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451 Research Enterprise Cloud Adoption 2012

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  • 1. Cloud Adoption in the Enterprise: From the Playground to Production William Fellows VP Research
  • 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
  • 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. 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. 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. 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. The Great Recession Consumerization of enterprise IT Service consumption “I need a cloud strategy” A Perfect Storm
  • 9. How real is it? Growth trends, market forecast
  • 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. 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. 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. Estimated 2012 Cloud Revenue Breakdown by Subsector – Total $4.3bn (220+ vendors) 46% 19% 8% 27% IaaS Storage as a Service IT Management as a Service PaaS
  • 14. IaaS Market Overview ($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 $5,631 2010 2011 2012 2013 2014 2015
  • 15. STaaS Market Overview ($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 $1,339 2010 2011 2012 2013 2014 2015
  • 16. PaaS Market Overview ($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 $3,334 2010 2011 2012 2013 2014 2015
  • 17. Cloud As-a-Service Revenue by Geography ($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. 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. 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. End user adoption
  • 21. Cloud adoption snapshot: delivery model Source: The 451 Group Cloud End User Survey 2011
  • 22. Cloud adoption snapshot: deployment model Source: The 451 Group Cloud End User Survey 2011
  • 23. Cloud adoption snapshot: drivers Source: The 451 Group Cloud End User Survey 2011
  • 24. Cloud adoption snapshot: workload Source: The 451 Group Cloud End User Survey 2011
  • 25. Cloud adoption snapshot: inhibitors Source: The 451 Group Cloud End User Survey 2011
  • 26. Enterprise IT as service provider and cloud consumer
  • 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. 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. 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. 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. Cloud is the ‘promising molecule’
  • 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. 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. 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. 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. But…  Private cloud is ring-fenced and finite  Doesn’t reproduce elasticity of hosted cloud
  • 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. 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. Cloud service broker: hybrid cloud migration Enable Host Unify Automate
  • 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. 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. 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. 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. 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. What we are hearing Red sky at night Best Execution Venue Cloudonomics Security Big Data Propaganda vs reality What could happen? Signals
  • 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. 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. 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. 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. 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. Propaganda vs reality  Cloudbursting  Multi-cloud strategies  Jurisdiction shopping
  • 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. 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. Thank You – Questions? william.fellows@451research.com