Cloud is Transforming the Enterprise

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Hosting & Cloud Transformation Europe Keynote Presentation by William Fellows, VP of Research

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Cloud is Transforming the Enterprise

  1. 1. Hosting Cloud TransformationThis is New WaveWilliam Fellows, VP Research
  2. 2. © 2012 The 451 Research LLC, and/or its Affiliates. All Rights Reserved. Reproduction and distribution of thispresentation, in whole or in part, in any form without prior written permission is forbidden. The informationcontained herein has been obtained from sources believed to be reliable. 451 Research disclaims all warranties asto the accuracy, completeness or adequacy of such information. Although 451 Research may discuss legal issuesrelated to the information technology business, 451 Research does not provide legal advice or services and itsresearch should not be construed or used as such. 451 Research shall have no liability for errors, omissions orinadequacies in the information contained herein or for interpretations thereof. The reader assumes soleresponsibility for the selection of these materials to achieve its intended results. The opinions expressed hereinare subject to change without notice
  3. 3. Cloud is Transforming the Enterprise1977 and all thatCloudScapeHow real is it? Growth trends, market forecastEnd User AdoptionPrivatizationTransformation, Propaganda vs Reality, What Could Happen?New Wave
  4. 4. Never Mind the Bollocks Here’s the CloudSilver Jubilee - 1977 Punk = technical accessibility & DIY vs mainstream rock Transformed music and culture, disrupted incumbents New Wave incorporated punk ethos Embraced, enhanced - became the new mainstreamDiamond Jubilee - 2012 Cloud = technical accessibility & DIY vs mainstream IT Transforming enterprise IT culture disrupting incumbents New Wave of IT incorporating cloud ethos Embraced, enhanced – becoming the new mainstream
  5. 5. Transformation: CloudScape – Service Overview Interdisciplinary approach – 451 Research & 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. 6. Transformation: 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. 7. CloudScape Codex: 8 Cloud Attributes Programmatic Interfaces Web Management Accounting Capabilities Publically Granularity Accessible Multi- tenancy Virtualization Rapid and Provisioning Automation Scalability and Elasticity
  8. 8. DisruptionProfound economic uncertaintyDo more with lessConsumerization of ITNew models around IT-as-a-Service
  9. 9. So Where’s it Raining?Growth trends, market forecast
  10. 10. Compute Compute- as-a-Service Service Stand Alone Cloud Storage as a Service Infrastructure PaaS from SaaS Stand-Alone Alone PaaS Pre-Production/ Testing Application Lifecycle Management Management- Integration-as- Platform as a Service as-a-Service Service a-Service Cloud as-a-Service categories Problem Management Systems Network IT Management- ManagementMonitoring & Mgmt as-a-Service Service Cloud ComputingResource Utilization,Capacity Planning & Billing Online Backup Archiving Software as a Service ERP CRM Content and Collaboration
  11. 11. Cloud Market Overview – Revenue ($bn) Cloud Computing Cloud Computing + SaaS$35$30 $29.2 CAGR 25%$25 $23.1$20 $19.1 $15.2$15 $12.1 $11.0 $9.3$10 $8.3 CAGR $6.1 42% $5 $4.1 $2.7 $1.6 $0 2010 2011 2012 2013 2014 2015Source: 451 Research Market Monitor (Data Cut 3/28/12)
  12. 12. Estimated 2012 Cloud Revenue Breakdown, Including SaaS 73% IaaS PaaS 13% SaaS-Infrastruture 7% 7% SaaS-Enterprise AppsSource: 451 Research Market Monitor (Data Cut 3/28/12)
  13. 13. Estimated 2012 Cloud Revenue Breakdown by Subsector– Total $4.1bn (~220 vendors) Segment Vendor Count IaaS 89 Compute & Storage as a Service 83 Stand-Alone Cloud Storage 9 26% PaaS 74 PaaS from SaaS 11 Stand-Alone PaaS 35 Application Lifecycle Management 31 as a Service 24% 50% Pre-Production/Testing 18 Integration as a Service 13 SaaS-Infrastructure 82 IT Management as a Service 60 Problem Management 10 Systems and Network Monitoring 40 & Management Resource Utilization, Capacity IaaS PaaS SaaS-Infrastruture Planning & Billing 15 Online Backup 17 Archiving 10Source: 451 Research Market Monitor (Data Cut 3/28/12)
  14. 14. IaaS Market Overview ($m) Amazon’s market to lose 2011- 2011-2015 CAGR: 47% $5,782 $4,343 $3,143 $2,057 Amazon $1,242 Rackspace $641 Verizon Business Joyent 2010 2011 2012 2013 2014 2015 SoftLayer Technologies OthersSource: 451 Research Market Monitor (Data Cut 3/28/12)
  15. 15. PaaS Market Overview ($m) ‘PaaS from SaaS’ proving successful SaaS’ 2011- 2011-2015 CAGR: 47% $3,073 $2,255 $1,576 $1,019 Salesforce.com $660 Microsoft $348 Google Intuit Engine Yard 2010 2011 2012 2013 2014 2015 OthersSource: 451 Research Market Monitor (Data Cut 3/28/12)
  16. 16. SaaS Infrastructure - ITMaaS Market Overview ($m) ITMaaS increased functionality 2011- 2011-2015 CAGR: 40% $869 $669 $496 $348 $225 Service-now.com Hewlett-Packard $122 CA Technologies BMC 2010 2011 2012 2013 2014 2015 IBM OthersSource: 451 Research Market Monitor (Data Cut 3/28/12)
  17. 17. SaaS Infrastructure – Storage Market Overview ($m) Backup & Archiving 2011- 2011-2015 CAGR: 23% $1,281 $1,074 $886 $719 $566 $446 Hewlett-Packard (Autonomy) Seagate (Evault) Symantec SunGard 2010 2011 2012 2013 2014 2015 VMware OthersSource: 451 Research Market Monitor (Data Cut 3/28/12)
  18. 18. Cloud As-a-Service 2012 & 2015 Revenue by Vertical: ~220 vendors 2015 17% Technology & Telecom 26% 18% Financial (Banking & Insurance) 2012 27% Government & Education 8% 7% Healthcare 6% Manufacturing & Automotive 6% Retail & Consumer 9% 17% Other (Media, Transportation Food & 9% 15% 18% Beverage, Oil and Gas, Real Estate) 16%Source: 451 Research Market Monitor (Data Cut 3/28/12)
  19. 19. Cloud As-a-Service Revenue by Geography: ~220 vendorsCloud Computing 2011 2012 2013 2014 2015APAC $279 $489 $791 $1,168 $1,639EMEA $548 $928 $1,462 $2,148 $3,022NA $1,865 $2,725 $3,847 $5,030 $6,344 2015 15% 27% 58% 2014 14% 25% 60% APAC EMEA 2013 13% 24% 63% NA 2012 12% 22% 66% 2011 10% 20% 69% 0% 20% 40% 60% 80% 100%
  20. 20. 89 IaaS vendors – 2012 revenue geo breakdown United States Europe 63% 24% Asia 13%
  21. 21. 89 IaaS vendors – 2012 revenue by headquarters Europe 6% United States 90% 28 Vendors 47 vendors Asia 3% 14 VendorsSource: 451 Research Market Monitor (Data Cut 3/28/12)
  22. 22. Regional CloudScape Many public clouds now up and running in Europe Local champions emerging Telcos still dominate IT landscape and MRR vs PAYG Focus on private clouds EU revising legislation Patriot Act used as geo-political marketing device Vendors seeking pan-Europe and per country models Asia-Pac clouds coming on stream Emerging markets: China, India, Brazil RoW match US by ~2015 in compute Governments: the cloud’s unlikely champions
  23. 23. Cloud Market Evolution
  24. 24. Transformation:End user adoption
  25. 25. Cloud adoption snapshot: delivery model 65% 22% SaaS 2% 6% 32% 22%PaaS 18% 26% 51% 19% IaaS 10% 15% 0% 10% 20% 30% 40% 50% 60% 70% Already Deployed Beyond 12 Months In 12 Months Not Deployed/No PlansSource: The 451 Group Cloud End User Survey 2011
  26. 26. Cloud adoption snapshot: deployment model Present In 12 Months 60% 51% 49% 50% 40% 30% 30% 28% 19% 20% 9% 10% 0%Source: The 451 Group Cloud End User Survey 2011
  27. 27. Cloud adoption snapshot: driversBiggest Motivation for cloud usage Cost savings on… Flexibility in scaling IT up and down Quicker time to market Cost Savings on IT Staffing/Admin Improved Productivity Disaster recovery/business continuity Self service delivery 0.0% 20.0% 40.0% 60.0% 80.0% Source: The 451 Group Cloud End User Survey 2011
  28. 28. Cloud adoption snapshot: workloadSource: The 451 Group Cloud End User Survey 2011
  29. 29. Cloud adoption snapshot: inhibitorsQ: List the top three inhibitors/roadblocks you had to overcome for your cloud project Change/Learning Complexity Cost IaaS SaaS Security Change Learning Change Learning Complexity Complexity Buy-In Cost Security 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: TheInfoPro Final Cloud W2: Full Sample, n=97. Note that due to multiple responses per interview, total exceeds 100%
  30. 30. Transformation:Cost Center to Service Provider
  31. 31. Media: Internal service delivery function + IaaS, SaaSGoals: Print co media co Create an internal cloud service delivery function Support digital strategy as a business Cut datacenter footprint model, not a technical model 25% of capacity in cloudBusiness Challenge: Benefits: Socialize and synchronize cloud model Time to market across 13 business units Consumerization of IT via Amazon, Multi-tenancy, compliance, chargeback Google, Salesforce in shared environments Common technology baseline - cloud Demand spikes for competitions used for additional resource Vendor benefits depend on how well Handling all game functions data is segmented to work with it Support multiple clouds?
  32. 32. Energy: Internal service delivery via private cloud Goals: The prize: greater agility, save money Overcome CFO scepticism with business case for cloud Private cloud for most apps with hybrid for ‘infinite scale’ scale Manage as one system Challenges: Benefits: Thousands of guerilla AWS users Enfranchise vs outlaw Public cloud not ready, not cheaper Move to in-house private cloud for most Inappropriate for many apps, insecure apps Until DCs are depreciated there’s no Use more SaaS – controlled by IT driver for change Most savings will come from hybrid IaaS Eco reality: internal budgeting based on over multiple years for ‘infinite scale’ ‘how much will you use next year?’ PaaS – some PoCs, no use case
  33. 33. Trader Media: Cloud service delivery template Goals: Project Spitfire to drive service delivery model Develop new revenue lines faster Reduce datacenter requirement Replace with OpenStack, Citrix hybrid within 3 yearsBusiness challenge: Business benefit: Provisioning is slow so use RightScale Cost management and Amazon to spin up new sites Scale up/back and in multiple geos Remain agnostic DevOps – no versioning PaaS? Looking at roll-your own rather Consolidate management ops than hosted lock-in Got burned in Amazon’s Dublin 2011 outage
  34. 34. British Parliament: Service advisor, service provider Goals: Reduce cost — including license fee Deliver IT as a service Advisory role Implement blueprint for change Consumerization of IT, digitization, tablet device useBusiness challenge: Business benefit: Reduce cost by 25% in 2014-15 Alignment of cloud with key goals: Extraordinary operating environment saving money, greater flexibility and Security, data sovereignty, data digitization of services migration, bandwidth, compliance, SLAs Existing service supplier relationship Support 8,000 members and staff, Become advisor, not a hardware plus 11,000 businesses supplier 144 apps, 1,500 locations – and mobile Blueprint for shared services
  35. 35. NHS Foundation Trust, Liverpool hospitals:Private cloud service delivery = template for other NHS Trusts Goals: Reduce IT spend by 30% Deliver IT as a service Multi-vendor sourcing Digitize records Win hearts and minds!Business challenge: Business benefit: Financial, patients, internal processes, Phased approach: IT apps, business security apps, ITaaS Cost of 10GB networks from incumbent Other NHS Trusts could use its model telcos Very attractive to storage vendors Couldn’t use private cloud – medical Side-stepped incumbent telcos records 15:1 server consolidation, 97% Data growth: 80TB reduction with de-dupe, 24% overall cost reduction
  36. 36. Transformation:Unlocking your inner service provider self
  37. 37. Top ten considerations1. Hosting industry focus2. Basic cloud-hosting features3. Time to market4. Cost5. Billing6. Hardware and network support7. IOPS8. User management9. Usability10. Support
  38. 38. Privatization:Bottling the magic of cloud
  39. 39. Private Cloud Enablement Imitate Turn your own datacenter Emulate into a cloud that works like Replicate Amazon, Rackspace…Advantages: Security and compliance Leveraging existing investment in datacenters Powers new IT-as-a-service model inside organizations New IT refresh cycle for suppliers!But Private cloud is ring-fenced and finite Doesn’t reproduce elasticity of hosted cloud
  40. 40. HybridCloud service providers and hosting partners will be requiredHybrid model is dominant: Virtualized, automated on-premise infrastructure with a hosted elastic option Rackspace, Amazon, VMware, Salesforce.com, Microsoft and others acknowledge this Converged infrastructure – big investments e.g. VCE Community, partner, vertical Service brokers, orchestration – arbitrage?
  41. 41. Private, hybrid cloud managementAbiquo Eucalyptus PuppetAccelOps Flexiant Quest SoftwareAdaptive FluidOps Red HatAppcara FreedomOSS RightScaleAppistry Hatsize rPathCA AppLogic Gale Technologies ScaleXtremeCitrix Cloudstack Hexagrid ScalrCisco NewScale Joyent ServiceMeshCloudShare Kaavo SkytapCloudSoft Microsoft Star AnalyticsCloupia MorphLabs Tap In SystemsCordys Nimbula The Big FourConvirture OnApp UnivaCSC OpenNebula Verizon/CloudSwitchElasticHosts OpenStack VirtustreamEnomaly Opscode VMwareEnsim OpSource ZenOSSenStratus Parallels Zimory
  42. 42. Internal Private and Hybrid Cloud Evolution Phase 3: Hybrid Enablement On-Ramps Cloud Brokers Hybrid Cloud Management / Enablement Focus Shifts Toward Hybrid Clouds Phase 3: Hybrid Cloud Enablement Phase 2: Management/Stabilization Virtualization Management / Capacity Planning Automation Focus: Private Cloud Enablement Phase 2: Management Stabilization Phase 1: Initial Adoption Hypervisor Administration/Monitoring Focus: Consolidation Phase 1: Virtualization <30% 2009 2010 2011 2012 2013+
  43. 43. Trusted advisors, brokers Change and complexity is the friend of professional services Cloud is a proxy for IT transformation as much as it is about buying some on- demand VMs. ‘Moving to the cloud’ is a loaded term, but it is the key opportunity for integrators and providers of professional services Professional services firms will succeed where enterprises recognize organizational change as a requirement for the cloud to be useful. Cloud service brokerage will underpin a multi-sourcing world where end users require a range of execution venues for different workloads and multiple delivery points
  44. 44. Transformation:Digital Infrastructure Convergence
  45. 45. Digital Infrastructure: Convergence or Chaos? Align IT and facilities assets, third-party services, and decision makers Managing digital portfolio consistently Common language, goals, cross-fertilization of assets Datacenter design and operation to meet needs of dynamic environments Digital Infrastructure Services – the organizing principal for successful deployments
  46. 46. What we are hearing Rolling in… Best Execution Venue Cloudonomics Security PaaSification Big Data Propaganda vs reality What could happen? Red sky at night
  47. 47. Best Execution Venue It’s right-tiering, like HSM and ILM for workloads IaaS, PaaS, private Vendors, service providers: everyone wants to be the control point Cloud is part of multi-sourcing strategies Hosted cloud is ‘just another node’ Round-trip Cloud brokers
  48. 48. Cloudonomics IT cost center to IT as a service Benchmarking against Amazon • AMI 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?
  49. 49. New lights to shine in the hedgerow of ITCost Management Spend Management Big Four Cloudability Cloud Cruiser CloudVertical VAlign Raveld Apptio Sensible Cloud VMware Digital Fuel SatoriTech Ylastic OpSource Cloudyn Aria eVapt Broker-dealers Strategic-Blue ComputeNext CloudInsure
  50. 50. Security: a cloud enabler? “Firewalls and VPNs are like cities we built hundreds 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 userSecurity 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 - Cloud Security Alliance (auto selection)
  51. 51. PaaSification ISVs get it – packaging, integration, mobility Marketplaces, value creation Polygot programming: developers Continuous development/delivery vs traditional models IaaS - leads to an examination of PaaS Internal PaaS is automated IT governance Private PaaS, roll-your-own PaaS as the underlying model for apps built for cloud?
  52. 52. But Hosted PaaS is automated vendor lock-in Too many aaS Way down CIO’s ‘to do’ list
  53. 53. Cloud and Big Data: TBD Cloud is a deployment option – databases as VMs or hosted services True cloud databases to exploit distributed, elastic environments? eg NuoDB, Xeround 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 The ‘big data’ focus shifts from volume, variety and velocity, to value, data hubs and analytics in operations
  54. 54. Propaganda vs reality Cloudbursting Multi-cloud strategies – April 21st/August 7th/Feb 29th changes everything Jurisdiction shopping Coke, Colas and Plan Bs
  55. 55. IT as a Service - 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 The IT vending machine: providing self- service to your users is entirely possible
  56. 56. This is New Wave Playground to production New apps vs migration Faster, more flexibly, more devices Virtual first cloud first? Proxy for IT transformation CIO: Career Is Over
  57. 57. Thank you. Questions? Comments? william.fellows@451research.com
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