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HostingCon 2011- How Not Just to Survive but Thrive in the Evolving Hosting Marketplace in Cloudy World

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Cloud Computing is rapidly evolving the hosting marketplace with the big vendors seemingly eating into the supply chain setting up their own data centers and selling Cloud services direct to the …

Cloud Computing is rapidly evolving the hosting marketplace with the big vendors seemingly eating into the supply chain setting up their own data centers and selling Cloud services direct to the customer. Yet dig beneath the surface and the Channel still has enormous value to add, it's just different to before. Cloud Aggregation represents the fastest single growing segment according to the latest Gartner research- so partnering with ISV's represents a massive potential growth area. Adding and bundling Cloud services can transform low margin capital intensive businesses into much more profitable ones. But not all Clouds are created equal, with organizations having Security, Data Protection, Proximity and Sovereignty concerns; Hosters have a massive opportunity to offer differentiated services and need not compete on price. Anders Trolle-Schultz and Justin Pirie, SaaS and Cloud Experts, will set the scene and take you through the journey of the new Cloud ecosystem and the roles the traditional Hoster can take in the emerging Cloud marketplace.

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  • Hi My name’s Justin PirieI’m the Cloud Strategist here at Mimecast but I’m best known as an Analyst Blogger in the SaaS and Cloud space.
  • Archive
  • Continutity
  • Security
  • Hi My name’s Justin PirieI’m the Cloud Strategist here at Mimecast but I’m best known as an Analyst Blogger in the SaaS and Cloud space.
  • 2010 Gartner Hype Cycle for emerging technologies
  • 2010 Gartner Hype Cycle for emerging technologies
  • Cloud and mobile is driving the consumerisation of IT
  • http://tech.fortune.cnn.com/2011/02/07/idc-smartphone-shipment-numbers-passed-pc-in-q4-2010/
  • http://techcrunch.com/2011/06/20/flurry-time-spent-on-mobile-apps-has-surpassed-web-browsing/
  • For the first time in history, consumers have access to better IT at home than at work
  • And consumer facing innovation is driving the market
  • The infiltration of technology in our personal lives is now reversing back into our corporate lives.
  • Oh and subscription businesses are worth 2-3x a services business.
  • Double edged sword
  • Cloud Represents a Perfect Storm for Channel partners
  • A shift from Capex
  • To Opex
  • A shift in focus
  • And a shift from a technology focus
  • To a business focus
  • So why is the cloud so scary for the channel?
  • The cloud offers a lot of what the Channel used to.
  • Disrupts the financial model
  • And the skills
  • We’ve seen this before in other industries
  • Like the travel business- how many people go into a travel agency to book holidays these days?
  • I can’t remember the last time I went to a travel agency- with kayak and comparison sites- I never go there.
  • If you do it’s because you want service- a package, a solution, personalised without any hassle
  • Although cloud adoption has been growing rapidly, it is still unclear where and how the channel can and will add value. Because of this, channel companies have been hesitant to invest, leaving end users with limited access to help when they need it.
  • The challenges facing enterprises building private cloud services or leveraging public cloud services are significantly more complicated than just the technology. Fundamental change is needed in culture, business models, IT architecture, service management and politics — all opportunity areas for the channel to provide business consulting, but very different from the channel's traditional role.
  • Greenfield sites
  • Business processes
  • Hybrid architectures
  • Mean professional services
  • Cloud readyness- tidy up the ecosystem
  • Carrot and stick
  • Any company that relies on the product transaction (hardware or software) to drive attached services revenue supported by ongoing maintenance contracts will have to rethink how and what it offers its customers today and in two or three years.
  • If traditional channel partners don't react quickly enough to the changes in the market, they will be replaced by other channel partners in their accounts.
  • More and more IT providers are attempting to go directly to end-user customers with their cloud solutions only to find out that customers need more than they are willing to provide. This will mean increasing channel capacity to meet demand.
  • The two biggest challenges facing IT providers today are the lack of capabilities contained in their current partner ecosystem and the lack of new entrants with the skills required to further the adoption of various cloud services. Without these capabilities, the entire market will have slower adoption, regardless of the service.
  • Cloud Pro Services in Europe today is $560 million in 2010
  • European Enterprises Will Spend $8.2 Billion on Cloud Professional Services in 2015
  • The new IT environments will have elements of traditional IT, private cloud, and public cloud, and management and integration will become a challenge for which European enterprises will typically choose to hire an external service provider, driving further growth in the cloud professional services market."
  • IDC sees a clear trend that new outsourcing contracts include cloud services, and as much as 25% of cloud professional services will be delivered as part of outsourcing contracts. This has a major influence on the choice of provider for professional services as well as for cloud services: the provider needs to be able to manage both the traditional and the new environment under one contract and needs to be able to migrate larger parts to the new environment during the life of the contract.
  • "Some believe that cloud is just plug and play, but that is not the case for the more complicated existing or new solutions. So professional services will not go away, but they will change and in the longer run beyond 2015 — when migration is complete — account for a much smaller proportion of IT costs.
  • "Another important point is that service providers need to prepare for the rapidly growing request for cloud professional services and have the resources available. Right now, demand is mainly for business cases and roadmaps, requiring both business competence and architectural competence, but on a limited scale. But in a just slightly longer time frame, most if not all consultants need to understand cloud. Vendors have substantial investments ahead of them in creating the necessary capabilities to support this rapidly evolving market."
  • So I think the Channel needs to embrace the Cloud
  • Or face irrelevance….
  • So what to do now?
  • The most important thing is to retain the status of the trusted advisor
  • Which means you need to be educating the customers, not them educating you
  • Cloud is an Evolution and a Revolution
  • So we can’t stay the same can we? Otherwise we could end up like King Canut trying to repel the tide. Obviously the channel needs to evolvehttp://en.wikipedia.org/wiki/File:Cnut_the_Great_Obverse.jpg
  • Cloud Services Brokerage- where you aggregate Cloud Services and provide Solutions to your Clients
  • Through 2015, cloud service brokerage (CSB) will represent the single largest revenue growth opportunity in cloud computing. The channel has an opportunity to play a significant role in aggregation and brokerage services, yet few have begun to invest in becoming a CSB.
  • So this brokerage thing- let’s dig into that. Can you really start to make money from selling Cloud Services?
  • Eat your own dog food
  • Hi My name’s Justin PirieI’m the Cloud Strategist here at Mimecast but I’m best known as an Analyst Blogger in the SaaS and Cloud space.


  • 1. Hosters!
    Thrive not Survive in Cloud .
    Anders Trolle-Schultz
    Justin Pirie
    HostingCon ‘11
  • 2. SaaS-it Consult
    Helping the IT-industry improve their business capabilities
  • 3. Analyst Blogger
  • 4. Community Manager
  • 5. Where I Work
  • 6. Cloud Services for
    Microsoft Exchange
  • 7. Email Archiving
  • 8. Email Continuity
  • 9. Email Security
  • 10. How the Problem
    Used to be Solved…
  • 11. What do Users Get?
  • 12. Unlimited Storage
  • 13. Fast Search
  • 14. 100% Uptime
  • 15. Over 1m users
  • 16. Setting the Scene
  • 17. Software as a Service
    IT-services delivered on-premise/off-premise independent of the traditional perpetual licensing models with focus on the services delivered as a subscription based expense and not the licenses or technology required to deliver the services
  • 18. Cloud Computing – one definition
    Cloud Computing is a production method where the Services are presented on-demand, self-provisioned, scalable, and are billed per logical unit used
  • 19. Cloud.
    How did we get here? .
  • 20. Why we’re here
  • 21. Cloud has it’s own hype cycle!
  • 22. Cloud + Mobile Driving
    Consumerisation of IT
  • 23. Q4 2010- Smartphones
    outsell PC’s
  • 24. June 2011- App usage
    exceeds browser
  • 25. People now have better
    Computing at home than work
  • 26. Consumer Services:
    Driving Innovation
  • 27. Productive at Home:
    Wanted at work.
  • 28. Work & Personal
    Tech Converging
  • 29. The IT market is changing
    Push to Pull
    New Roles and New Players
  • 30. Market is maturing because of Customer demand
    • Economic climate
    • 31. We work/will be working differently
    • 32. Competitive needs
    • 33. Non-IT decision makers move into the choice of IT-services
    • 34. Rapid changing technologies
    • 35. New Players in the game
  • “A "SaaS first" policy is being enacted in the majority of small and midsize businesses”
    Feb 2010
  • 36. Huge Opportunity?
  • 37. Double Edged Sword?
  • 38. Perfect Storm Approaching?
    terren in Virginia
  • 39. From Cap-Ex
    Ian Muttoo
  • 40. To Op-Ex
  • 41. Cloud: Shift in Focus
  • 42. Away from Technology
  • 43. Towards Business
    Lars Plougmann
  • 44. Scary?
    Fellowship of the Rich
  • 45. Some Vendor Services now
    resemble Hosters?
  • 46. Disrupts Financial Model
  • 47. And Skills Required
  • 48. Massive Change!
  • 49. Travel Agents
    Ambernectar 13
  • 50. Disintermediated
  • 51. Different Business Models
  • 52. SaaS-it Evolution model™
    Local Infrastructure
    Local Infrastructure
    Local infrastructure
    IT delivery
  • 53. Unclear where
    channel adds value?
    Andrew Coulter Enright
  • 54. But Cloud is complicated…
  • 55. Businesses aren’t
    Greenfield sites
    Robert Crum
  • 56. Existing Business Processes
  • 57. Business Models
  • 58. IT Architecture
  • 59. All Needs Integration
  • 60. Service Management
  • 61. SLA’s
    Yukon White Light
  • 62. Support Requirements?
  • 63. Politics
    UK Parliament
  • 64. Multiple Vendors
  • 65. Hybrid Architectures?
  • 66. Means Services Essential
    Craft Australia
  • 67. Help customers become
    Cloud Ready
  • 68. Sticks…
  • 69. Reliant on Product?
    (h/w or s/w) must rethink
  • 70. Or be replaced
  • 71. Carrots!
    color line
  • 72. Vendors can’t meet Customer
    requirements on their own
  • 73. Immature Cloud Partner
    Ecosystem + Skills
  • 74. IDC: Cloud Pro Services is
    $560m in Europe Today
  • 75. Growing to $8.2bn in 2015
    Noah Sussman
  • 76. Management + Integration
    Will remain a challenge
  • 77. Up to 25% of Outsourcing
    Contracts will be Cloud PS
  • 78. Cloud is not Plug and Play
    Slack pics
  • 79. Preparation is essential
  • 80. Channel must embrace…
    Ben McLeod
  • 81. Or face irrelevance?
  • 82. What’s next?
  • 83. All about the relationship
  • 84. Need to Retain
    Trusted Advisor Status
  • 85. You must be Educating
  • 86. Cloud= Evolution + Revolution
  • 87. We can’t stem the tide
  • 88. Become a OneStop Shop
  • 89. Construct your portfolio:
    Cloud Services Brokerage
  • 90. Gartner: CSB = Largest
    Revenue Growth Area
    Noah Sussman
  • 91. Eat Your Own Dog Food
  • 92. Must have experience
    to add value
    Meanest Indian
  • 93. Whereareweheading?
    Hardware and Managed Services will be included in the customer offerings
  • 94. Where are we heading?
    • Hardware part of the service offerings
    • 95. The big hardware vendors moving into the Service and System Integration game
    • 96. Managed Services securing on-premises IT
    • 97. Subscription services as on-premises delivery
    • 98. Non-IT players move into the channel
    • 99. Cloud standards and regulations will come into play
  • Innovating the Service Delivery Model is the key to market growth
    Traditional distribution models (Groceries) will set the standards in SaaS
  • 100. IT Delivery System as of today
    End Customer
    Facility Management
    Managed Hosting
    Hosted Services
    System Integration
    The perpetual licensing model is still the dominating license model used
  • 101. We need to learn from......
  • 102. Coca-Cola does it
    • Factory
    • 103. Uses Wholesalers
    • 104. Different outlets
    • 105. Sales & Marketing Support
    • 106. Outsources production
    • 107. Nobody really knows how it is made
  • In Cloud Services we will see
    • Factories
    • 108. Use of Wholesaler (Aggregators)
    • 109. Different outlets
    • 110. Sales & Marketing
    • 111. Outsources production
    • 112. Nobody really knows how it is made
  • Cloud Services distribution – the supply chain
    This is overcrowded and the majority of the customersaren’tlookingthisway
    This is the future marketplace
    Hosted Services Production
    Hardware Vendor
    Software Vendor
    Hardware Vendor
    Software Vendor
  • 113. SaaS distribution – The future landscape
    Online Partner
    Partner Hosted Production
    Online Services of the ”Big Ones”
    Hardware Vendor
    Hardware Vendor
    Software Vendor
    Software Vender
  • 114. An European perspectiveOpportunities and Challenges
  • 115. Where is Europe heading?
    • Uncertainty as to when EU starts regulating in terms of
    • 116. Location and ownership of Data
    • 117. Privacy
    • 118. Security
    • 119. Etc.
    • 120. EU has Cloud Services/Cloud Computing on the Digital Agenda as one of the tools to make SMB/SMEs more efficient and competitive
    • 121. Open Source vs. established vendors (established mainly American vendors)
    • 122. More than 50% of the Open Source community is based in Europe
    • 123. Google and other American Cloud Providers are facing resistance from local European governments
  • Where is Europe heading?
    • UK, Holland and Nordic countries at the forefront of SaaS/Cloud enablement
    • 124. Central and Eastern Europe infrastructure challenges
    • 125. Internal penetration
    • 126. Cost of using services outside of country
    • 127. ISVs not moving to develop and deliver through Cloud Platforms
    • 128. Marketplace (aggregators) “non-existing” (SaaS Plaza, Cloudmore)
    • 129. Which platform to choose from
    • 130. Enterprises work directly with Vendors
    • 131. Local/Regional “Clouds” will dominate the coming years
  • Roles to play- Be humble and nurture YOUR role
  • 132. Nobodycanplay all roles
    Service deliveries and customer offerings
    End Customer
    Sales & Marketing
    Billing & Provisioning
    Connectivity Services
    Technology enablement
    Multi Tenant Hosted Services
    In the Cloud Services
    Dedicated Hosted Services
    System Integration
    Facility Management
    Existing traditional Systems
    Helpdesk & Support
    System Integration
    On Premise Services
    System Integration with on-premise IT
  • 133. Opportunities- Roles to be filled
    • Remain the Trusted Advisor (business processes)
    • 134. Technology enabler- ISV’s and Customers
    • 135. Strategic advisor on technology and Cloud Service choice
    • 136. Syndication / Aggregation of Cloud Services
    • 137. Deliver in
    • 138. SaaS
    • 139. PaaS
    • 140. IaaS
    • 141. HaaS
    • 142. New partner models
    • 143. ISV enabler
  • Thanks
    Feel free to connect .
    Anders Trolle-Schultz
    Justin Pirie
    HostingCon ‘11