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    TBR's 4Q11 Public Cloud Market Landscape TBR's 4Q11 Public Cloud Market Landscape Presentation Transcript

    • CLOUD BUSINESS QUARTERLYSMTechnology Business Research Cloud PortfolioDiscussion DocumentSpring 2012 TBR T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C .
    • TBR Executive Summary 4 Technology Business Research (TBR) Cloud Research Overview 5 TBR’s Cloud Research Products TBR’s Public Cloud Market Landscape 7 TBR Public Cloud Market Landscape Overview 10 TBR Public Cloud Market Landscape Examples TBR’s Cloud Vendor Reports 17 Vendor Report Overview 19 Salesforce.com Examples 21 Google Cloud Examples 23 Microsoft Cloud Examples TBR’s Cloud Computing Adoption Study 26 Table of Contents 28 Methodology 29 Cloud Computing Adoption Study Examples2 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • Executive Summary: TBR’s Cloud Services Practice TBR Executive Summary: TBR’s Cloud Services Practice3 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • Executive Summary: TBR’s Cloud Services Practice TBRTBR evaluates cloud from all angles to give customers recommendationsand actionable insights to drive customer adoptionTBR Cloud Services Topical Research Areas Workloads Competitive Public Cloud Landscape Cloud Practice Purchasing Private/ Trends Hybrid Cloud Partner Ecosystem4 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • Executive Summary: TBR’s Cloud Services Practice TBRTBR’s cloud portfolio provides insights into to public and private cloudvendor business models, trends, and adoption behaviorsTBR Cloud Services Research Products Who is winning in What and why are public cloud? customers buying? • 35+ cloud vendors Vendor Purchasing • SaaS, PaaS, IaaS, SECa • Total cloud market Reports Studies aS Adoption sizing • Purchase scenarios • Key trends and • Buying criteria scenarios • Customer Satisfaction Public Cloud Public Cloud • Segments and Region breakouts Market Adoption Landscape Studies How do cloud leaders Who is buying build their business? Private/Hybrid private/hybrid clouds • Cloud Strategy Cloud Vendor Cloud and how? (Public, Private and Reports Purchasing • Purchasing scenarios Services Portfolio) Studies • Buying criteria • Revenue and • Roles and Profitability relationships • GTM, Resource • Customer Satisfaction Management and Sales Tactics5 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • TBR TBR’s Public Cloud Market Landscape and Example Slides6 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • TBR’s Public Cloud Market Landscape TBRCloud computing is a viable business model, driving growth withintraditional hardware, software, telco and services businessesTBR Public Cloud Market Landscape Research Objective With the quarterly Public Cloud Market Landscape Reports, TBR will deliver research focused on performance by segment and geography empowering clients to focus offerings and routes to market in support of companies that deliver the most value, and thus profit. Public Cloud Business Models are Maturing Key Areas of Focus: • Those vendors that succeed in elevating customer • How are leading and emerging cloud vendors usage of public cloud offerings to a strategic level performing across segments and workloads? will own both customer loyalty and “share-of- • What business models and vendor strategies are wallet” in the cloud for the foreseeable future. succeeding in revenue growth? • Organizations adopting public clouds and related • What are key trends in the vendor landscape? services seek what all buyers of IT want – clear ROI, • Segments: minimal disruption and security risks, and simple • Software-as-a-Service (SaaS) implementation. • Platform-as-a-Service (PaaS) • “Trusted partners” to those end-users will utilize comprehensive product portfolios that transition • Infrastructure-as-a-Service (IaaS) customers from ad hoc, early stage individual • Revenue and growth analysis overall and by offering purchases to strategic corporate-level segment: purchasing. • Public cloud revenue • % change • Absolute change (revenue) • Geographic Analysis • Key Alliances and Acquisitions7 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • TBR’s Public Cloud Market Landscape TBRTBR’s research targets key public cloud deployment scenarios todetermine the drivers of customer adoption and innovative vendorsTBR Public Cloud Market Landscape: 37 Covered VendorsAmazon AWS Salesforce.comAT&T SAP AGBMC CenturyLink (Savvis)CA TechnologiesCiscoCitrixGoGrid Symantec Verizon + Terremark VMware Wipro SaaSGoogle ZohoHP BoxIBM DellInformatica EnomalyIntuitMicrosoftTWC (Navisite) Workday ServiceNow Fujitsu PaaS IaaSNetSuite EMCDimension Data (OpSource) CSCOracle JoyentRackspace EquinixRedhat8 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • TBR’s Public Cloud Market Landscape TBRTBR’s Public Cloud Market Landscape provides actionable insight basedon vendor activity, competitive benchmarks and scenario analysisThe TBR Public Cloud Market Landscape Includes:Executive SummaryTBR Position Growth & Revenue LeadersKey Findings and Trends Geographic OverviewSegment View Key Alliances & AcquisitionsScenario Discussion: Scenario Discussion: Scenario Discussion:Infrastructure-as-a-Service Software-as-a-Service Platform-as-a-ServiceGrowth & Revenue Leaders Growth & Revenue Leaders Growth & Revenue LeadersScenario Analysis Scenario Analysis Scenario AnalysisResource Management Resource Management Resource ManagementKey Alliances & Acquisitions Key Alliances & Acquisitions Key Alliances & AcquisitionsGeographic DiscussionAmericas, EMEA, APAC9 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • CLOUD BUSINESS QUARTERLYSMPublic Cloud Market LandscapeThird Calendar Quarter 2011Publish Date: Jan. 17, 2012 TBR T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C .
    • TBR’s Public Cloud Market Landscape TBRCustomer cloud spending increased across verticals and geographies,despite economic concerns, and TBR projects 23% growth through 2012TBR Estimated Public Cloud Revenue Aggregated TBR Public Cloud Landscape Revenue and Growth $45 $43.00 Total Estimated Public Cloud Revenue (in $ Billions) TBR’s Public Cloud Market Landscape covers 35 vendors. $40 Public The 3Q11 Public Cloud Market Landscape includes revised revenue total Cloud $33.00 $35 for the covered vendors going back to 1Q10 based on both additional Market insights and net new vendors covered. Vendors added in 3Q11 include $30 CenturyLink, Dimension Data, EMC, Equinix, and Fujitsu. $23.00 $25 $20 $18.10 42% year-to-year quarterly growth Public $15 Cloud $12.86 $10.31 Market $8.58 $9.24 $9.88 $10 $7.26 $7.92 Revenue $5.98 $6.44 in TBR’s $5 $3.07 $3.17 $3.19 $3.81 $4.14 $2.41 $2.68 covered vendors $- 3Q10 4Q10 1Q11 2Q11 3Q11 Fst 4Q11 Est 1Q12 2010 Est. 2011 Est. 2012 Calendar Quarter Calendar Quarter Calendar Year TBR Public Cloud Market Covered in the Cloud Market Landscape Report TBR Public Cloud Market Estimate SOURCE: COMPANY DATA; TBR ESTIMATES11 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • TBR’s Public Cloud Market Landscape TBRAt just over half of TBR’s total covered public cloud market revenue, Intuit,Microsoft, and Salesforce.com show the potential for cloud run rates Estimated TBR Public Cloud Market Landscape Vendor and Aggregated Segment Revenue Totals TBR Equinix $4,500 EMC TBR covers 35 companies Estimated Public Cloud Revenue (in $ thousands) Fujitsu ServiceNow $4,000 across all public cloud Workday segments and geographies Enomaly Dell $3,500 Box Zoho Wipro VMware $3,000 Intuit Verizon + Terremark Symantec CenturyLink (Savvis) $2,500 SAP AG Salesforce.com Redhat $2,000 Microsoft Rackspace Oracle Dimension Data (OpSource) NetSuite $1,500 TWC (Navisite) Microsoft Salesforce.com Intuit $1,000 Informatica IBM HP $500 Google GoGrid Citrix Cisco $0 CA Technologies 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 Fst 4Q11 BMC AT&T Calendar Quarter Amazon AWS SOURCE: COMPANY DATA; TBR ESTIMATES12 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • TBR’s Public Cloud Market Landscape TBRThe public cloud “gold rush” continues, driving ongoing pure-playdouble-digit growth and cross-industry new entrants TBR 3Q11 Estimated Public Cloud Revenue Growth vs. Corporate Revenue Growth Dell* Traditional vendor offering public cloud through acquisitions and R&D 130% CA Technologies are still small, but are experiencing rapid growth in the segment. Hosting and telecom providers are accelerating Year-to-year Public Cloud Revenue Growth public cloud entry, building a cohort within TBR’s 110% public cloud benchmarked vendors. ServiceNow Verizon + Terremark Rackspace 90% CenturyLink (Savvis) Dimension Data (OpSource) Workday Enomaly VMware GoGrid AT&T 70% Box Amazon AWS IBM BMC Pure play public cloud vendors Oracle continue to experience high, 50% Redhat Wipro HP Symantec double-digit growth as customers Microsoft across business segments Zoho 30% EMC Google Salesforce increasingly adopt public cloud Fujitsu solutions and incorporate them SAP into core operations. TWC (Navisite) Early public cloud vendors AWS and 10% Intuit Citrix Informatica Salesforce.com sustain their size and Cisco growth through expanded offerings. -10% 10% 30% 50% 70% 90% 110% -10% NetSuite Key: *TBR does not recognize public cloud revenue from Dell Year-to-year Corporate Revenue Growth Weighted Unweighted prior to 1Q11. SOURCE: COMPANY DATA; TBR ESTIMATES13 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • TBR’s Public Cloud Market Landscape TBRVendors with public SaaS as a significant part of their portfolios areexperiencing the most rapid overall growth Corporate Revenue Growth vs. TBR Estimated Public Cloud SaaS Revenue Growth 140% Dell Year-to-year Public Cloud SaaS Revenue Growth (%) Pure-play 120% vendors ServiceNow 100% Workday 80% Fujitsu CA Technologies Google Box IBM 60% BMC Zoho Oracle Weighted HP Symantec Average 40% Microsoft Key Absolute Salesforce.com Average TWC (Navisite) VMware 20% Intuit SAP Cisco Informatica Citrix 0% -10% 10% 30% 50% 70% 90% 110% Year-to-year Corporate Revenue Growth (%)• Pure-play SaaS vendors such as Box, Workday and ServiceNow continue to lead in both cloud and corporate revenue growth as demand for point solutions continues to increase.• More experienced cloud and traditional virtualization vendors, such as VMware, Google and Salesforce.com, experienced comparable public cloud and corporate growth patterns as rapidly growing public SaaS solutions comprise larger portions of their overall revenue than competitors. SOURCE: COMPANY DATA; TBR ESTIMATES14 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • TBR’s Public Cloud Market Landscape TBRPublic cloud vendors are beginning to address the European securityconundrum by building datacenters in the regionEMEA 3Q11 Summary Key Insights Vendor Activities • Although many vendors are • Despite EU security concerns, many looking to expand into EMEA with vendors are establishing a physical their public cloud portfolios, presence in EMEA, launching many security remains a large concern new datacenters. for the EU, and regulations are • In 3Q11 Amazon launched a hindering adoption in the region. datacenter in Stockholm, Google • European cloud vendors are launched a datacenter in Dublin, and building datacenters across Salesforce.com announced plans to Europe to keep data local – build a datacenter in London in 2012. addressing customer concerns • In an announced partnership with about cloud security and Capgemini, Microsoft will gain a newTBR’s estimated accelerating adoption. outlet to deploy its Azure platform inpublic cloud market • South Africa is a growing EMEA, with plans to expand into anacross covered customer of public cloud additional 22 countries.vendors in EMEA computing, as the country is more • Rackspace launched its Europeanrevenue increased economically stable and cloud initiative in early 2011 and is46% year-to-year. technologically advanced than its expanding its presence in the region. neighbors. The nation has recently joined Brazil, Russia, India and China in the economic block known as BRICs. SOURCE: COMPANY DATA; TBR ESTIMATES15 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • TBR TBR’s Cloud Vendor Reports and Examples16 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • TBR’s Cloud Vendor Reports TBRTBR’s cloud reports cover all aspects of vendors’ cloud strategies toenable subscribers to better understand and compete in the marketCloud Business Quarters Reports and Report Structure: 1Q/3Q Reports Initial Response: 5-7 pages Report: 15-20 pages IBM Cloud Timing: Timing: Amazon AWS Within 48 hours of companies’ Within 20 business days of ServiceNow earnings announcements companies’ earnings announcements Verizon + Terremark Includes: Includes: • TBR Position • TBR Position Rackspace • SWOT Analysis • Strategic Outlook and Overview 2Q/4Q Reports • Financial Model Assessment • SWOT Analysis Google Cloud • Go-To-Market Strategy • Scenario Discussion Salesforce.com • Resource Management • Financial Model Assessment Microsoft Cloud Strategy • Segment and Landscape Analysis Oracle Cloud • Go-To-Market Strategy • Sales Discussion • Resource Management Strategy • Geographic Analysis • Alliances, Acquisition, and Portfolio Discussions17 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • CLOUD BUSINESS QUARTERLYSMHighlights from RecentTBR Cloud Business Quarterly Deliverables TBR T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C .
    • Salesforce.com: TBR’s Cloud Vendor Reports TBRSalesforce.com is expanding its customer base and diving into the socialenterprise, but expenses will continue to outweigh revenue in 2012TBR Position Company ObjectivesSalesforce.com’s bet that volume will outweigh Scale customer base to gain market share and enable increased cross-expenses is a good strategy to increase market and upsellingshare, but the company is not making up Salesforce.com is among the largest SaaS vendors and constantly seeksenough ground in volume to sustain added scale. The company will focus on growth over profit as it builds aprofitability. TBR believes the company will not stable base to upsell and cross-sell, betting that volume will outweighslow its growth rate – or turn a profit – until expenses in coming years.2013. Differentiate and add value to solutions to retain customers andIn 4Q11, Salesforce.com achieved stellar year- increase share of walletto-year growth of 38% to $632 million, but As SAP, Oracle and Microsoft enter the cloud market, Salesforce.comreported an operating loss of $6 million. An differentiates its solutions with CRM and SFA to add a “social” layer. Inoperating loss for a fifth consecutive quarter 2012, it will increasingly expand into the social enterprise. Althoughbegs the question: How far will Salesforce.com Salesforce.com has historically focused on growing one product at ago to sustain such high growth? With year-to- time, as it did with CRM, Force.com and Chatter, TBR believes theyear quarterly growth averaging 37% across launch of the social enterprise product family will be successful but2011, and a $3 billion 2012 run rate target, TBR expensive due to acquisition and integration costs along with increasedbelieves Salesforce.com will sustain high growth sales headcount and training.but at the cost of profitability. Sales andmarketing expense growth dramatically Gain early-to-market success in the social enterpriseoutpaces customer growth, at 41% and 9%, Salesforce.com caters to customers’ social interest by spearheading therespectively, indicating churn and increased deal social enterprise trend along with Google, Microsoft and Zoho. The risksizes (primarily due to larger deals). As is that social enterprise capabilities are sold at lower price points thanSalesforce.com ramps up social enterprise traditional enterprise solutions, making volume the key to success.solutions, it will continue increasing sales and In 4Q11, Salesforce.com generated 40% of new business outside ofmarketing expenses to gain market share. CRM, signifying success in other areas, such as ServiceCloud and Radian6.19 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • Salesforce.com: TBR’s Cloud Vendor Reports TBR A focus on customer and portfolio expansion, rather than profitability, will increase Saleforce.com’s share in the crowding cloud market TBR Assessment of Salesforce.com’s two-year strategic outlook Key Takeaways Strategic Outlook • Salesforce.com leveraged a disruptive Financial: Salesforce.com’s fifth consecutive quarter of unprofitability indicates its lack of a sustainable profitability technology, SaaS, to differentiate itself and enter expansion strategy; however, the company’s growth strategy the market, and its success fueled competition. has been successful, evidenced by record revenue growth in Expanding outside of its core CRM market and 4Q11. continuing to differentiate its portfolio are essential to long-term growth and success Go to Market: In 2011, Salesforce.com focused on selling into against competitors. new verticals, such as the public sector. In 2012, the company • Salesforce.com will continue to see high revenue will expand its portfolio to increase share of wallet and will growth in 2012 as its social enterprise portfolio attract new customers looking to leverage cloud benefits. gains traction and solutions continue to launch. Resource: Salesforce.com is investing to rapidly expand into • Expanding into the social enterprise enables the public SaaS and PaaS markets before it is saturated by Salesforce.com to increase share of wallet by vendors such as Microsoft, Oracle, SAP and Zoho. offering solutions to its large and existing SALESFORCE.COM NET REVENUE, GROWTH, customer base. The company’s social enterprise TBR OPERATING MARGIN AND PROJECTIONS has expanded from CRM into marketing, social Net Revenue Growth Year-to-year $3,500,000 50% Net Revenue, In $ Thousands $3,000,000 38.4% 38.3% 36.8% 40% Dashed media, social networking, human capital 33.8% $2,500,000 31.5% 26.9% 21.7% 30% line management, services and support, sales and 36.2% $2,000,000 29.0% 20% represents finance and will it continue moving further into $1,500,000 10% operating the back office. $1,000,000 0% at • TBR believes the company will focus on its $500,000 breakeven $0 -10% recently released products through 2012 and will 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2010 2011 2012 Est. Est. look to further penetrate the back-office market, Revenue Revenue Growth Year-to-year Operating Margin namely in human capital management, financeNOTE: Annual revenue and projections are for calendar 2010-2012, respectively.SOURCE: SALESFORCE.COM AND TBR and supply chain, in 2013. 20 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • Google: TBR’s Cloud Vendor Reports TBRGoogle Apps will benefit from narrowing its strategic focus to the socialenterprise, but faces stark competition from Microsoft and IBM in 2012TBR Assessment Cloud Business Strategic ObjectivesGoogle Apps grew an estimated 25% year-to-year in 4Q11, Drive competition in the productivity space, particularly withand will continue to accelerate adoption in the cloud- Microsoft Office365, for customers seeking cloud-based,based productivity space; however, even with high collaborative solutions and embracing the social enterpriseadoption rates compared to peers, the company is barely In TBR’s Winter Cloud Adoption Study, Google Apps’ 28%monetizing its Apps portfolio. adoption rate was higher than Microsoft Office365’s rate ofGoogle is marketing its cloud business as the “social 24%. TBR estimates Google Apps is growing 25% year-to-yearenterprise,” spurred by the dramatic shift from static and believes that as businesses move toward the socialdesktop applications to social and collaborative cloud- enterprise, adoption and revenue growth will increase.based productivity suites. Similar to Chatter launching Google is shuttering unsuccessful products to refocusSalesforce.com into the social enterprise space, Google is resources on core areas of mobile, social and the cloudpromoting its cloud business (Google Apps, Google AppEngine and Google+) not only as cost-effective but also as Google CEO Larry Page announced the shutdown of 12more mobile, social and collaborative than Microsoft products during the 4Q11 earnings call, but product teamsOffice365 and IBM Lotus Notes. will remain intact to focus on more successful and growing areas, such as Google Apps, Android and Google+. Social Enterprise Although Apps represents a small portion (under 1%) of Social Google’s overall revenue, TBR believes the company will focus Media OnDemand more resources on its Apps portfolio in 2012 to drive Sharing and Access increased sales, retain customers and edge out a large, Collaboration growing list of competitors. As an early-to-market cloud vendor, Google has had the luxury of scaling its customer base with little competition; however, those days are long gone. Customers now have a list of traditional and trusted vendors, such as Microsoft and IBM, that offer competing products and may take market share based on relationships and security concerns.SOURCE: TBR21 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • Google: TBR’s Cloud Vendor Reports TBRGoogle has stopped relying solely on its brand, and will increase adoptionin 2012 by improving its reseller program and adding value to its portfolioTBR Assessment of Google’s two-year strategic outlookKey Takeaways Strategic OutlookFinancial: Google is experiencing high adoption of its • Google is top of mind for customers thanks to itscloud products, but the products’ low price points drag widespread search and personal usage, and willrevenue and profitability below competitors such as continue to successfully penetrate the business worldMicrosoft and IBM. through Google Apps and Google App Engine. • The Apps business will continue driving the majority ofGo to Market: Google leverages brand recognition andits massive web presence to reach the market, but will revenue from SMBs and the midmarket through 2012;rely more heavily on partners to drive sales, especially however, in 2H12, revenue from large enterprises willinto large accounts. begin to increase as Google’s improved reseller program targeting large accounts gains traction.Resource: Google is building datacenters across APAC to • Google App Engine will begin to drive increaseddrive revenue from the quickly growing region. revenue in 2H12 as developer platforms become increasingly important for customers to build and TBR GOOGLE PAID-FOR CLOUD REVENUE, OPERATING INCOME AND customize apps. With vendor integration rising, App GROWTH Engine will enable more vendors to sell through Google, Google Cloud Revnue (In $ Millions) $300 $60 Operating Income (In $ Millions) increasing revenue on all fronts. $250 $50 • Google+ will drive Google’s social enterprise. It may be $200 $40 more useful inside organizations (for projects, teams $150 $30 and videoconferencing) than as a “Facebook-killer,” as $100 $20 companies may not see value in another social media $50 $10 site if they already use vendors such as Facebook and $- $0 LinkedIn. Familiarity with Google is higher than 4Q10 1Q11 2Q11 3Q11 4Q11 Est. CY2010 CY 2011 Est. familiarity with Salesforce.com, giving Google+ Pages an 1Q12 CY2012 SOURCE: TBR AND GOOGLE Google Cloud Revenue Operating Income advantage over Chatter with customers taking early steps into the social enterprise trend.22 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • Microsoft: TBR’s Cloud Vendor Reports TBRMicrosoft will leverage established offerings to write the next chapterof its software saga in the cloudTBR Assessment Corporate Strategic ObjectivesRather than re-inventing itself through cloud, Microsoft is Support hybrid cloud adoption by integrating public andcapturing success in the cloud market by repackaging its private cloud strategies with System Center 2012 hubsolutions to gain cloud customers and revenue. The company is Microsoft is integrating its public and private cloudin the early stages of its cloud strategy, and its cloud platform strategies to support movement between theofferings are comprised primarily of core products, including platforms. With the launch of System Center 2012 inHyper-V, SQL Server and System Center. By leveraging existing mid-2012, the company will enable hybrid cloudofferings, Microsoft ensures a seamless transition for customers deployment and drive revenue across both public andupgrading to cloud-based IT, as well as established routes to private cloud portfolios.market to target new customers adopting Microsoft cloud Leverage partnerships to drive cloud adoption in thesolutions. This foundation of offerings and routes to market will SMB marketensure long-term success as Microsoft’s cloud business movesbeyond the growth stage toward maturity. Partnerships provide Microsoft routes to market and increase the addressable customer base for cloud TBR MICROSOFT CLOUD REVENUE AND YEAR-TO-YEAR GROWTH solutions. To help drive adoption and compete with $1,000 160% Google in the SMB market, Microsoft partnered with $900 140% MasterCard in 4Q11 to offer a 10% discount to $800 120% MasterCard customers. In $ Millions $700 $600 100% Expand geographic presence of cloud business solutions $500 80% Microsoft is expanding its cloud presence globally, $400 60% deploying cloud solutions in regions with rapid IT $300 $200 40% adoption. In addition to feature updates to Office 365 in $100 20% 4Q11, Microsoft made the cloud productivity solution $0 0% available in 22 additional markets – notably Argentina, 4Q10 1Q11 2Q11 3Q11 4Q11 South Africa and Taiwan. Microsoft Cloud Revenue Microsoft Cloud Growth Year-To-Year *Microsoft Enterprise Cloud Revenue SOURCE: TBR ESTIMATES AND MICROSOFT23 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • Microsoft: TBR’s Cloud Vendor Reports TBRMicrosoft will continue to leverage partners and its systems managementcapabilities to drive cloud revenueRevenues TBR MICROSOFT CLOUD REVENUE AND OPERATING INCOMEMicrosoft is driving cloud revenue through partnerships and $1,000integrating solutions to tailor cloud solutions to customer $900 $800needs. In 4Q11 Microsoft announced a partnership with $700 In $ MillionsMasterCard to increase adoption by SMB customers by $600providing pricing discounts to MasterCard small business $500 $400merchants and account holders. With the anticipated launch $300of System Center 2012 in mid-2012, Microsoft will benefit $200from an integrated public and private cloud portfolio, $100promoting hybrid environments to drive revenue across $- 4Q10 1Q11 2Q11 3Q11 4Q11each portfolio. Microsoft Cloud Revenue Microsoft Cloud Operating IncomeExpenses SOURCE: TBR ESTIMATES AND MICROSOFTTBR believes up-front development and deployment costsrepresent the majority of Microsoft’s cloud expenses. S&M TBR ESTIMATED MICROSOFT CLOUD SEGMENT REVENUEand R&D spending to develop and bring to market solutions,including Office 365 and System Center 2012, continues to $1,000,000 $900,000cut into the profitability of Microsoft’s cloud business. $50,124 Revenue (i n $ Thousands) $800,000Margins $700,000Up-front costs will begin to level out as the cloud portfolio $600,000 $27,934matures, resulting in higher margins in Microsoft’s cloud $500,000 $840,620business. TBR estimates Microsoft’s total cloud operating $400,000 $300,000margin was approximately 16.5% in 4Q11. The Server and $599,671 $200,000Tools, Windows and Business divisions, three of Microsoft’s $100,000highest-margin business, provide the majority of the $0functionality for the company’s cloud strategy and account 4Q10 4Q11for its above-average cloud margin. Public Cloud Revenue Private Cloud Revenue24 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • PROPRIETARY WORK: FOR CLIENTCloud Computing Adoption StudyFebruary, 2012 TBR T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C .
    • Cloud Computing Adoption Study: Table of Contents TBRStudy Overview Workloads on Public Cloud (cont.) 5 Methodology 33 Overall Roadmap to Cloud ServicesExecutive Summary Public Cloud Segments 7 TBR Position Public Software as a Service 8 Adoption of Public Cloud Services 37 Key Findings 11 Key Findings 39 Offerings Purchased 12 Adoption of Public Software as a Service 14 Adoption of Public Infrastructure as a Service 40 Offerings Considered 16 Adoption of Public Platform as a Service 41 Key Vendors 18 Adoption of Public Security as a Service 44 Post-Purchase Satisfaction Public Infrastructure as a ServicePublic Cloud Adoption Drivers and Barriers 46 Key Findings 22 Key Findings 48 Offerings Purchased 24 Drivers to Public Cloud Adoption 49 Offerings Considered 25 Drivers to Future Public Cloud Adoption 50 Key Vendors 26 Key Segments That Drive Cloud Adoption 51 Post-Purchase Satisfaction 27 Business and IT Barriers Public Platform as a ServiceWorkloads on Public Cloud 53 Key Findings 30 Business Functions for Public Cloud 55 Offerings Purchased 32 Private Cloud Adoption 56 Offerings Considered26 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • Cloud Computing Adoption Study: Table of Contents TBRPublic Platform as a Service 57 Key Vendors 58 Post-Purchase SatisfactionPublic Security as a Service 60 Key Findings 62 Key Security Functions 63 Key Vendors 64 Post-Purchase SatisfactionAppendix 67 Supplemental Material – Cloud Adoption 74 Supplemental Material – Purchasing Assessment 89 Supplemental Material – Public Software as a Service 97 Supplemental Material – Public Infrastructure as a Service 104 Supplemental Material – Public Platform as a Service 111 Supplemental Material – Public Security as a Service 115 Demographics27 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • Cloud Computing Adoption Study: Methodology TBRTBR surveyed 302 IT purchasers across three business segments tounderstand the public cloud purchasing landscape in the United StatesMethodologyTBR conducted 1,496 online Sample: 100 - Small business (10-99) surveyssurveys with IT decision-makers 101 - Midmarket (100-999)surveysworking at firms based in the 101 - Large business (1000+) surveysUnited States who areresponsible for or who influencepublic cloud services purchasing.302 respondents indicated that Survey Dates: December 2, 2011 – January 2, 2012they had adopted public cloud. Respondents: Total Respondents – 1,496 Public Cloud adopters – 302 SOURCE: TBR WINTER 2011, CLOUD COMPUTING ADOPTION STUDY; TOTAL N= 1,496, N=302 FOR PUBLIC CLOUD ADOPTERS28 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • Cloud Computing Adoption Study: TBR Position TBRTo capitalize on the vast public cloud opportunity, vendors must addresssecurity concerns and provide clear business benefits to customersPublic Cloud Market Summary Nearly three in four businesses are either using or planning to purchase public cloud Drivers and Barriers are varied – but cost reduction and security remain on top Customers want to shift more sophisticated workloads to the cloud SOURCE: TBR WINTER 2011, CLOUD COMPUTING ADOPTION STUDY; TOTAL N= 1,49629 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • Cloud Computing Adoption Study TBRThree of four IT buyers want public cloud services and Software as aService is the leading public cloud segmentPublic Cloud Adoption Adoption remains on the upswing. 74% Market opportunity is growing Buyers are considering multiple vendors of businesses either use or plan to purchase a public Dominant vendors have not emerged cloud service in 6 months 50% Applications lead adoption Buyers are looking for solutions of non-adopters plan to Software and Infrastructure as a Service lead purchase a SaaS application Vendors must get past security issues within 6 months SOURCE: TBR WINTER 2011, CLOUD COMPUTING ADOPTION STUDY; TOTAL N= 1,49630 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • Cloud Computing Adoption Study TBRCloud adoption is near 40% - with public cloud adoption at 20% and 54%intending to add public cloudOverall Cloud Adoption Rates FIGURE 1.0 Overall Cloud adoption rate = N= 1,496 39% IT Decision makers and Line of Public Cloud Business adoption rate = Managers in 20% U.S Considering Public Cloud = 54% • Of the 1,496 respondents who participated in the study, 39% have adopted cloud computing. • 54% of respondents intend to add public cloud services within 12 months. SOURCE: TBR WINTER 2011, CLOUD COMPUTING ADOPTION STUDY; TOTAL N= 1,49631 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • Cloud Computing Adoption Study TBRNot only is overall adoption increasing, but cross-cloud adoption isincreasing for applications, platforms and infrastructureAdoption Rates for Public Cloud Cloud Segment Adoption of Private Cloud among Public Cloud users FIGURE 1.1 Adopted SaaS Public Cloud 69% 20% Not IaaS Considering 53% Public Cloud 26% PaaS Considering 50% Public Cloud 54% SECaaS 22% FIGURE 1.2 N=1,496 N=302 for public cloud adopters N=302 for public cloud adopters 20% of the respondents have adopted public cloud and 54% are considering adoption of public cloud computing services. SaaS leads the cloud segments with an adoption rate of 69% among cloud users. SOURCE: TBR WINTER 2011, CLOUD COMPUTING ADOPTION STUDY; TOTAL N= 1,496, N=302 FOR PUBLIC CLOUD ADOPTERS32 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • Cloud Computing Adoption Study TBRWhile SaaS, the leading public cloud segment, dominates adoption, allsegments will see increased future growth as cloud becomes the normKey Findings and Conclusions Key Findings Conclusions and Implications • Public cloud adoption is rapidly growing across • The public cloud adoption rate is 20%, business segments and the “gold rush” will but it is growing at a rapid 40% year-to- continue as customers realize value through Adoption year according to TBR research. The cost savings, scalability, integration and Rates & majority of adoption comes from SaaS, portability. Drivers though each type of cloud segment is • Though majority of customers expect modest progressing at a different rate . savings between 10% - 29%, they complained • Over 50% of respondents indicated cost about lower cost savings than expected, savings as their primary purchase driver. opening up opportunities for low-cost vendors to capitalize on. • Those vendors that can quantify cloud Data security and privacy are top concerns computing benefits, map workloads to Barriers for both public cloud adopters and non- deployment options while alleviating adopters among other concerns such as customers’ security-related concerns to create unclear ROI and legacy infrastructure . a trustworthy cloud will accelerate adoption within lagging segments. SaaS is the most popular segment and is TBR believes there is a large revenue opportunity growing across multiple applications, while for security vendors as it remains an overarching Key Solution SECaaS saw the lowest adoption rate. concern. Trusted security vendors, Symantec, Segments However, as security is a top concern, TBR McAfee and Trend Micro will continue as leaders believes SECaaS will begin to see rapid in this space as customers flock to proven adoption as public cloud moves from a nice- security solutions over newer-to-market pure to-have to core workloads and functions. cloud plays. SOURCE: TBR WINTER 2011, CLOUD COMPUTING ADOPTION STUDY; TOTAL N= 1,496, N=302 FOR PUBLIC CLOUD ADOPTERS33 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
    • TBR For additional information please contact: Stuart Williams (stuart.williams@tbri.com), Director – TBR Software Practice34 Technology Business Research Cloud Portfolio – Discussion Document ©2012 Technology Business Research, Inc.
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