February 12, 2008. Call in at 12:55 p.m. Eastern time Teleconference Is Cloud Computing Viable For Enterprise IT? James Staten, Principal Analyst Forrester Research

Theme Cloud Computing has the potential to disrupt IT as we know it today.

Agenda IT implications of business at Internet speed Cloud computing defined Who is using it and how? Where this is headed What’s the enterprise IT play?

IT implications of business at Internet speed

Cloud computing defined

Who is using it and how?

Where this is headed

What’s the enterprise IT play?

Agenda IT implications of business at Internet speed Cloud computing defined Who is using it and how? Where this is headed What’s the enterprise IT play?

IT implications of business at Internet speed

Cloud computing defined

Who is using it and how?

Where this is headed

What’s the enterprise IT play?

Keeping up with the Jones’ Meet the new Mr. Jones. He’s: Younger than you Faster than you More connected than you More global than you More flexible than you Investing more than you Didn’t used to be your competitor

Meet the new Mr. Jones.

He’s:

Younger than you

Faster than you

More connected than you

More global than you

More flexible than you

Investing more than you

Didn’t used to be your competitor

What it takes to compete now Get to market faster Fail fast Do now, plan later Act below the budget line If it succeeds: Build upon it faster Take it global fast Scale it fast (cloud scale)

Get to market faster

Fail fast

Do now, plan later

Act below the budget line

If it succeeds:

Build upon it faster

Take it global fast

Scale it fast (cloud scale)

What’s driving business to cloud-scale? Windows Live

The IT-business disconnect is growing Business wants A place to experiment Fast integration Looser IT restrictions Responsiveness IT wants Plenty of notice Predictability Stability Justification Wham!

Business wants

A place to experiment

Fast integration

Looser IT restrictions

Responsiveness

IT wants

Plenty of notice

Predictability

Stability

Justification

Who’s filling the gap? Cloud computing

Agenda IT implications of business at Internet speed Cloud computing defined Who is using it and how? Where this is headed What’s the enterprise IT play?

IT implications of business at Internet speed

Cloud computing defined

Who is using it and how?

Where this is headed

What’s the enterprise IT play?

Definition: cloud computing A pool of highly scalable, abstracted infrastructure, capable of hosting end-customer applications, that is billed by consumption.

Cloud computing characteristics Massive, abstracted infrastructure Components decided for you Dynamic allocation, scaling, movement of applications Pay per use No long-term commitments OS, application architecture independent No hardware or software to install

Massive, abstracted infrastructure

Components decided for you

Dynamic allocation, scaling, movement of applications

Pay per use

No long-term commitments

OS, application architecture independent

No hardware or software to install

Cloud computing architectural fundamentals Source: upcoming research, Cloud Computing: Not Ready For The Enterprise...Yet.

Cloud computing in use Source: upcoming research, Cloud Computing: Not Ready For The Enterprise...Yet.

Who are the cloud providers today? Source: upcoming research, Cloud Computing: Not Ready For The Enterprise...Yet. Virtual iron-based cloud infrastructure with embedded cluster load balancing and HA services FlexiScale XCalibre Cloud offering housed within Terremark collocation facilities Infinistructure Terremark Extendable cloud platform for Web-based applications Force.com Salesforce.com 3Tera AppLogic-based cloud utility computing platform GridLayer Layered Technology Cloud computing platform built on OpenSolaris and Joyent Accelerators (virtual servers) Accelerator for Applications Joyent 3Tera AppLogic-based cloud utility computing platform DynamicGrid Fortress ITX 3Tera AppLogic-based cloud hosting and cloud-enabling services Computing Utility Enki 3Tera AppLogic-based cloud hosting for small businesses Virtual Hosting AretiInternet Elastic Compute Cloud (EC2) virtualized cloud infrastructure, Simple Storage Service (S3) cloud storage, various cloud implemented application services Amazon Web Services Amazon.com Content-delivery network solution that improves edge performance application experience by moving cloud applications closer to target users Application Performance Services Akamai Description Offering Company

Cloud computing: the latest evolution of hosting Source: upcoming research, Cloud Computing: Not Ready For The Enterprise...Yet.

Agenda IT implications of business at Internet speed Cloud computing defined Who is using it and how? Where this is headed What’s the enterprise IT play?

IT implications of business at Internet speed

Cloud computing defined

Who is using it and how?

Where this is headed

What’s the enterprise IT play?

Cloud’s customers Startups Web-based business, SaaS, collaboration services, widget providers, mobile services, social networking Small businesses Online businesses, online presence, collaboration, enterprise integration Enterprises R&D projects, quick promotions, widgets, online collaboration, partner integration, social networking, new business ventures

Startups

Web-based business, SaaS, collaboration services, widget providers, mobile services, social networking

Small businesses

Online businesses, online presence, collaboration, enterprise integration

Enterprises

R&D projects, quick promotions, widgets, online collaboration, partner integration, social networking, new business ventures

The cloud value prop to enterprise Instant, easy access to resources No commitment Pay for it with a credit card Instant scale if you need it Try first, justify second Source: http://open.blogs.nytimes.com

Instant, easy access to resources

No commitment

Pay for it with a credit card

Instant scale if you need it

Try first, justify second

Agenda IT implications of business at Internet speed Cloud computing defined Who is using it and how? Where this is headed What’s the enterprise IT play?

IT implications of business at Internet speed

Cloud computing defined

Who is using it and how?

Where this is headed

What’s the enterprise IT play?

Cloud advantages Massive scale yields economies of scale. Common infrastructure speeds innovation. Dynamic, automated infrastructure easier High utilization yields greater ROI. Success drives IT investment. IT is the business. If your customers succeed, so do you.

Massive scale yields economies of scale.

Common infrastructure speeds innovation.

Dynamic, automated infrastructure easier

High utilization yields greater ROI.

Success drives IT investment.

IT is the business.

If your customers succeed, so do you.

Where the advantages really show Internet scale — across megacenters Where applied to direct services and cloud customers Where a common business model can be deployed on a global scale

Internet scale — across megacenters

Where applied to direct services and cloud customers

Where a common business model can be deployed on a global scale

Who’s got next . . . most likely Source:

Why this is so compelling: It’s a disruptive technology Doesn’t meet enterprise needs Isn’t easy for enterprises to control Doesn’t support general enterprise IT practices Good enough for startups and SMBs “ Cheap” compute Source: upcoming research, Cloud Computing: Not Ready For The Enterprise...Yet.

Doesn’t meet enterprise needs

Isn’t easy for enterprises to control

Doesn’t support general enterprise IT practices

Good enough for startups and SMBs

“ Cheap” compute

Agenda IT implications of business at Internet speed Cloud computing defined Who is using it and how? Where this is headed What’s the enterprise IT play?

IT implications of business at Internet speed

Cloud computing defined

Who is using it and how?

Where this is headed

What’s the enterprise IT play?

Recommendations Start experimenting with the cloud. Be prepared for your business to experiment with it. Let them know what you want. Leverage the cloud infrastructure internally. Build your own cloud.

Start experimenting with the cloud.

Be prepared for your business to experiment with it.

Let them know what you want.

Leverage the cloud infrastructure internally.

Build your own cloud.

Who are the leading enterprise cloud builders today? Source: upcoming research, Cloud Computing: Not Ready For The Enterprise...Yet. Helps enterprises leverage clouds RightScale Network.com is Sun’s first foray into this space and the model upon which SunPS is architecting clouds today Sun AppLogic is a cloud infrastructure software offering. 3Tera Blue Cloud is IBM’s initiative to help enterprises, governments and educational customers build and deploy their own clouds IBM Dell Data Center Solutions offers Dell Cloud Computing Solutions for creation, optimization and management of enterprise clouds. Dell Offering Company

Cloud building blocks Source: upcoming research, Cloud Computing: Not Ready For The Enterprise...Yet.

Thank you James Staten +1 650.581.3824 [email_address] www.forrester.com Join our IT Research Panel today! By signing up you can contribute to surveys and get complimentary access to pre-published insight, comparative data, and best practices drawn from the surveys conducted. Visit: http://itpanel.forrester.com/

Selected bibliography December 24, 2007, “There Are Three IT Architectures Not One” November 14, 2007, “Hosted eCommerce: An Interim Solution” August 15, 2007, “What Can Enterprise Learn From The Web Giants?” July 26, 2007, “Developing Enterprise Web 2.0 Applications” February 22, 2007, “Google Releases Google Apps Premier Edition”

December 24, 2007, “There Are Three IT Architectures Not One”

November 14, 2007, “Hosted eCommerce: An Interim Solution”

August 15, 2007, “What Can Enterprise Learn From The Web Giants?”

July 26, 2007, “Developing Enterprise Web 2.0 Applications”

February 22, 2007, “Google Releases Google Apps Premier Edition”