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How big is the cloud in Australia?
 

How big is the cloud in Australia?

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Presentation on the market size of the cloud in Australia

Presentation on the market size of the cloud in Australia

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  • This is a lot of change to consider but there is yet another disruptive dimension as well – we mentioned the increase in mobile computing users – among humans, but we also need to recognize that in terms of overall computing and communications volume, there is a major transformation taking place related to the rise of virtualization, smart meters and embedded computing. The numbers you can see on this slide – which are estimates for 2010 are pretty staggering. (read a couple of data points)But it is the one on the bottom right hand corner you really need to consider – 7 billion communicating devices and 5 billion are not computers
  • We expect many organizations will end up with hybrid environments where they opt to use public services for some functions, where the public nature and global reach of the business make sense, but will rely on internal private cloud architectures for critical business activities.
  • Definition: Subscription to and usage of Cloud Services that are delivered over a virtual private network, where a private instance of the service is based on a common virtual infrastructure model, and wherein an integrated SLA with business relevant metrics is offered.Building blocks of the evolutionary component of the cloud + disruptive attributes
  • The hosting business is being transformed by cloud computing, new entrants can offer attractive new services and the market continues to evolve.Cloud impacts the economics of model of hosting in key ways:more difficult capacity management and potentially lower returns on invested capital;challenges in analyzing deal profitability and a shift in how to achieve good margins in managed hosting;uncertain software licensing costs; andincreased unpredictability of revenue.Service providers must determine how to meet the new technical and business challenges, identify the products that can be sold now, market successfully to early adopters, and create a foundation for future products and mainstream adoption.New offerings are emerging to compete with traditional hosting services, eg: utility hosting, virtual data center hosting, cloud hosting, and platform as a service (PaaS).The initial challenges of cloud evolution are centered on installation and provisioning. These are business challenges, not just technical challenges, requiring process and system integration across the service provider organization.The early adopters of cloud infrastructure services are existing hosting customers, Web 2.0 startups, research organizations and Type "A" enterprises. Mainstream adoption will require decreasing the real and perceived risks of moving operations into the cloud.RecommendationsFocus on fully automating sales quotes and provisioning, and driving down quote and installation times. Immediately offer utility hosting. Even if you are not prepared to offer a virtualized platform, you must offer flexible pricing, or you will be at a severe competitive disadvantage.If you do not have virtualization expertise, consider acquiring a small provider of cloud hosting services with strong engineering expertise and tools for managing a shared, virtualized platform.Include complementary network services that enhance remotely hosted services, such as WAN optimization or an application delivery network.
  • DEFINTIONSAll dollars expressed in AUD for 2010 and Cumulative Annual Growth References 2014IDC SourceWorldwide and Regional Public IT Cloud Services 2010-2014 Forecast IDC #223549 June 2010IDC Source Australia Cloud Services 2010-2014 Forecast Analysis IDC ##AU2577407S July 2010 CAGR%Exchange Rate AUD/USD 0.90IDC definition Secondary Market Segments and SaaS, PaaS, IaastaxomonyAaaS = SaaSCollaborative Applications, Content Applications, Enterprise Resource Management Applications, Supply Chain Management Applications, Operations & Manufacturing Applications, Engineering Applications, Customer Relationship Management Applications, Application Management, Hosted Application ManagementPaaSApplication Development Software, Application Server Middleware, Data Access, Analysis, and Delivery, Information & Data Management, Integration & Process Automation Middleware, Other Application Dev and Deployment, Quality & Life-Cycle Tools, Enterprise PortalsIaaSSystem and Network Management Software, Security Software, Storage Software, System Software, Servers, Storage, Networks, Clients, Hosted Infrastructure Services
  • Promote the upcoming cloud sessions if relevant as a call to action
  • Promote the upcoming cloud sessions if relevant as a call to action

How big is the cloud in Australia? How big is the cloud in Australia? Presentation Transcript

  • HOW BIG IS THE CLOUD?
    PHILIP GOLDIE, Director, Server & Tools
    OSCAR TRIMBOLI, Director, Information Worker
    LINUS LAI, Associate Director, IDC
    #apc2010
    @philgoldie
    @oscartr
  • …how big is the opportunity?
    …where is the opportunity?
    …how do I capture the opportunity?
  • The Cloud and You:New Delivery Models Bring New Opportunities
    Linus Lai
    IDC Australia
  • Agenda
    5
  • 6
  • The “New Normal”
    Q. Prioritize the following business goals as they relate to your organization by allocating 100 points among them. The more points you allocate, the more important the business goal.
    • Business priorities are quickly returning to pre-recession status
    • Refocusing on “doing the right thing” again, not the least expensive
    • For customers
    • For shareholders
    • For competitive advantage
    • Efficiency still matters, but not if it impacts business performance
    • Availability
    • Flexibility
    Source: IDC Server Virtualization MCS 2007, 2008, 2009; IDC Datacenter and Cloud Survey 2010
  • Recovery and Transformation
    Key Market Transformations
    Telecom – fiber, 3G/4G wireless, converged IP delivery, new distribution models
    IT – market expansion through disruptive Cloud model, driving re-architecture of vendor models, offerings, identities
    Ascendance of mobile devices – and apps – challenging primacy of the PC
    Shift of customer “design point” toward SMB/consumer, emerging markets
    8
  • 2010: Intelligent Economy Emerging
    1 billion mobile Internet users; 500,000 mobile phone apps
    700 million social networkers
    630 million laptops; 80 million netbooks
    1.2 billion mobile phones; 220 million smart phones
    9
    Public cloud spending $23 B
    50 million servers, half virtual
    20 million smart meters in US
    7 billion communicating devices in place – 5 billion of these are NOT computers
  • 10
  • What is Cloud Computing Today?
    The Future
    High Security Cloud
    Cloud services are consumer and business products, services and solutions delivered and consumed in real-time over the Internet
    They have the following key attributes
    • Shared
    • Self-service
    • Elastic
    • Usage-based pricing
    High Availability Cloud
    Today
    Multi PurposeClouds
    Test & Dev Cloud
    HPC
    Cloud
    Low Cost
    Cloud
    Comms Cloud
    11
  • Three Basic Layers of the Cloud
    Workloads
    Platforms
    ERP
    email
    CRM
    OLTP
    Collaborative
    Decision Support
    Web
    App. Dev.
    Streaming
    Security
    Caching
    Networking
    File
    Sys Mgmt
    Technical
    Server
    Storage
    Network
    IT Cloud Services
    Cloud Applications
    Software as a Service (SaaS)
    Cloud Platform
    Platform as a Service (PaaS)
    Cloud Infrastructure
    Infrastructure Services (IaaS)
    12
  • Cloud Market Will Win More of Australia ICT Spend
    9.4%
    Proportion of total
    AUD million
    Cloud services will not replace traditional delivery models in all situations
    Though cloud is not a large part of the overall spend, it’s growing much faster
    This rapid growth is attractive & causing new entrants to emerge, and non-traditional IT vendors to pay attention
    The age of influence for the product vendors is waning
    22.5%
    CAGR growth to 2014
    5.5%
    * DC spend is categorised by server/storage hardware and software
    13
  • Uncertainty About Cloud is Dissolving
    • In 12 months, cynicism about cloud computing has nearly disappeared
    • Clear that cloud computing alternatives will be considered for application upgrade and replacement
    Source: IDC Cloud Computing Survey, April 2010 (N=600 in Aust, Korea, India, S’pore, PRC & HK)
    14
  • Various Deployment Models EmergingHosted & Outsourced
    Outsourced Enterprise
    Data Center
    Enterprise
    Data Center
    Hosted Infrastructure & Applications
    SaaS, IaaS & PaaS
    Hosted and managed by the internal IT department
    Hosted and managed by an external service provider on a ‘1:many’ basis. Pricing model can be fixed.
    Public Cloud services delivered over the internet based on a ‘pure’ utility pricing model
    Hosted and managed by an external service provider on a 1:1 basis
    15
  • Various Deployment Models EmergingThe Virtual Private Cloud
    Outsourced Enterprise
    Data Center
    Enterprise
    Data Center
    Virtual Private Cloud
    Hosted Infrastructure & Applications
    SaaS, IaaS & PaaS
    Leveraging the Public Cloud attributes within the network perimeter
    Hosted and managed by the internal IT department
    Hosted and managed by an external service provider on a ‘1:many’ basis. Pricing model can be fixed.
    Public Cloud services delivered over the internet based on a ‘pure’ utility pricing model
    Hosted and managed by an external service provider on a 1:1 basis
    16
  • Customer Focus on Private Clouds
    2011 will be a big year for "private clouds"…:
    Why?
    • Continued concerns about cloud security, availability and performance
    • Ongoing drive to maximize return on existing IT assets
    • 2010 has been a big year for the announcement of "private cloud" offerings from virtually all major IT suppliers
    • Clouds typically package infrastructure, platforms and applications together so…
    • Private cloud announcements will drive many strategic partnerships, joint ventures and acquisitions/mergers.
    17
  • Workloads in the Cloud - Australia
    18
  • Not All Applications are Suitable
    High
    Low
    Readiness Factor
    Where to Start?
    Storage as a Service
    • Backup/Restore Solutions
    • Information archival
    • Data intensive workloads
    Established packaged offerings
    • e-mail
    • Collaboration
    Batch processing
    Pre-production systems
    • Software development
    • Test
    Sensitive data
    • Employee Information
    • Medical Records
    3rd party software which:
    • Does not have a virtualization or Cloud aware licensing strategy
    Chargeback or utilization not enabled
    Requires Mass Customization
    • High auditability & accountability
    • Subject to Sarbanes-Oxley
    • IFRS
    • JSOX
    19
    19
  • Mapping the Journey:Private Cloud Adoption Rates
    • A workload focus allows a cloud strategy to be built
    • Consider the Cloud as an extension of your sourcing strategy, not a technology
    • Building IT services in the Cloud is a long journey, comprised of many steps
    • Honest appraisal may reveal that enterprises cannot complete the journey on your own
    • Selective use of public cloud services, external private clouds and cloud appliances along with existing delivery models will become the norm by 2015
    20
  • 21
  • Impact of the CloudThe Channel Viewpoint
    Do you view cloud computing as:
    The majority of channels view the cloud as an interesting emerging model – and realize that it is redefining the channel ecosystem and their business model. Importantly, 1 in 2 see it as an opportunity.
    Source: IDC PartnerConnect Quick Poll (April 2010)
    22
  • The Move Towards ServicesImpact of the Cloud
    Do you currently/plan to offer cloud computing professional or consulting services?
    Cloud is a highly consultative engagement with high professional services attach and it promotes channel transition to services oriented business model.
    Source: IDC PartnerConnect Quick Poll (April 2010)
    23
  • Channel Partners in Asia/Pacific IDC Partner Segmentation Model
    24
  • Understanding if current Architecture (Infrastructure and Applications) is ready for Private/Hybrid Cloud
    Migrating to a Cloud Architecture
    Securing Converged IT Department Skill Sets
    Defining Provisioning Policies when Migrating to Private Cloud
    Defining Policies for Deploying Workloads in a Hybrid Environment
    Charging Line of Business for Virtual Assets
    Private Cloud ImplicationsWhat Activities will End-Users struggle with?
    25
  • Cloud ImplicationsOpportunities Require a New Mix of Skill Sets
    26
  • Potential Go-to-Market ModelBlended Consulting & Integration Services
    Access to Vendor/Partner Developed Knowledge Base
    • A number of product (h/w & s/w) vendors are building out consulting capabilities to get their brand in front of the CIO
    • However, the right skills are in short supply, so partners can and will play an important role
    • Go-to-market conflict needs to mitigated and customer demand will be critical
    Vendor
    Service Delivery
    Sub-contracted
    Partners
    Full Service Enabled Partners
    Vendor Account Management
    Customer
    27
  • Adapt or Vanish:Hosting and Managed Infrastructure Services
    Both hosting and managed infrastructure services remain viable business models,
    However, it will be essential to transition delivery models to use cloud computing
    The profitability of managed infrastructure offerings will rapidly erode as new players enter the market with cloud-based models
    28
  • Channel Partners in Asia/Pacific IDC Partner Segmentation Model
    29
  • Potential Go-to-Market ModelPartnering to Deliver Applications via the Cloud
    International ISVs (e.g. SAP)
    Cloud Datacenter Providers, Telcos, Larger SIs with Cloud Datacenter Resources
    Local ISVs
    Platform as a Service Players (e.g. Force.com and Azure)
    Internationally Delivered Software as a Service
    Locally Delivered Software as a Service
    • Provision of a Virtualized Infrastructure for Delivery along with Customer Billing Capabilities
    • Provision of a Plug and Play Cloud Infrastructure along with a Development Platform
    • With Traditional On-Premise Licensing
    30
  • Channel Partners in Asia/Pacific IDC Partner Segmentation Model
    31
  • Three Market Models for Reselling a Public Cloud Service…
    Q. How would you prefer to be compensated for reselling the cloud service from a cloud provider?
    • Referral
    • One time referral fee paid to reseller and distributor
    • Annuity
    • A.k.a. pass through; recurring revenue
    • May include renewals
    • May include tiered programs (basic, gold, platinum, etc.)
    • White label
    • Allows partner to resell cloud service under their own brand name
    • Partner can add cloud capabilities to their other solutions and service offerings
    • Pass through business model; partner gets X% gross margin
    • Service delivered by cloud provider on cloud provider’s infrastructure
    • Partner does first level support
    • Simple Referral fees are less popular, but not out of the question
    Source: IDC PartnerConnect Quick Poll (April 2010)
    32
  • Positioning Cloud Resale for Your Partners
    Pros
    Cons
    • Ease of doing business
    • Low partner investment and risk
    • Not an annuity, no recurring revenue
    • Partner less visible in customer’s cloud planning
    • Process intensive in two-tier model
    Referral Program
    • Well understood business model
    • Annuity type recurring revenue
    • Partner maintains customer relationship
    • Cloud provider must manage for channel conflict
    • Low margin business
    • Will cloud providers see value of distributors
    Traditional VAR/Reseller Program
    • Quick entry into cloud provider market
    • Easy to integrate cloud offerings into other partner solutions
    • Partner owns the cloud brand
    • Partner assumes more risk
    • Tech support model complex
    White Label Program
    33
  • Essential Guidance for PartnersQuestions to be Addressed
    Private Cloud:
    Have you got the right in-house skills?
    Are vendors providing incentives & training for partners to develop specific skill-sets for the private cloud?
    Are you able to leverage any productized professional services through from vendors to address private cloud type of requirements?
    Do you have reasonable GTM conflict sufficiently addressed from vendors as you build out your own consulting capabilities?
    Public Cloud:
    How are you drafting commercial agreements with particular focus on SLAs?
    How are you communicating your value proposition over going direct to the vendor to your customers?
    What training and education are you receiving on the public cloud?
    What about new consulting and integration skill-sets?
    Are you involved in testing new partner programs to resell public cloud services?
    34
  • If you have additional questions, please contact me at:
    Linus Lai
    llai@idc.com
    +612 9925 2274  
    Questions?
    35
  • SaaS
    $AUD 1,622m
    CAGR 5.3%
    $AUD 70m
    CAGR 31.3%
    $AUD 274m
    CAGR 15%
    PaaS
    $AUD 121m
    CAGR 58%
    $AUD 128m
    CAGR 36%
    $AUD 1,445m
    CAGR 7.5%
    IaaS
    $AUD 54m
    CAGR 30%
    $AUD 97m
    CAGR 44%
    $AUD 1,350m
    CAGR 6.2%
    SOURCE: IDC
    PUBLIC
    ON PREMISE
    HOSTED
  • Wednesday September 1
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