Enterprise Cloud Myth(s)

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Randy Bias, Co-Founder & CTO, of Cloudscaling on the myth of "Enterprise Clouds".

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Enterprise Cloud Myth(s)

  1. Enterprise Cloud MythsRandy Bias @randybiasMarch 8th @cloudscalingCloud Connect 2011
  2. Are Enterprise (IaaS) Clouds a Mistake? Public or Private Clouds Built in the ‘Enterprise’ style
  3. The Myth“We need Enterprise Clouds because ...”
  4. The Myth ContinuedEnterprises need more ... FUD??
  5. The Fundamental Assumption in the Myth vs. Legacy Apps Greenfield Apps
  6. Enterprises Love Commodity Clouds
  7. There Are Two Battles WagingCommodity CloudsEnterprise Clouds
  8. The Battle LinesPublic vs. PublicPublic vs. Private
  9. The Error in Cloud as “Outsourcing” vs. Public Private vs.Where are the cost savings? “multi-tenancy?”
  10. The Enterprise ‘No Clothes’ Moment ...Where is the enterprise cloud business model equivalent of Amazon Web Services?
  11. The Amazon Model is Winning$1.0B$0.5B $0B 2007 2008 2009 2010 2011 $300M $150M $0M 2009 2010 2011 2007 2008 Source: Public estimates from Cloudscaling/UBS & RAX earnings statements
  12. AWS 5-year Projected Revenue at 100-50% CAGR$11B $8B $6B $3B $0B 2009 2010 2011 2012 2013 2014 2015 2016 Source: Public estimates from Cloudscaling & UBS + Cloudscaling estimates
  13. AWS Growth & Momentum is Staggering S3 Published Growth Numbers 700B 655 525B 350B 175B 262 102 0B 3 14 40 Q4’06 Q4’07 Q4’08 Q4’09 Q4’10 Q4’11 Source: Public AWS blog & PR announcements
  14. The Starkest Example Possible (‘Private’ Hosting vs. Public Cloud) Q/Q % growth rates 40% 30% 20% 10% 0%Q4’08 Q1’09 Q2’09 Q3’09 -10% Q4’09 Q1’10 Q2’10 Q3’10 Q4’10 RAX Cloud RAX HostingSource: Public RAX earnings statements
  15. Commodity Cloud as % RAX Total Revenue 20% 13% 7% 0% 2007 2008 2009 2010 2011Source: Public RAX earnings statements
  16. The Punchline?Enterprise Clouds Have Greatest Investment $30B $23B $15B $8B $0B 2009 2010 2011 2012 2013 Commodity Cloud Enterprise Cloud Source: Cloudscaling estimates based on public data (conservative)
  17. What’s Different About Commodity?Attribute Commodity EnterpriseH/W Cost OptimizationHomogeneous &standardizedDesign-for-FailureSelf-service, low frictionScale EngineeringOpen SourceCloud-oriented Biz Model
  18. Initial Capital Expense: Enterprise vs. Commodity Cloud $1,892 $2,000H/W Cost per $1,500Sellable‘VMU’ (1GB $1,000RAM, 1 vCore) $500 Commodity $225 Enterprise $0 Source: Cloudscaling confidential financial models for IaaS clouds
  19. Labor Operational Expense Enterprise (300:1) vs. Commodity Cloud (1500:1) Servers : IT Headcount $150M $113M $75M $38M $0MYear 1 Year 2 Year 3 Year 4 Year 5 Commodity Enterprise Source: Cloudscaling estimates based on known IaaS deployments
  20. The Evidence Suggests ...Go CommodityServe Greenfield “Cloud-ready” appsEmbrace the Change

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