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Boston Cloud Dinner/Discussion November 2010

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  • 1. Outline
    Brief Background on the Cloud Research
    Cloud Computing Tsunami: The Wake-up Call?
    Why cloud is a disruptive innovation and the next Wave in technology
    Complexity- and Confusion-as-a-Service: Unwrapping the Maze of Cloud Options
    A working definition of the cloud
    Where’s the market today and where is it headed?
    Implications of cloud computing for customers and vendors (Business Value, Opportunities, Markets, Risks etc)
  • 2. Background on the Research Study
  • 3. Leaders In The Cloud
    Identifying the Business Value of Cloud Computing for Customers and Vendors
  • 4. About Sand Hill Group
    The business strategy destination for enterprise software executives
  • 5. About the authors
  • 6. About the authors
  • 7. Industry-leading advisory board
  • 8. Survey of 511 IT execs with McKinsey and TechWeb
  • 9. 40 confidential interviews with cloud leaders
  • 10. Cloud Computing Tsunami: The Wake-up Call?The Evolution of Cloud Computing
  • 11. Cloud Computing is….
    • A Game Changer
    • 12. The Next Big Wave in IT
    • 13. A Disruptive Technology
  • “An innovation that is disruptive allows a whole new population of consumers access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill.” – Clayton Christensen, The Innovator’s Dilemma
  • 14. Mobile Phones + Google Apps: Poor Artisans in Remote Villages of India Sell their Folk Arts on eBay
  • 15. A whole new population of consumers…
    2 Billion Internet users
    5 Billion Mobile Phones
    Interconnected Devices +
    Anytime, Anywhere Internet Access +
    Continuous Cloud-based Services
  • 16. 15
    Cloud Computing: The New Disruption
    Represents a Competitive Threat to the Incumbents
    Levels the Playing Field for small companies
  • 17. Business Drivers…
    Agility, speed, flexibility
    The rise of Business Networks
    Global Recession
    Global Commerce
  • 18. Agility: #1 driver for the move to the cloud
  • 19. Latest Study results..
  • 20. Complexity- and Confusion-as-a-Service: Unwrapping the Maze of Cloud Options and definitions
  • 21. Everyone has their own “cloud” definition
    The Cloud disruption is so large and touches so much of the industry, that people can only see the bit that affects them and hence they cast it in that light
    Vendor confuse terms and push their agendas
    Twitter Storm after Larry Ellison defines Oracle’s “cloud”
    Litmus Test: If you have to buy hardware just to get started, it is not Cloud @Werner RT @benioff Beware of the false cloud
    To get going, we will use a the following definition and debate later:
    An rapidly scalable, elastic, cost-efficient IT capability (applications, platforms, and infrastructure) delivered as a serviceover a network in a pay-per-use, on-demand self-service manner.
  • 22. NIST Definition Well Accepted
    Software as a Service (SaaS)
    Platform as a Service (PaaS)
    Infrastructure as a Service (IaaS)
    On Demand Self-Service
    Massive Scale
    Resilient Computing
    Broad Network Access
    Rapid Elasticity
    Geographic Distribution
    Service Orientation
    Resource Pooling
    Measured Service
    Source: NIST
    Low Cost Software
    Advanced Security
  • 23. And Controversies Abound….
  • 24. Where’s the market today?What’s the outlook for the next 3 years?
  • 25. Cloud Feels Like 1997 for the Internet
    Large Potential
    Huge Market
    • New Technology
  • 26. Analysts Forecast a healthy CAGR
  • 27. When will the Tipping point occur?
  • 28. Bold Predictions
    “I think, in three years, the industry will get to 40 percent in the cloud. In five years and beyond, it could get to 70 percent.” – CIO, major software vendor
  • 29. 2014: A possible tipping point
    Source: Saugatech Research, 2010
  • 30. Cloud investments set to increase..
  • 31. Cloud Reality is Catching The Hype
    Some SMB’s have 80% of services in the cloud
    “Compared to what we were doing before, the cloud is a giant bed of roses.” – CIO, business services company
  • 32. Implications for Customers and Vendors
  • 33. Infrastructure: The Change
  • 34. Assembly Line IT
  • 35. Robotics Factory IT
  • 36. 35
    Pendulum swinging back to the CIO and the IT department
    • Developers using Public IaaS services under the Radar
    • 37. Business buying direct from Cloud vendors
    • 38. Governance, operational, expenses, and security issues
    • 39. CFO, CIO and IT under pressure to rationalize
  • SaaS evolution
    Wave1: 2001-2006: Cost-effective Software Delivery
    Single/Standalone/point solution: function-specific, entry-level (CRM, Conferencing, Project Mgt, Collaboration etc)
    Challenges: Business Bypassed IT, Governance/security issues, Integration demands, Business Process Orchestration
    Wave2: 2006:2010: Integrated Business solutions
    New wave of integration products (Informatica, Pervasive, Boomi (Now Dell), Cast Iron (now IBM)
    Inter-SaaS Linking (Intaact & SalesForce Data transfer)
    Opportunities: Web-Services based Integration API’s, Customization by VAR’s and SI’s
  • 40. SaaS evolution (contd..)
    • Wave 3: 2008-2013: Workflow-enabled Business Transformation
    Business process and workflow orchestration with external cloud services (outside the firewall) and on-premise services
    Inter-Enterprise Collaboration
    Opportunities: (Cloudsourcing)
    Cloud Integrators and BPM vendors for integrating business workflows: Point solutions (e.gAppirio, Bluewolf)
    Business Solution Providers can help provide holistic solutions involving multiple external SaaS solutions (e.gNetSuite, SAP, Workday, SalesForce, Google) and integration with social Websites Facebook and Twitter
    Source: Saugatuck Research, Strategic Perspectives,
    How Suite It Is – Five Points Along A Spectrum of Cloud Offerings
  • 41. Workflow-based integration & CloudSourcing
  • 42. Implications for Cloud Solution Providers
    • Wave 3 is where is industry is headed. Customers of composite solutions expect:
    • 43. Vertical domain, web integration expertise and channel
    • 44. Ongoing support of the WHOLE solution and quick turnaround service times
    • 45. Transparency of solution performance
    • 46. Holistic SLA agreements (not just for one link in the chain)
    • 47. Challenge: Weakest link
    • 48. Understand the customer’s legacy burden and provide secure hybrid architectural extensions to minimize disruption to installed base
  • 49. Business Model Implications of SaaS
    • Revenue model is very different
    • 50. Up-front License model to recurring subscription model.
    • 51. Slower GAAP Revenues
    • 52. Major Impact on Sales
    • 53. Smaller deal sizes
    • 54. Relationship vs transactional selling model
    • 55. Marketing Role change
    • 56. Help reduce sales cycle
    • 57. Lead Qualification more than Lead generation
    • 58. Channel Model change
    • 59. High-value, business process, and implementation skills
    • 60. Operations
    • 61. TCO , SLA, security, Infrastructure, Support is on you
    • 62. Traditional packaged software vendors lack operations skills
  • 63. Large/Small Company Perspectives
    “I firmly believe that my data is safer in [the cloud vendor’s] hands than it is in mine” – SMB CIO
  • 64. What is PaaS?
    Services to develop, collaborate, integrate, test, deploy, host and maintain applications [ideally] in the same integrated development environment
    Ideal PaaS is built upon:
    Infrastructure-as-a-Service Layer
    Middleware layer (APIs’, run-time support, glue that cements the different pieces)
    Development Layer (tools, debuggers, IDE’s etc)
  • 65. PaaS will be the future of cloud services
    So while much of cloud computing’s success today comes from the simple metaphors we’ve used to describe it, we have to avoid being trapped by those metaphors. EC2 is not AWS; clouds are not machines. It’s the surrounding ecosystem that matters, and we ignore it at our peril – Alistair Croll
    Platform Services help create an ecosystem for even greater innovations, simplicity, and cost efficiencies
  • 66. PaaS Network Effect
  • 67. PaaS is sweet spot
    • The real value is in the Applications and Data
    • 68. PaaS enables Cloud Development and infrastructure abstraction further blurring the boundary between Infra and apps
    • 69. SaaS customers want extensions and configurability
    • 70. All Major Cloud Players “moving up the stack” (AWS, VMWare, Oracle, HP)
    • 71. IaaS will be commodity
    • 72. Lock-in is a big concern for customer
  • But it’s still very early for PaaS
  • 73. Workloads in the cloud
  • 74. Public Vs Private
    • Compelling economics of public cloud. On-demand capacity for workloads that are
    • 75. “Spiky”, seasonal, short-term, commodity, non-core applications
    • 76. Mission-critical apps have to stay in the datacenter
    • 77. Security, Compliance, and Control
    • 78. Massive Investments in legacy Infrastructure
    • 79. Long-term contracts for datacenter space and vendor relationships
    • 80. Cost of re-architecture and cloud migration
    • 81. No one-size fits all solution: Multiple cloud services to meet business, security, SLA needs
    • 82. Potential Risk: Weakest link
  • 83. Workloads For Hybrid Clouds
    Web-Serving Workloads: Many permutations
    Scale the front-end web servers in the cloud, leave logic processing and data-base in-house
    Load balancers, CDN in-house. Rest in the Cloud
    Run internally for normal loads, burst out for seasonal peak demands
    Highly parallelized massive data analytics (MapReduce, Hadoop style processing) in the cloud and logic processing inside
    Hybrid Storage and Retrieval: Augment high-bandwidth on-premise storage with less frequently accessed Cloud storage. Backup, archival, DR. Single Management solution
  • 84. Workloads For Hybrid Clouds – Contd..
    Development and QA
    Multiple cloud environments for development, test, load, stress, scalability, and build. Create and tear down only as needed
    Move from cloud to data center or vice versa at various stages of the Application Lifecycle Management (ALM).
    Hybrid workflows across SaaS applications and services and data inside the data center.
    SaaS CRM application reaching out to an ERP system for access to financial data.
    Application running on public cloud accessing DNS on-premise
    Collaboration infrastructure (Wiki’s, project boards etc)
  • 85. Several customer concerns, but responsibility is shifting to the vendors
  • 86. More Information, Assistance, and Offers
    Opinion Editorial on SandHill.com
    Weekly Blog on cloud trends, vendors, customers, people, and solutions
    Purchase Digital Enterprise License of research: Unlimited Internal Use:
    Additional Go-to-market and lead generation:
    Customer webinars and events
    Co-branded whitepapers, podcasts, and marketing collateral
    Sales enablement and briefing sessions
  • 87. Cloud Thought Leadership…
    Industry Analysis, Blogs, Workshops, Strategy Consulting
  • 88. Cloud Thought Leadership (contd…)
    Opinion Editorials
  • 89. Sample Research Customers and Consulting Clients
  • 90.
  • 91. November 2010
    Achieving Technology Leadership in the Cloud
  • 92. Offshore Product Development Established 2001
    60+ Client Labs in 5 locations throughout India and Eastern Europe
    Multi-shore development model
    2,500 talented resources delivering 1,000 software releases per year
    Best Practices from every engagement are institutionalized through the Ness Tech Council and applied to new clients through Strategic Consulting
    Ness developed SMART Platform implements best practices workflow and metrics through unique value-added IP
    Ness Software Product Labs
    Engineering Effectiveness
  • 93. NIST (National Institute of Standards and Technology) defines cloud computing as a "a pay-per-use model for enabling available, convenient, on-demand network access to a shared pool of configurable computing resources — for example, networks, servers, storage, applications, services — that can be rapidly provisioned and released with minimal management effort or service provider interaction".
    Cloud Computing Defined
  • 94. It’s Very Cloudy Out There
    Disaster Management
    Cloud Services
    QA Cloud
    Hybrid Cloud
    Global Delivery
    Private Cloud
    Open Source
    Data Management
    Cloud Broker
    Quality of Service
    Platform Cloud
    Data Clouds
    Regulatory Compliance
  • 95. Options, Options, Options
  • 96. Ness Cloud Assessment Clears the Air
  • 97. State of the Public Cloud: The Cloud Adopters' Perspective
    October 2010 Appirio study focused on existing cloud adopters
    While basic challenges like security and manageability remain at the top of the list, new challenges around cloud-to-cloud integration, SaaS silos and mobile access are also a priority.
    • 75%+ say cloud-to-cloud integration and better mobile access are important priorities (more than 80% still say security and manageability are priorities)
    • 98. 65% say enhancing existing cloud apps is a high or essential relative priority
    • 99. Only 4% have fully integrated their cloud applications with each other
  • 100. What kind of technology does your product use? Java, C++, J2EE, .Net?
    Application Server, DB, 3rd Party Components, Open Source, Etc
    Tell us about the commercial products that you use to build your product? (what license fees do you pay??)
    What kind of architecture does your product have – 2 tier, n tier?
    Multi-tenant support
    International support (Unicode, multi-currency)
    Security / regulatory requirements? http://www.cloudsecurityalliance.org/csaguide.pdf
    Geographic distribution requirements?
    Performance / SLA requirements?
    Integration needs – cloud to cloud, cloud to client, hybrid cloud?
    Implementation requirements?
    Competitive environment and customer expectations
    Technology acquisition strategy
    Some Critical Cloud Considerations
    Where to Begin
  • 101. Ness Cloud Assessment Summary
    Cloud computing offers significant tangible benefits*
    ROI – Clients report 50% - 200% reduced costs
    Speed – Deliver applications in weeks, not months
    Innovation – Quickly design, develop and deploy many applications.
    Low investment makes it easy to walk away from failing efforts
    Significant considerations
    What do you need / want from the cloud?
    Business risk in moving / not moving to the Cloud
    Current technology position to achieve objectives
    Resources available to achieve objectives
    Next Steps
    Leverage Ness Cloud Readiness Assessment
    Meet with Ness Strategic Consulting
    Determine scope
    Identify stakeholders
    Conduct Assessment and create plan of action
    *Courtesy of Sandhill Inc 2010
  • 102. Q & A
    Thank You