Cloud Adoption in the Enterprise:
From the Playground to Production
William Fellows
VP Research
 Unique combination of research,
analysis & data
 Published syndicated research on
emerging markets
 Daily qualitative ...
3
Toward Enterprise-Class Cloud Computing
CloudScape
A Perfect Storm of Conditions
How real is it? Growth trends, market for...
451 CloudScape – Service Overview
 Interdisciplinary approach – 451 & Tier 1
 A comprehensive, coherent conceptual
frame...
451 CloudScape – Early-Adopter Program
 10 years working with early adopters and innovators
 Cloud is a logical endpoint...
CloudScape Codex: 8 Cloud Attributes
Publically
Accessible
Programmatic
Interfaces
Multi-
tenancy
Accounting
Granularity
S...
The Great Recession
Consumerization of enterprise IT
Service consumption
“I need a cloud strategy”
A Perfect Storm
How real is it?
Growth trends, market forecast
Cloud-as-a-Service categories
Infrastructure-
as-a-Service
Storage-as-a-
Service
StandAloneCloudStorage
Archiving
OnlineBa...
Cloud Market Overview – Revenue ($bn)
CAGR
41%
CAGR
23%
$1.7
$2.8
$4.3
$6.3
$8.5
$11.2
$9.4
$12.7
$15.9
$19.9
$24.4
$29.4
...
Estimated 2012 Cloud Revenue Breakdown, Including SaaS
13%
5%
2%
7%
73%
IaaS
Storage as a Service
IT Management as a Servi...
Estimated 2012 Cloud Revenue Breakdown by Subsector
– Total $4.3bn (220+ vendors)
46%
19%
8%
27%
IaaS
Storage as a Service...
IaaS Market Overview ($m)
Amazon
56%
Rackspace
8%
Verizon
6%
Joyent
3%
SoftLayer
3% Others
24%
 Amazon’s market to lose
...
STaaS Market Overview ($m)
 STaaS
 2011-2015 CAGR: 19%
Autonomy
30%
ProofPoint
11%
LiveOffice
7%
Evault
7%
VMware
5%
Oth...
PaaS Market Overview ($m)
 ‘PaaS from SaaS’ proving successful
 2011-2015 CAGR: 46%
Salesforce.com
26%
IBM
19%
Microsoft...
Cloud As-a-Service Revenue by Geography ($m): ~220 vendors
Cloud: As-a-Service 2010 2011 2012 2013 2014 2015
Total NA Clou...
Cloud As-a-Service 2012 Revenue by Vertical: ~220 vendors
33%
16%
17%
7%
4%
7%
16%
Technology & Telecom
Financial (Banking...
Cloud Market Evolution
$1.7
$11.2
2010 2011 2012 2013 2014 2015
Focus:
Inital Cloud Engagements
Focused on Infrastructure
...
End user adoption
Cloud adoption snapshot: delivery model
Source: The 451 Group Cloud End User Survey 2011
Cloud adoption snapshot: deployment model
Source: The 451 Group Cloud End User Survey 2011
Cloud adoption snapshot: drivers
Source: The 451 Group Cloud End User Survey 2011
Cloud adoption snapshot: workload
Source: The 451 Group Cloud End User Survey 2011
Cloud adoption snapshot: inhibitors
Source: The 451 Group Cloud End User Survey 2011
Enterprise IT as service provider
and cloud consumer
Financial Services: IaaS Hybrid Using Multiple Cloud Providers
 Organizational transformation
 Standard platforms, reusa...
Project Engineering: Private Internal to Hybrid Hosted
 Hybrid private and public:
 Public: Amazon
 Private: Cloud.com,...
Transport: PaaS, Hosted Virtual Private Cloud
Project Halo:
 Departure control to .NET service bus
in Azure
 5 airports ...
Media: Internal Cloud SP, Using Hosted and On-Premises Resources
Business Challenge:
 Socialize and synchronize cloud mod...
Cloud is the ‘promising molecule’
‘Information Workplace’ is a spear tip of adoption
Strategic drivers:
 Accelerated pace of change
 External access & col...
British Parliament: Onto Cloud Via Existing Hosting Partner
Business challenge:
 Reduce cost by 25% in 2014-15
 Extraord...
The 451 Group: Who we are and who uses us?
Founded in 1999
Analyzing the business of enterprise IT innovation
900+ custome...
Private Cloud Enablement
 Imitate, emulate, replicate
 Turn your own datacenter into a cloud
that works like Amazon, Rac...
But…
 Private cloud is ring-fenced and finite
 Doesn’t reproduce elasticity of hosted cloud
Which means…
 Cloud service providers and hosting partners will be
required
 Hybrid model is dominant:
• Virtualized, au...
Internal Private Cloud Evolution
Phase 1: Initial Adoption
Hypervisor Administration/Monitoring
Focus: Consolidation
Phase...
Cloud service broker: hybrid cloud migration
Enable Host Unify Automate
Cloud service broker: tooling-up
 Automation
 Self-service
 Resource
management
 Monitoring
 Metering, billing
 On-b...
Enable cloud services with turnkey IaaS software stacks
• Abiquo
• CA AppLogic
• Citrix Cloudstack
• Virtustream Enomaly E...
Host cloud services both on- and off-premise
• Amazon Web Services
• CloudShare
• ElasticHosts
• Flexiant Extility
• Hatsi...
Unify management across on-prem and hosted clouds
• AccelOps APM & SIEM
• Cloupia Unified Infrastructure Controller
• Conv...
Automate, orchestrate and interoperate between clouds
• Appistry CloudIQ
• Cloudsoft
• Cordys
• Quest Cloud Automation Pla...
What we are hearing
Red sky at night
Best Execution Venue
Cloudonomics
Security
Big Data
Propaganda vs reality
What could ...
Best Execution Venue
 It’s right-tiering, like HSM and ILM
for workloads
 Vendors, service providers: everyone
wants to ...
Cloudonomics
 IT cost center to IT as a service
 Benchmarking against Amazon
• AMI becoming a de facto standard?
• VMwar...
New lights to shine in the hedgerow of IT
 Cost Management
• Big Four
• Cloud Cruiser
• VAlign
• Apptio
• VMware Digital ...
Security: a cloud enabler?
“Firewalls and VPNs are like we built cities hundred of years ago with
a wall around them”
• Cl...
Cloud and Big Data: TBD
 Cloud is a deployment option – databases as VMs or hosted
services
 New databases to exploit di...
Propaganda vs reality
 Cloudbursting
 Multi-cloud strategies
 Jurisdiction shopping
What could happen?
 IT departments won’t be needed
 IT costs will diminish
 Less complexity
 Technology will become pe...
From Playground to Production
 Faster, flexibly, on more devices
 New apps vs migration
 In the critical path, not an e...
Thank You – Questions?
william.fellows@451research.com
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451 Research Enterprise Cloud Adoption 2012

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451 Research Enterprise Cloud Adoption 2012

  1. 1. Cloud Adoption in the Enterprise: From the Playground to Production William Fellows VP Research
  2. 2.  Unique combination of research, analysis & data  Published syndicated research on emerging markets  Daily qualitative & quantitative insight  Analyst advisory, support  Global events  Go-to-market support 2
  3. 3. 3
  4. 4. Toward Enterprise-Class Cloud Computing CloudScape A Perfect Storm of Conditions How real is it? Growth trends, market forecast End User Adoption Bottling the Magic of Cloud Signals Playground to Production
  5. 5. 451 CloudScape – Service Overview  Interdisciplinary approach – 451 & Tier 1  A comprehensive, coherent conceptual framework, the Cloud Codex  Cloud marketplace surveillance and analysis – vendors, service providers  Market sizing, surveys  End users: best practices, vendor selection, peer events  Actionable advice to improve opportunity for success  Supported by TheInfoPro and ChangeWave  Convergence is the key
  6. 6. 451 CloudScape – Early-Adopter Program  10 years working with early adopters and innovators  Cloud is a logical endpoint  Shining a light on the arc of adoption  250+ enterprises have participated across many verticals
  7. 7. CloudScape Codex: 8 Cloud Attributes Publically Accessible Programmatic Interfaces Multi- tenancy Accounting Granularity Scalability and Elasticity Virtualization and Automation Web Management Capabilities Rapid Provisioning
  8. 8. The Great Recession Consumerization of enterprise IT Service consumption “I need a cloud strategy” A Perfect Storm
  9. 9. How real is it? Growth trends, market forecast
  10. 10. Cloud-as-a-Service categories Infrastructure- as-a-Service Storage-as-a- Service StandAloneCloudStorage Archiving OnlineBackup Platform-as-a-Service PaaSfromSaaS StandAlonePaaS PlatformManagement Pre-Production Integration-as-aService Software as a Service ITManagement-as-a- Service ProblemManagement Systems&Network Monitoring&Management ResourceUtilization,Capacity Planning&Billing ERP CRM ContentandCollaboration
  11. 11. Cloud Market Overview – Revenue ($bn) CAGR 41% CAGR 23% $1.7 $2.8 $4.3 $6.3 $8.5 $11.2 $9.4 $12.7 $15.9 $19.9 $24.4 $29.4 $0 $5 $10 $15 $20 $25 $30 $35 2010 2011 2012 2013 2014 2015 IaaS, STaaS, PaaS & ITMaaS SaaS, IaaS, STaaS, PaaS & ITMaaS
  12. 12. Estimated 2012 Cloud Revenue Breakdown, Including SaaS 13% 5% 2% 7% 73% IaaS Storage as a Service IT Management as a Service PaaS SaaS
  13. 13. Estimated 2012 Cloud Revenue Breakdown by Subsector – Total $4.3bn (220+ vendors) 46% 19% 8% 27% IaaS Storage as a Service IT Management as a Service PaaS
  14. 14. IaaS Market Overview ($m) Amazon 56% Rackspace 8% Verizon 6% Joyent 3% SoftLayer 3% Others 24%  Amazon’s market to lose  2011-2015 CAGR: 47% $623 $1,207 $1,997 $3,057 $4,233 $5,631 2010 2011 2012 2013 2014 2015
  15. 15. STaaS Market Overview ($m)  STaaS  2011-2015 CAGR: 19% Autonomy 30% ProofPoint 11% LiveOffice 7% Evault 7% VMware 5% Others 40% $516 $657 $824 $1,000 $1,164 $1,339 2010 2011 2012 2013 2014 2015
  16. 16. PaaS Market Overview ($m)  ‘PaaS from SaaS’ proving successful  2011-2015 CAGR: 46% Salesforce.com 26% IBM 19% Microsoft 13% Google 8% Intuit 6% Others 28% $398 $738 $1,156 $1,744 $2,466 $3,334 2010 2011 2012 2013 2014 2015
  17. 17. Cloud As-a-Service Revenue by Geography ($m): ~220 vendors Cloud: As-a-Service 2010 2011 2012 2013 2014 2015 Total NA Cloud Revenue $1,209 $1,942 $2,820 $3,938 $5,105 $6,400 Total EMEA Cloud Revenue $321 $582 $975 $1,516 $2,199 $3,064 Total APAC Cloud Revenue $122 $298 $523 $832 $1,215 $1,696 0% 20% 40% 60% 80% 100% 2010 2011 2012 2013 2014 2015 NA EMEA APAC
  18. 18. Cloud As-a-Service 2012 Revenue by Vertical: ~220 vendors 33% 16% 17% 7% 4% 7% 16% Technology & Telecom Financial (Banking, Insurance) Government & Education Healthcare Manufacturing & Automotive Retail & Consumer Other (Media, Transportation Food & Beverage, Oil and Gas, Real Estate)
  19. 19. Cloud Market Evolution $1.7 $11.2 2010 2011 2012 2013 2014 2015 Focus: Inital Cloud Engagements Focused on Infrastructure Customers: Developers SMBs Workloads: Test & Development Project-Based 'Public Clouds Dominate' Focus: Greater Traction with Management Products & Vertical Offerings Customers: Enterprise Adoption Elevates Market Workloads: Production & Mission-Critical 'Focus Shifting to Private/Hybrid Clouds' PHASE TRANSITION Investments, product intros & new deals point to: Increase in private activiy, Higher-end data, Shift up the stack Phase 1: On-Demand Infrastructure Phase 2: Management of Cloud Environments
  20. 20. End user adoption
  21. 21. Cloud adoption snapshot: delivery model Source: The 451 Group Cloud End User Survey 2011
  22. 22. Cloud adoption snapshot: deployment model Source: The 451 Group Cloud End User Survey 2011
  23. 23. Cloud adoption snapshot: drivers Source: The 451 Group Cloud End User Survey 2011
  24. 24. Cloud adoption snapshot: workload Source: The 451 Group Cloud End User Survey 2011
  25. 25. Cloud adoption snapshot: inhibitors Source: The 451 Group Cloud End User Survey 2011
  26. 26. Enterprise IT as service provider and cloud consumer
  27. 27. Financial Services: IaaS Hybrid Using Multiple Cloud Providers  Organizational transformation  Standard platforms, reusable components  Enterprise services = manufacturer  Roll out across all units, geographies  Sourcing from multiple clouds  Inject and control virtual firewall into cloud Benefits:  Time to market  40% cost savings  Flexibility  No new datacenters  No longer rely on one sourcing partner Goals:  Become an ISP for the business  Four-year journey - 2,500 servers in 2011  Using cloud orchestration layer to manage hybrid  Security is way behind – “pulling the regulator with us” ‘Big Four’ Australian bank
  28. 28. Project Engineering: Private Internal to Hybrid Hosted  Hybrid private and public:  Public: Amazon  Private: Cloud.com, Nimbula  Virtualized (Citrix), multi-tenanted, multiple chargeback mechanisms  NewScale service catalog  Virtual first, PSN-certified, single pane – governance and management Benefits and next steps:  30% infrastructure cost savings  Agility, collaboration, location- independence  User community (desktops) into the cloud  ‘Follow the moon’ Project Services Network:  Google, Amazon, YouTube envy  Cost-effective model for future  Complex enterprise environment  Thousands of VMs
  29. 29. Transport: PaaS, Hosted Virtual Private Cloud Project Halo:  Departure control to .NET service bus in Azure  5 airports now – Gatwick next  Universal access to run EasyJet and third-party apps  Deploy own WiMAX  Savvis for dedicated/sensitive apps Benefits:  Agility, real-time  IT budget is 0.9% of revenue  Remove dependency on service desks  Changing people, processes is hard  Move more apps to cloud-hosted infrastructures Goals:  Use cloud to extend operationally and commercially into airport space  Stop paying for characters  Drive down time to market and cost
  30. 30. Media: Internal Cloud SP, Using Hosted and On-Premises Resources Business Challenge:  Socialize and synchronize cloud model across 13 business units  Multi-tenancy, compliance, chargeback in shared environments  Demand spikes for competitions  Vendor benefits depend on how well data is segmented to work with it  SLAs Business Benefit:  Time to market  Consumerization of IT via Amazon, Google, salesforce.com  Common technology baseline – cloud used for additional resource  Handling all game functions  Support multiple clouds? Goals:  Print co  media co  Support digital strategy as a business model, not a technical model  Create an internal cloud service-delivery function  Cut datacenter footprint  25% of capacity in cloud
  31. 31. Cloud is the ‘promising molecule’
  32. 32. ‘Information Workplace’ is a spear tip of adoption Strategic drivers:  Accelerated pace of change  External access & collaboration  Simpler operating model  Evergreen technology  Social computing Email Portal Chat Remote Meetings Collaboration
  33. 33. British Parliament: Onto Cloud Via Existing Hosting Partner Business challenge:  Reduce cost by 25% in 2014-15  Extraordinary operating environment  Security, data sovereignty, data migration, bandwidth, compliance, SLAs  Support 8,000 members and staff, plus 11,000 businesses  144 apps, 1,500 locations – and mobile Business benefit:  Alignment of cloud with key goals: saving money, greater flexibility and digitization of services  Existing service supplier relationship  Become advisor, not a hardware supplier  Blueprint for shared services Goal:  Reduce cost — including license fee  Deliver IT as a service  Advisory role  Implement blueprint for change  Consumerization of IT, digitization, tablet device use
  34. 34. The 451 Group: Who we are and who uses us? Founded in 1999 Analyzing the business of enterprise IT innovation 900+ customers across …  Vendors  Investors (including 150 VCs and 80 investment banks)  Service-providers  End users Offices in New York (HQ), Boston, London, San Francisco 90+ total employees with 40+ analysts Tier 1 Research service focused on datacenter, hosting & IT services Operate four major events per year European Commission projects Bottling the magic of cloud
  35. 35. Private Cloud Enablement  Imitate, emulate, replicate  Turn your own datacenter into a cloud that works like Amazon, Rackspace… Advantages:  Security and compliance  Leveraging existing investment in datacenters  Run apps in any datacenter  Powers new cloud model inside organizations
  36. 36. But…  Private cloud is ring-fenced and finite  Doesn’t reproduce elasticity of hosted cloud
  37. 37. Which means…  Cloud service providers and hosting partners will be required  Hybrid model is dominant: • Virtualized, automated on-premise infrastructure with a hosted elastic option • Rackspace, Amazon, VMware, Salesforce.com and others acknowledge this
  38. 38. Internal Private Cloud Evolution Phase 1: Initial Adoption Hypervisor Administration/Monitoring Focus: Consolidation Phase 1: Virtualization <30% Phase 2: Management Stabilization Phase 2: Management/Stabilization Virtualization Management / Capacity Planning Automation Focus: Private Cloud Enablement Phase 3: Hybrid Cloud Enablement Phase 3: Hybrid Enablement On-Ramps Cloud Brokers Hybrid Cloud Management / Enablement Focus Shifts Toward Hybrid Clouds 2009 2011 2012 2013+2010
  39. 39. Cloud service broker: hybrid cloud migration Enable Host Unify Automate
  40. 40. Cloud service broker: tooling-up  Automation  Self-service  Resource management  Monitoring  Metering, billing  On-boarding, re-housing  Policy  Process  Governance  Security and access  Lifecycle  Service management
  41. 41. Enable cloud services with turnkey IaaS software stacks • Abiquo • CA AppLogic • Citrix Cloudstack • Virtustream Enomaly Elastic Computing Platform • Eucalyptus • Hexagrid VxDatacenter • MorphLabs mCloud DCU • Nimbula Director • OnApp Cloud • OpenNebula • OpenStack • VMware vCloud • Zimory Enterprise Cloud
  42. 42. Host cloud services both on- and off-premise • Amazon Web Services • CloudShare • ElasticHosts • Flexiant Extility • Hatsize • Gale Technologies • Joyent SmartDataCenter • Linode • OpSource • Rackspace • Skytap • Verizon Terremark • Virtustream xStream
  43. 43. Unify management across on-prem and hosted clouds • AccelOps APM & SIEM • Cloupia Unified Infrastructure Controller • Convirture ConVirt • Ensim Unify Cloud Manager • enStratus • FluidOps eCloud Manager • FreedomOSS vNOC • Kaavo IMOD • RightScale Cloud Management Platform • ScaleXtreme Xpert & Xpress • Tap In Systems Cloud Management Service • VMTurbo Cloud Operations Manager • ZenOSS Service Dynamics
  44. 44. Automate, orchestrate and interoperate between clouds • Appistry CloudIQ • Cloudsoft • Cordys • Quest Cloud Automation Platform • Red Hat DeltaCloud • rPath Cloud Engine • Parallels Automation for Cloud Infrastructure • ServiceMesh Agility Platform • Star Command Center Cloud Edition • Univa UniCloud • Verizon CloudSwitch • VMware vCloud Director & vFabric Cloud Application Platform
  45. 45. What we are hearing Red sky at night Best Execution Venue Cloudonomics Security Big Data Propaganda vs reality What could happen? Signals
  46. 46. Best Execution Venue  It’s right-tiering, like HSM and ILM for workloads  Vendors, service providers: everyone wants to be the control point  Cloud is part of multi-sourcing or ‘nth-generation’ sourcing strategies  Hosted cloud is ‘just another node’  Round-trip  Most are planning to bridge the public/private models.
  47. 47. Cloudonomics  IT cost center to IT as a service  Benchmarking against Amazon • AMI becoming a de facto standard? • VMware in the enterprise  Cost allocation - it’s a rate card  Budgeting – run wild/consumption vs allocation  Support Opex vs Capex decisions  Showback and shadow billing  Budgeting reality, depreciation  Is the organization ready?
  48. 48. New lights to shine in the hedgerow of IT  Cost Management • Big Four • Cloud Cruiser • VAlign • Apptio • VMware Digital Fuel • SatoriTech • OpSource • Aria • eVapt  Spend Management • Cloudability • CloudVertical • Raveld • Sensible Cloud • Ylastic
  49. 49. Security: a cloud enabler? “Firewalls and VPNs are like we built cities hundred of years ago with a wall around them” • Cloud turns these inside out – what’s inside and what’s outside? • Most companies have no better security than cloud • But – privacy and security remain the responsibility of the user Security as a cloud enabler: • Map levels of assurance to NIST controls • Data in motion – use ‘S’ protocol - SSH, TLS/SSL, IPSec, SFTP • Data at rest – encrypt it • Cloud providers and security – key management is the issue • Federated/admin identity? • CloudAudit within the Cloud Security Alliance (auto selection)
  50. 50. Cloud and Big Data: TBD  Cloud is a deployment option – databases as VMs or hosted services  New databases to exploit distributed, elastic environments  Google BigTable (and Megastore) and Amazon Dynamo use NoSQL – have inspired inspired Apache HBase, Apache Cassandra, Hyper- table, Voldemort, Riak and BigCouch  PaaS platforms VMware CloudFoundry and Red Hat OpenShift support NoSQL  MapReduce, BitTorrent, Dynamo inspire NewSQL databases such as NuoDB  If your data is big – your approach should be total  Total Football – Total Data
  51. 51. Propaganda vs reality  Cloudbursting  Multi-cloud strategies  Jurisdiction shopping
  52. 52. What could happen?  IT departments won’t be needed  IT costs will diminish  Less complexity  Technology will become perpetual services, not sell and forget  Dominant players will change  Incumbents will be forced into acts of desperation
  53. 53. From Playground to Production  Faster, flexibly, on more devices  New apps vs migration  In the critical path, not an extreme sport  Enterprise internal SPs: cloud will compete  April 21st/August 7th changes everything  Virtual first  cloud first?  Proxy for IT transformation  CIO: Career Is Over
  54. 54. Thank You – Questions? william.fellows@451research.com

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