Opportunities in Cloud COMPUTING<br />Investment Thesis & Market Map | Rei Kasai | Q3 2010 | reikasai@gmail.com<br />Sourc...
CLOUD COMPUTING IS THE DELIVERY OF APPLICATIONS OVER THE INTERNET<br />CLOUD COMPUTING IS NOT NEW… DO YOU REMEMBER ASPS?<b...
HOW IS CLOUD DIFFERENT THAN ASPS AND WHY IS IT IMPORTANT?<br />IT WILL FINALLY BE ABLE TO CONSUME TECHNOLOGY SIMILAR TO HO...
Solution-packaged – a “turnkey” offering, integrates required resources
Self-service  – admin, provisioning; may require some “on-boarding” support
Elastic scaling – dynamic and fine-grained
Use-based pricing – supported by service metering
Accessible via the Internet/IP – ubiquitous (authorized) network access
Standard UI technologies – browsers, RIA clients and underlying technologies
Published service interface/API – e.g., web services APIs</li></ul>-IDC<br />Source: Lone Wolf Librarian<br />Source: IDC,...
THE MATURATION AND ADOPTION OF VIRTUALIZATION HAS ENABLED CLOUD TO FINALLY EMERGE<br />CLOUD COMPUTING IS FINALLY TOP OF M...
HOWEVER, MAINSTREAM ADOPTION IS STILL SEVERAL YEARS OUT…<br />PER GARTNER’S 2010 EMERGING TECHNOLOGIES HYPE CYCLE ANALYSIS...
GOOG & MSFT ARE THE ONLY ONES THAT HAVE OFFERINGS IN ALL THREE CATEGORIES OF THE CLOUD<br />MERRILL LYNCH HAS IDENTIFIED T...
Cloud Applications(SaaS)<br /><ul><li>Provide business and consumer applications that are  provided on-Demand (The applica...
E.g. Salesforce.com  and Google Mail (subsidized through Ads)</li></ul>Cloud Platform Services(PaaS)<br /><ul><li>Provide ...
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Opportunities in Cloud Computing Q3 2010

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Market map and investment thesis in cloud computing. Overview of market and identification of start-ups in cloud computing.

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Opportunities in Cloud Computing Q3 2010

  1. 1. Opportunities in Cloud COMPUTING<br />Investment Thesis & Market Map | Rei Kasai | Q3 2010 | reikasai@gmail.com<br />Source: Flickr.com/COTE<br />
  2. 2. CLOUD COMPUTING IS THE DELIVERY OF APPLICATIONS OVER THE INTERNET<br />CLOUD COMPUTING IS NOT NEW… DO YOU REMEMBER ASPS?<br />RK Consulting<br />Cloud Computing is Internet-based computing for both Enterprise and Consumer markets, whereby software and information are provided to computers and other devices on-demand, like a public utility. –Wikipedia<br />Source: Wikipedia, Forrester<br />
  3. 3. HOW IS CLOUD DIFFERENT THAN ASPS AND WHY IS IT IMPORTANT?<br />IT WILL FINALLY BE ABLE TO CONSUME TECHNOLOGY SIMILAR TO HOW THEY CONSUME ELECTRICITY FROM UTILITIES, ON A PAY-AS-YOU USE BASIS THEREBY ELIMINATING LARGE CAPITAL EXPENDITURES<br />Cloud computing comes into focus only when you think about what IT always needs: a way to increase capacity or add capabilities on the fly without investing in new infrastructure, training new personnel, or licensing new software. -Infoworld<br />RK Consulting<br />Key Attributes:<br /><ul><li>Shared, standard service – built for a market (public), not a single customer
  4. 4. Solution-packaged – a “turnkey” offering, integrates required resources
  5. 5. Self-service – admin, provisioning; may require some “on-boarding” support
  6. 6. Elastic scaling – dynamic and fine-grained
  7. 7. Use-based pricing – supported by service metering
  8. 8. Accessible via the Internet/IP – ubiquitous (authorized) network access
  9. 9. Standard UI technologies – browsers, RIA clients and underlying technologies
  10. 10. Published service interface/API – e.g., web services APIs</li></ul>-IDC<br />Source: Lone Wolf Librarian<br />Source: IDC, Infoworld, Lone Wolf Librarian<br />
  11. 11. THE MATURATION AND ADOPTION OF VIRTUALIZATION HAS ENABLED CLOUD TO FINALLY EMERGE<br />CLOUD COMPUTING IS FINALLY TOP OF MIND OF CIOS<br />RK Consulting<br />Source: Gartner, Adapted from http://www.flickr.com/photos/mobian/3426349990/<br />
  12. 12. HOWEVER, MAINSTREAM ADOPTION IS STILL SEVERAL YEARS OUT…<br />PER GARTNER’S 2010 EMERGING TECHNOLOGIES HYPE CYCLE ANALYSIS, CLOUD IS CURRENTLY “IN THE PEAK OF INFLATED EXPECTATIONS.”= 2 TO 5 YEARS FROM MAINSTREAM ADOPTION<br />RK Consulting<br />Cloud Computing in 2008 (First Time on Hype Cycle)<br />Source: Gartner<br />
  13. 13. GOOG & MSFT ARE THE ONLY ONES THAT HAVE OFFERINGS IN ALL THREE CATEGORIES OF THE CLOUD<br />MERRILL LYNCH HAS IDENTIFIED THE FOLLOWING DOZEN WITH A STRATEGY TO PARTICIAPTE IN CLOUD COMPUTING<br />RK Consulting<br />The overall Cloud market is a multi-billion dollar opportunity. IDC and Merrill forecast the TAM in 2013 to be approximately $44B and $108B respectively, which equals approximately 10% to 12% of total IT spend.<br />Infrastructure<br />SaaS<br />Platform<br />Source: IDC, Merrill Lynch<br />
  14. 14. Cloud Applications(SaaS)<br /><ul><li>Provide business and consumer applications that are provided on-Demand (The application is paid for on a subscription basis and the software is hosted by the vendor and accessed by the customer through the web).
  15. 15. E.g. Salesforce.com and Google Mail (subsidized through Ads)</li></ul>Cloud Platform Services(PaaS)<br /><ul><li>Provide a set of capabilities exposed as services to help develop and deliver new cloud applications by partners or customers
  16. 16. E.g. Microsoft Windows Azure</li></ul>Cloud Infrastructure Services(IaaS)<br /><ul><li>Provide the physical capacity for Cloud computing as a set of virtual hardware resources(i.e. compute, storage, and network)
  17. 17. Manage those resources based on scalability and availability needs
  18. 18. E.g. Amazon S3</li></ul>THE CATEGORIES OF CLOUD IN MORE DETAIL…<br />RK Consulting<br />Source: Coord, Merrill Lynch<br />
  19. 19. WHILE TAM ESTIMATES DRAMATICALLY RANGE FROM $44B TO $108B BY IDC AND MERRILL RESPECTIVELY, BOTH AGREE THAT SAAS WILL BE THE LARGEST PIECE OF THE CLOUD PIE<br />TAM ESTIMATES BY CLOUD CATEGORY IN 2013<br />RK Consulting<br />Source: IDC, Merrill Lynch<br />
  20. 20. CIOS ARE MOVING MISSION CRITICAL APPLICATIONS TO THE CLOUD PER IDC<br />RK Consulting<br />67.3%<br />Collaboration applications<br />66.9%<br />Web applications/Web serving<br />59.4%<br />Data Back-up or Archive services<br />55.6%<br />Business apps (CRM, HR, ERP)<br />55.1%<br />Personal productivity apps<br />54.8%<br />Data/Content Distribution services<br />52.9%<br />Storage capacity on demand<br />51.3%<br />IT Management software<br />50.6%<br />Server capacity on demand<br />49.8%<br />Business Intelligence/Analytics<br />49.1%<br />Application dev/test/deploy platform<br />48.6%<br />IT/Information Security<br />0%<br />10%<br />20%<br />30%<br />40%<br />50%<br />60%<br />70%<br />80%<br />Q: Rate your likelihood to pursue the cloud model for the following<br />(Scale: 1 = Very Unlikely 5 = Very Likely)<br />Source: IDC Enterprise Panel, 3Q09, n = 263, September 2009<br />
  21. 21. PAIN POINTS OF CIOS = OPPORTUNITIES IN CLOUD<br />RK Consulting<br />87.5%<br />Security<br />83.3%<br />Availability<br />82.9%<br />Performance<br />81.0%<br />On-demand paym’t model may cost more<br />80.2%<br />Lack of interoperability standards<br />79.8%<br />Bringing back in-house may be difficult<br />76.8%<br />Hard to integrate with in-house IT<br />76.0%<br />Not enough ability to customize<br />0%<br />10%<br />20%<br />30%<br />40%<br />50%<br />60%<br />70%<br />80%<br />90%<br />Q: Rate the challenges/issues of the 'cloud'/on-demand model <br />Source: IDC Enterprise Panel, 3Q09, n = 263, September 2009<br />
  22. 22. <ul><li>Large enterprises are building their own private clouds to resolve the security problems</li></ul>•Coding & development skills will take a back seat to project management, quality assurance testing, business analysis, and other high-level abstraction thinking<br />•IT departments will shrink as users go directly to the cloud for IT resources<br />•Cloud computing providers will support information security as if banks secure money<br />•Small-sized to medium-sized businesses as well as large enterprises will be run on the cloud<br />•The browser will be all the desktop software you need<br />•Game services will be one of the most interesting applications of Cloud Computing<br />FUTURE OUTLOOK<br />RK Consulting<br />Source: Focus Research<br />
  23. 23. <ul><li>Opportunities:
  24. 24. Help enterprise adopt cloud
  25. 25. Drive operational expenses for cloud down</li></ul>OPPORTUNITIES IN INFRASTRUCTURE SEGMENT<br />RK Consulting<br />Source: RK Consulting<br />
  26. 26. <ul><li>One of cloud’s strengths is ability to scale and process data efficiently, which is perfect for analytics. Challenge is integration and security
  27. 27. Opportunities are:
  28. 28. Help adopt BI in the cloud
  29. 29. Integrate enterprise/private data better with the cloud
  30. 30. Compliance- Moving data outside the firewall and into the cloud requires new processes to ensure data is not compromised
  31. 31. Security management- Distributed cloud environment is a nightmare for IT admins. </li></ul>OPPORTUNITIES IN PLATFORM SEGMENT<br />RK Consulting<br />Source: RK Consulting<br />
  32. 32. <ul><li>Opportunities are:
  33. 33. Collaboration/social services to augment existing enterprise products
  34. 34. Billing/monetization services for SaaS/Cloud services</li></ul>OPPORTUNITIES IN SOFTWARE SEGMENT<br />RK Consulting<br />Source: RK Consulting<br />
  35. 35. RK Consulting<br /><ul><li>Venture Advisor for Sierra Ventures, VC-firm with $1.5B under management
  36. 36. Focus on early-stage mobile and cloud technologies
  37. 37. 8+ years of mobile, 11+ in software
  38. 38. M&A strategy for a mobile payments venture
  39. 39. BD and Product leader for Dexterra, a multi-OS (iOS, Symbian, RIM, and Windows Mobile) mobile applications platform for carriers and ISVs
  40. 40. Customer development for Net6 (Acquired by Citrix for $50M in 2002), a mobile internet platform for consumer internet
  41. 41. IT Consulting for Octane Software (Acquired by E.piphany for $3.2B in 1999), first internet-based CRM software for enterprise
  42. 42. UC Berkeley-Haas MBA
  43. 43. Contact info: reikasai@gmail.com, www.linkedin.com/in/reikasai</li></ul>REI KASAI<br />
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