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Generating Demand: Enterprise IT Buying in the Early Cloud Era
 

Generating Demand: Enterprise IT Buying in the Early Cloud Era

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Enterprise Cloud Computing adoption and buying trends....

Enterprise Cloud Computing adoption and buying trends.



Appeal to motivators
Mitigate concerns
What Partners are Involved?

Role of professional services
Third-party Involvement in buying & implementing cloud

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    Generating Demand: Enterprise IT Buying in the Early Cloud Era Generating Demand: Enterprise IT Buying in the Early Cloud Era Presentation Transcript

    • Generating Demand:Enterprise IT Buying in the Early Cloud EraFebruary 2011© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. © by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 1
    • Today’s Speakers • WaveLength Market Analytics: Since 2001, specializing in combining knowledge of technology markets, products and services with data management & quantitative analysis for strategies & programs that deliver superior results. • Speaker – Natalie Robb Principal Analyst with WaveLength Market Analytics. • Winn Technology Group Since 1990has supported over 800 technology firms with thousands of demand generation solutions. • Speaker – Geoffrey Swallow, President Winn Technology Group 32 years experience in technology marketing.© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 2
    • Agenda • Study Background and Goals • Intro: Many Technology Segments Competing for the Customer • Baseline on the Cloud Market: Adoption & Penetration • Moving the Market: Motivators & Barriers Useful to Messaging • Reaching the Customer: Role of Partners • Summing Up: Enter the Early Cloud Era© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 3
    • Background on the Research • Primary research conducted by Winn Q3/Q4 2010. • Random sample drawn from Winn Enterprise/ Mid Market DB that included high-level IT decision- makers (senior managers, directors, and VPs) • Primary research data collection methodology: • Telephone survey • Supplemented by e-survey • Landing page provided to provide respondents the ability to answer via web • Provided incentive to increase response rates • Sample size = 126 • Collected summer 2010© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 4
    • Goals • To inform demand generation programs by understanding penetration, concerns and motivators, apps and IT strategies, buying habits and partner involvement, & future plans • Large and medium-sized enterprises to understand key differences among 3 segments: ▫ Pioneers: Using or testing a cloud solution ▫ Planners: Planning for a cloud solution ▫ Stragglers: Not planning a cloud solution at this time© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 5
    • Many Technology Segments Competing for the Customer Infrastructure Software as a Service Communications as a Service Platform as a Service as a Service Cloud Services-enabling Products & Services Consulting & Professional Services for Cloud Cloud Vendors Managed Telecom Software Hardware Services/IT Systems Service Vendors Vendors Outsourcing Integrators Providers Providers = Business model re-alignment and sales channel challenges for entire industry© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
    • Cloud Market Adoption and Penetration© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 7
    • 58% are Doing “Something” in the Cloud • More enterprises doing or thinking about the cloud than those that aren’t • Those actively using or trialing a Cloud Cloud cloud solution, Cloud Pioneers, Pioneers Stragglers more likely to be: 41% 42% ▫ Larger with global networks ▫ Commercial enterprise Cloud ▫ Have more remote and more mobile Planners 17% workers ▫ Actually already using a cloud solution, as opposed to just testingTakeaways: 1) Limit demand generation for cloud solutions to organizations with1000 employees or more at this point in market development; 2) Message on howyour solution addresses andGroup. All Rights Reserved. and mobile workers.© by WaveLength Market Analytics and Winn Technology helps remote 8
    • Besides SaaS: Private Clouds and PaaS Most Common • Pioneers mostly use Platform-as-a-Service & hosted private clouds • In the next 24 months, Pioneers and Planners aim for internal private clouds, public clouds, and take note HYBRID clouds • NOTE: Since hybrid clouds are more challenging, therefore more medium-term…it suggests very quick market development reminiscent of the VOIP market rise. Q: For each of the following types of cloud deployment, we’d like to know if it’s currently in production, in trial, is planned in 24 months? N=126© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 9
    • Cloud Apps Not Yet Mission Critical • Email, collaboration, CRM, and HR will dominate the next 2 years • Enterprise mission-critical apps on a more distant cloud Q. Again for apps, is a cloud computing architecture in production, in trial, planned, or not planned? N=78© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 10
    • Pioneers Mostly Migrate Legacy Apps • … of which email is obviously a legacy app • Planners are more ambitious; not only do they plan on using public and hybrid clouds in greater numbers, they also intend on migrating legacy apps, as well as implementing new onesQ: Does, or will your organization in the next 24 months, use cloud architecture to.. ? (n=78)© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 11
    • Pioneers & Planners More Likely to Use SAN, NAS, & Virtualized Storage • Pioneers and Planners both have a higher percentage of virtualized servers and higher virtualization densities than Stragglers • Virtualization is not a requirement for cloud, but both improve resource utilization Percentage of Each Segment Using Key Technologies 87% 89.5% 80% 72.7% 68.4% 70.3% 71.2% 58.1% 62.3% 60% 52.6% 52.9% 46.3% 41.7% 40% 20% 0% Virtualized Servers Virtualized Storage SANs NAS Cloud Pioneers Cloud Planners Cloud Stragglers© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 12
    • Pioneers Already Outsource More Than Planners and Far More than Stragglers • Nearly 60% of Pioneers outsource at least one function, compared to 14% of Stragglers • Targeting organizations that already outsource would be effective way to penetrate enterprise market Current Outsourcing 18.8% 39.7% Disaster Recovery 21.3% 35.4% 34.4% Perimeter Security 28.8% 21.9% 33.3% Network Management 25.0% 15.6% 31.6% Data Back-ups 13.9% 22.8% 21.9% Storage 13.9% Pioneers Planners Stragglers Q1. Yes or no, do you outsource any of the following functions? N=126© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 13
    • Shift to Cloud Architectures Well-Underway • Although degree of penetration into IT • Cloud apps are those that were “born” Enterprise Cloud Penetration Adoption & Planning is unknown, more enterprises of the Internet, such as email, implementing or planning “something” collaboration, and customer in the cloud than those that are not relationship management • Enterprises don’t want to be left • Mission-critical enterprise cloud apps behind nowhere on the horizon • Cloud Pioneers profile: • Continuum of clouds will exist, as • Large, publicly traded or private some clouds more suited to certain company apps than others • Higher than average number of • Public clouds & hybrids models are remote workers or many smaller closer than they appear branch offices • Higher than average number of mobile workers • Outsource more, higher usage of SANs, virtualized storage and servers© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 14
    • Moving the Market: Motivators & Barriers© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 15
    • Top Motivators: Cost Cutting & Speedy Application Deployment 71% 63% 52% 52% 47% 38.7% 42% 35% 32% 31% 30% 17.1% 18.8% 15.2% 19% 17% 9.1% 8.6% 6.7% 9.4% 6.3% 6.5% 6.5% 3% Cloud Pioneers & Planners Stragglers Q: Using a scale from 1 to 6where 1 is not at all important and 6 is extremely important, please rate the following as motivators in your transition to cloud computing? N=126 % who say motivator is 5 or 6.Takeaway: 1) Include cost reduction and app rapid deployment in solutionmessaging; 2) Appeal to competitiveness that they risk being left behind© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 16
    • Reduced Control is Top Security Concern for Pioneers • Pioneers, those with cloud experience, worry less about all concerns • Planners worry most about data breaches, and Stragglers are concerned with all security issues Q: Using a scale from 1 to 6 where 1 is not at all important and 6 is extremely important, please rate the following as security concerns that limit adoption to cloud computing? N=126© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 17
    • Pioneers Find Network Delays the Top Concern, Even Over Security Pioneers find start-up costs too high and a void of trusted 3rd party relationships Planners find lack of remediation (not truly usage-based yet) and poor interoperability their top concerns Stragglers will need those trusted 3rd party relationships to contemplate cloud Cloud Stragglers Cloud Planners Cloud Pioneers Extent following concerns limit cloud adoption? Average Rank Average Rank Average Rank Network delays 4.13 6 4.14 8 5.75 1 Initial start-up costs too high 5.16 2 3.98 10 5.27 2 Lack of trusted 3rd party relationships 5.64 1 4.09 9 5.14 3 Lack of reporting/management tools 4.11 7 4.63 5 5.02 4 Reduced control/visibility 4.80 4 4.26 7 4.58 5 Network downtime 3.95 9 5.16 3 4.23 6 No vendor neutral APIs 4.40 5 5.05 4 4.23 7 Technology not yet proven 4.98 3 4.26 6 4.10 8 Lack of audit/remediation/reporting 4.11 8 5.77 1 4.08 9 Poor interoperability b/t cloud venders 3.93 10 5.28 2 3.96 10 & internal IT Q: Using a scale from 1 to 6where 1 is not at all important and 6 is extremely important, please rate the following as concerns that limit adoption to cloud computing? N=126© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 18
    • The Network is Underlying Infrastructure Getting Most Evaluation… from all Market Segments • Storage and virtualization software are 2nd and 3rd • Vendors should not ignore management tools; while they are less important now, they’ll be increasingly important as performance improves and approaches commoditization Q. Starting with a 1, please ran the following according to how much evaluate a cloud provider’s underlying infrastructure? (N=78)© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 19
    • Generate Demand by Appealing to Motivators & Mitigating Risks • Reduce costs, do more with less, • It might be more expensive than you Message to Mitigate Risks Message to Motivators lower fixed costs, improve value, etc. think to start up, but there is a • Become more nimble in IT and learning curve and the following apps develop and roll out new apps more will likely be less expensive quickly • Beware the network delay, so prepare your network to yield higher • .. Making business leaner, more agile performance and more competitive to increase • If reduced control is a real concern, industry leadership start with an application that can • All without losing control… tolerate a lower level of performance • Security is about preparation; don’t • Vendors should educate on the do cloud until the network and apps are secure importance of their management tools; be increasingly important as • We are the most qualified to help you get to the cloud performance improves and approaches commoditization© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 20
    • Reaching the Customer: Role of Partners© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 21
    • In Selecting Partner for Cloud Services, Professional Services is Most Critical for Both Pioneers and Planners • The market most demands qualified professional services • SLAs and business process re-engineering also needed • Performance management & monitoring lags… but probably won’t for long, as management offers genuine differentiation Cloud Pioneers- First Mention Cloud Pioneers- Overall Cloud Planners- First Mention Cloud Planners-Overall 59.9% 59.8% 55.1% 47.6% 44.9% 41.5% 38.6% 36% 30.5% 29.9% 18.9% 19% 19.5% 9.5% 13.2% 10.3% 11.3% 14.3% 9.4% 9.5% 13.6% 5.7% % % Professional Business Performance SLAs Creation of Training services process re- management vertical engineering & monitoring applicationsQ: In selecting your most important partner, which 2 capabilities were most critical… ? (n=78) 22© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
    • Planners Involve More Tech Segments than Pioneers in Cloud Implementation • More Pioneers involve software vendors and fewer involve Telco service providers • More Planners involve consultants and fewer engage service providersQ: For each of the following types of participants in cloud implementation, on a scale of 1 to 6 where 1 means “not at all involved” and 6 is veryInvolved,” what’s the involvement level of… ? (n=78)© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 23
    • … But, Overwhelmingly Systems Integrators Most Important Partner for Pioneers while its Software for Planners • Hardware vendors also important to Pioneers • Telcos least important to both Pioneers and PlannersQ: Your internal IT staff aside, which single partner was most important for your deployment… ? (n=78)© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 24
    • Buying Behaviors Typical of Shifting Market: Top Management & Trusted 3rd Parties Very Important • Nearly half of Pioneers say top • Pioneers and Stragglers both business management is very plan on leaning on trusted 3rd involved party more than a cloud provider Those Who Strongly Agree or Agree: Those Who Strongly Agree or Agree: Top Business Management is Very We are more likely to use a Involved with Purchasing Decisions consultant to help create our cloud Regarding Cloud Computing strategy than work with cloud service provider partners 47.2% 48.1% 35.7% 30.4% 35.1% 14.3% Cloud Cloud Cloud Cloud Cloud Cloud Pioneers Planners Stragglers Pioneers Planners Stragglers© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 25
    • Brand, Ability to Manage, Application Features & Functions, Monitored Service Levels Will Become Key Service Differentiators • Imperative to own the customer had never been stronger Channels • Hardware & network companies will be increasingly under pressure as the primary decision-maker changes from the enterprise to the enterprise’s data center partner, but brand can become an important component of the apps or data center’s service sale • Telcos need to avoid the temptation of rapidly entering the market with large IT outsourcing partners that will ultimately compete with them • All vendors interests would be well-served by educating their best channel sales partners© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 26
    • Generating Demand Will Require Fewer, but More Substantive Partners Technology Partnerships • Cloud is mostly about application delivery, so the strong role of software vendors is not surprising • Storage and app vendor partnerships will be increasingly important • Server and network vendors would be well-served by developing closer relationships with application vendors • Network hardware vendors can best support their telco customers in service delivery by avoiding direct competition with them • Integrators, consultants, and other distribution partners need to develop cloud services management capabilities- program managing across organizations within their partner ecosystems© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 27
    • Enter the Early Cloud Era…© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 28
    • Many Say ROI & Deployment Speed Expectations Not Met… Yet Still Pioneers are Largely Satisfied with their Cloud Solution • About a third willing to sign multi-year contracts with cloud services provider • Organizations clearly have realistic expectations as they learn…. Q: On a 1 to 6 scale, how much do you agree with the following statements… ? Base = Pioneers (n=58)© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 29
    • No Turning Back…Pioneers and Planners Both Estimate that 30% of IT Will be in Cloud By 2015 • Even Stragglers expect to be using Cloud by 2015!!!Q: What percentage of your IT will be outsourced to a cloud provider by 2012? 2015 ? (n=126)© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 30
    • Generate Demand During the Early Cloud Era Target the Right Use the Right Message Audience Don’t bother with organizations with Position your message as to how your fewer than 1000 employees at this point solution addresses needs of remote and in the market mobile workers Look for organizations with high levels of Make sure you highlight your professional outsourcing, & key technologies like services capabilities and strengths SANs, server & storage virtualization Educate & partner with your best Address motivators as speed of solution partners deployment and cost reduction Don’t ignore enterprise’s top business Address concerns of security risks, management reduced control, & network performance© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 31
    • Thank you Q&AWaveLength Market Analytics LLC Winn Technology Groupwww.wlanalytics.com www.winntech.net415.519.7030 727-789-0006© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.© All Rights Reserved 32
    • Demand Center (Generation) Strategies • Part 3 of 8 part Webinar Light series • Thought leadership content • Practicing what we preach • Focused content and messaging • Market drivers • Leveraging the demand center© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 33