone Wireless networkCO & DC footprint
  • 12. Carrier Advantages IP backbone Wireless networkCO & DC footprint Mobile/IP CDN
  • 13. Carrier Advantages IP backbone Wireless network CO & DC footprint Mobile/IP CDNIn-country expertise
  • 14. Carrier Advantages IP backbone Wireless network CO & DC footprint Mobile/IP CDN In-country expertiseBilling/micro-payments
  • 15. CarriersDon’t Know Cloud
  • 16. First Gen Carrier Clouds
  • 17. First Gen Carrier Clouds“Enterprise” not “web-scale”
  • 18. First Gen Carrier Clouds“Enterprise” not “web-scale” Expensive & Complex
  • 19. First Gen Carrier Clouds“Enterprise” not “web-scale” Expensive & Complex NOT Agile
  • 20. First Gen Carrier Clouds“Enterprise” not “web-scale” Expensive & Complex NOT Agile Focus on IT buyer
  • 21. First Gen Carrier Clouds“Enterprise” not “web-scale” Expensive & Complex NOT Agile Focus on IT buyer Virtualization 2.0, not cloud
  • 22. First Gen Carrier Clouds“Enterprise” not “web-scale” Expensive & Complex NOT Agile Focus on IT buyer Virtualization 2.0, not cloud Bottom Line Focus
  • 23. First Gen Carrier Clouds“Enterprise” not “web-scale” Expensive & Complex NOT Agile Focus on IT buyer Virtualization 2.0, not cloud Bottom Line Focus Looking back, not forward
  • 24. Cloud Value Prop
  • 25. Which Value Prop Matters?Bottom line Top line revenue vs.cost savings generation
  • 26. Which Value Prop Matters?Bottom line Top line revenue vs.cost savings generation ASP vs. SaaS
  • 27. Web-scale Clouds
  • 28. Web-scale Cloud Pioneers
  • 29. Web-scale vs. Legacy App Focus vs.Greenfield & Legacy AppsMobile Apps
  • 30. Enterprises use Web-scale Clouds for Greenfield & Mobile Apps
  • 31. Enterprise Mobile Apps
  • 32. Estimated IaaS Growth Rates Web-scale vs. Legacy Cloud 88%90%68%45%23% 20% 0% Web-scale LegacySource: Cloudscaling market analysis
  • 33. Bookseller in Top 10 IT services by 2016? 1 IBM $37,347 2 HP $34,678 3 Fujitsu $26,935 4 CSC $16,281 5 Accenture $15,555 6 Capgemini $11,255 7 Hitachi $11,050 8 Ericsson $11,031 9 AWS $10,465 10 NTT Data Corporation $10,425 Source: servicestop100.org - 2010 top 100 IT services businesses by service revenue
  • 34. Comparing Clouds
  • 35. Capital Expense (Initial) Web-scale vs. Legacy Cloud $4,000Cost per Sellable $3,216‘VMU’ $3,000(m1.small, 1.7GB $2,000RAM, 1 vCore) $1,000 Web-scale $382 Legacy $0 Source: Cloudscaling confidential financial models for IaaS clouds
  • 36. Operational Expense (Labor) Web-scale (1500:1) vs. Legacy (300:1) Servers : IT Headcount $150M $113M $75M $38M $0MYear 1 Year 2 Year 3 Year 4 Year 5 Web-scale Legacy Source: Cloudscaling estimates of VM:admin based on known IaaS deployments
  • 37. Legacy 5-yr TCO is 3-5xmore than Web-scale ...
  • 38. ... doesn’t provide 3-5x value for greenfield or mobile apps
  • 39. Legacy Clouds Reduce TAM AppDevelopers Long Tail of Customers SMB In-country EnterprisesEnterprise In-country Global
  • 40. Legacy Clouds Reduce TAM App Developers $ Long Tail of Customers SMB In-country Enterprises Enterprise$$$$$In-country Global
  • 41. MobileApps onClouds
  • 42. 250M+ Users, 25M DAUPublic AWS for launch, dev, scaling, & testPrivate web-scale “Z-Cloud” for base
  • 43. Studio Model
  • 44. Studio ModelNo way to predict winners
  • 45. Studio ModelNo way to predict winnersBuild 10: 3 win, 3 fail, and 4 languish
  • 46. Studio ModelNo way to predict winnersBuild 10: 3 win, 3 fail, and 4 languishModel: Launch,Measure,Triage
  • 47. Studio ModelNo way to predict winnersBuild 10: 3 win, 3 fail, and 4 languishModel: Launch,Measure,TriageOptimize costs before, during, & after
  • 48. Own the Base, Rent the Spike 1 Launch & Measure TrafficApp Workload Sources: Graphics from Everest Group, Inc.
  • 49. Own the Base, Rent the Spike Move Base 2 to Z-CloudApp Workload Sources: Graphics from Everest Group, Inc.
  • 50. Own the Base, Rent the Spike 3 Keep Spikes on AWSApp Workload Sources: Graphics from Everest Group, Inc.
  • 51. Own the Base, Rent the Spike 4 PROFIT!Sources: Graphics from Everest Group, Inc.
  • 52. Take Aways
  • 53. Take AwaysStudio model drives cloud choice
  • 54. Take AwaysStudio model drives cloud choiceCost matters & web-scale delivers
  • 55. Take AwaysStudio model drives cloud choiceCost matters & web-scale delivers“Hybrid” works when clouds interop
  • 56. Why DidCarriers Miss?
  • 57. “It’s not our target market”
  • 58. “It’s not our target market” Except that, enterprises:
  • 59. “It’s not our target market” Except that, enterprises: Use web-scale clouds
  • 60. “It’s not our target market” Except that, enterprises: Use web-scale clouds Make mobile apps
  • 61. “It’s not our target market” Except that, enterprises: Use web-scale clouds Make mobile apps Host app back-ends on AWS
  • 62. “The market isn’t big enough”
  • 63. “The market isn’t big enough” Except that:
  • 64. “The market isn’t big enough” Except that: AWS will be 1B in rev in 2011
  • 65. “The market isn’t big enough” Except that: AWS will be 1B in rev in 2011 > all global ‘legacy cloud’
  • 66. “The market isn’t big enough” Except that: AWS will be 1B in rev in 2011 > all global ‘legacy cloud’ 100% CAGR
  • 67. “The market isn’t big enough” Except that: AWS will be 1B in rev in 2011 > all global ‘legacy cloud’ 100% CAGR Carriers trying web-scale now
  • 68. Bottom Line
  • 69. Bottom LineMassive Disruption
  • 70. Bottom LineMassive DisruptionLegacy cloud biz model is stillborn
  • 71. Bottom LineMassive DisruptionLegacy cloud biz model is stillbornCarriers have inherent advantages
  • 72. Bottom LineMassive DisruptionLegacy cloud biz model is stillbornCarriers have inherent advantagesWeb-scale + Carrier advantage = Win!
  • 73. Bottom LineMassive DisruptionLegacy cloud biz model is stillbornCarriers have inherent advantagesWeb-scale + Carrier advantage = Win!Carpe Diem