2016 Future of Cloud Computing Study

THE FUTURE OF
6TH ANNUAL SURVEY
CLOUD COMPUTING
@North_Bridge @FutureofCloud @Wikibon #futureofcloud

@FUTUREOFCLOUD #FUTUREOFCLOUD
emphasis of
cloud strategy
cloud technology
in use today
cloud means
business
cloud
expectations
where data
lives
demographics
drivers
AGENDA
investments insightsthe cloud
what’s next
inhibitors

THE COLLABORATORS 2016+
PLATINUM COLLABORATORS
COLLABORATORS

DEMOGRAPHICS
55 countries

2014 2015 2016
859
952
1,351
RECORD-BREAKING SURVEY
20%
of respondents from
cos. >5000 employees
USERS
60%VENDORS
40%
18%
of respondents from
cos. <10 employees
>60%
of respondents from
technology industry
increase
YOY
+42%

HOLLY MALONEY MCCONNELL, PRINCIPAL
Cloud environments will remain
predominantly hybrid in the coming years,
enhancing the importance of a clearly
defined cloud governance and orchestration
strategy to optimize for security, self-
service and agility, while minimizing costs.
@NORTH_BRIDGE

EMPHASIS OF CLOUD STRATEGY

STILL <50% OF TECHNOLOGISTS
CLOUD FIRST OR CLOUD ONLY
42%
Cloud First
or Only
49%Cloud
Selectively
9%Don’t Use
Cloud

BUSINESS FROM CLOUD-BASED
APPLICATIONS
of companies
derive 50% or more
of their business
through cloud-
based applications
42%

FEWER LAGGARDS… YET SOME PERSIST
don’t use
cloud
10% 20%get none of their
business from
cloud-based
applications
Similar numbers of companies
indicated they:

REACHING EQUILIBRIUM IN
PUBLIC/PRIVATE/HYBRID?
2015 2016
PUBLIC
34%
PRIVATE
19%
HYBRID
47%
PUBLIC
30%
PRIVATE
23%
HYBRID
47%

CLOUD TECHNOLOGY
IN USE TODAY

SAAS COMMONPLACE
SaaS is used in nearly
7 in 10 companies

IAAS COMPUTE SLIGHTLY GREATER USE
THAN IAAS STORAGE
IaaS Compute
58% 53%IaaS Storage

IN TWO YEARS ALL TYPES OF CLOUD
TECHNOLOGIES EXPECTED TO RISE
IaaS, PaaS, DBaaS, SDN
except for SaaS which is expected to stay
constant

CUSTOMER INVESTMENTS IN PUBLIC
CLOUD TECHNOLOGIES
Source: Wikibon July 2016 Public Cloud Forecast Report
PaaS,
3% IaaS,
31%SaaS,
66%
2015 Worldwide Public Cloud
Revenue Segmentation

CUSTOMER INVESTMENTS IN PUBLIC
CLOUD TECHNOLOGIES
0
100
200
300
400
500
600
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Total 2015-2026 Public Cloud CAGR = 19%
SaaS Public
Cloud
IaaS Public
Cloud
PaaS Public
Cloud
SaaS = 19% CAGR
IaaS = 18% CAGR
PaaS = 33% CAGR
Source: Wikibon July 2016 Public Cloud Forecast Report
(In $ Billions)

@STU
STU MINIMAN, SENIOR ANALYST
The Future of Cloud data shows that while adoption of
SaaS, public and private cloud have rapid growth, most
companies are working tactically rather than
strategically. Innovation and agility require commitment
from the business to embrace transformation by
changing processes along with tools. We are still in the
early innings of cloud delivering transformation; it’s
exciting times for those working with technology.

WHERE DATA LIVES

STORING YOUR DATA: PUBLIC V. PRIVATE
28% 59%of companies are storing over half of
their data in a PUBLIC CLOUD
of companies are storing over half
of their data in a PRIVATE CLOUD

IN TWO YEARS - STORING YOUR DATA:
PUBLIC V. PRIVATE
28% 59%
Companies storing over half
of their data in a public cloud
expected to
Companies storing over half
of their data in a private
cloud expected to
of companies are storing over half of
their data in a PUBLIC CLOUD
of companies are storing over half
of their data in a PRIVATE CLOUD
18% 16%

CLOUD MEANS BUSINESS

IT FUNCTIONS MOVE WITH
GUSTO TO THE CLOUD
Disaster recovery, IT services (helpdesk, virtual
desktop), web content management,
communications all over
disaster
recovery
comms app devweb content
mgmt
70%either in the cloud or
moving there

SOME BUSINESS FUNCTIONS LAG
Accounting, Back Office (HR, Payroll)
and especially manufacturing still not
moving to the cloud
>30%

BUSINESS FUNCTIONS IN THE CLOUD
Sales/marketing, business analytics,
customer service all either in the cloud or
moving there
75%

MIKE SCHUTZ, GENERAL MANAGER, CLOUD PLATFORM MARKETING
@schutzmike
The Future of Cloud 2016 Survey underscores the cloud’s critical
role in driving digital transformation across industries. Cloud
adoption – including hybrid cloud – continues to accelerate
along with growth in cloud-based applications and services. We
can expect to see business and technical decision makers look
to cloud providers who are global, trusted and hybrid and offer
open development tools and intelligent services to drive
business transformation.

CLOUD DRIVERS

DRIVERS
cost
scalability
agility
scalability
cost
agility
innovation
innovation
scalability
cost
agility
innovation

MOBILE & OPEN SOURCE VAULT
mobile
open
source
2Xas likely to
be cited as a
driver for
cloud
computing
2016 v. 2015

@JZEMLIN
JIM ZEMLIN, EXECUTIVE DIRECTOR
"Open source software is the cornerstone for cloud
computing. Open, collaborative development has nurtured
a vibrant ecosystem that is fueling new services that in
turn spur commercial adoption. From container
technologies to high-velocity projects such as Kubernetes
and Cloud Foundry, open source and open development are
further accelerating the move to
the cloud for businesses for all
sizes across all industries."

CLOUD INHIBITORS

IMPORTANT SHIFTS WITH INHIBITORS
2015 2016security
privacy
lock-in
complexity
regulatory
security
privacy
lock-in
complexity
regulatory

REGULATORY, SECURITY AND DATA ISSUES
LESSEN IN IMPORTANCE
securitydata
issues
regulatory
33% 16% 15%

PRIVACY CONCERNS
In 2011 when we first started the survey,
privacy wasn’t even a top 5 inhibitor. Since
then it’s grown to be a top 3 concern.
privacy

SWITCHING COSTS
TOP ISSUES WHEN SWITCHING
CLOUD PROVIDERS:
Vendor lock-in or data portability
1 in 4 cite them

CLOUD SECURITY
50%see it as a benefit
of the cloud
50%see it as a barrier to
cloud adoption

THE CLOUD, WHAT’S NEXT?

WHERE CLOUD SECURITY IS BEING USED
42%are using the cloud
to secure data
37%are using the cloud to
secure applications
42%are not using the
cloud to secure
anything

RISE OF INDUSTRY
CLOUDS
50%nearly half of respondents
indicated they are or will use
(within the next 24 mos.) an
industry cloud offering

EMERGING AREAS OF CLOUD INVESTMENT
58%analytics 52%containers
32%16%virtual reality
AI /
cognitive
computing

@ACQUIA
PETER TROOST, SENIOR VICE PRESIDENT ENGINEERING
Cloud’s impact on technology trends in the past few
years alone has been explosive and transformational.
The growing adoption of cloud solutions is a testament
to the fact that organizations across all industries
recognize the power and possibility of the cloud. In a
short amount of time, cloud has become the strategic
advantage for building, deploying, and managing
digital experiences more rapidly and reliably
throughout every stage of development.

CLOUD EXPECTATIONS

@FUTUREOFCLOUD #FUTUREOFCLOUD@FUTUREOFCLOUD #FUTUREOFCLOUD
Expect ROI in <3 mos.
CLOUD TIME TO WOW:
SAAS EXPECTATIONS RISINGuser
2016 82%
2015 78%

Expect ROI in <3 mos.
CLOUD TIME TO WOW:
PAAS/IAAS EXPECTATIONS RISINGuser
2016 64%
2015 58%

Direct Still Dominates but Indirect and
especially VARs up 3X versus last year
user
CLOUD SALES CHANNELS

ad hoc relationships
CHOOSING A CLOUD VENDOR
50-50
as part of a strategic plan.
STILL
ABOUT
VS.
user
Unchanged
between
2015 & 2016

user
PAAS/IAAS VENDOR RELATIONSHIPS
STRATEGIC?
61%of companies are using
just one PaaS/IaaS vendor

user
SAAS VENDOR RELATIONSHIPS
SPECIALIZED?
56%of companies are using
multiple SaaS vendors

POLARSEVEN_COM
DARRELL KING, CHIEF EXECUTIVE OFFICER
Cloud technologies allow rapid expansion like never before, so
even small startups can have access to enterprise technology at
affordable costs giving limitless potential to new ideas born in
the cloud.
We expect to see more and more new breeds of technology rise
up and challenge market leaders at rapid rates which is very
exciting.

user
SAAS VENDOR RELATIONSHIPS
SPECIALIZED?
More than50%are looking for the vendor to have specific capabilities and
ability to integrate with other services

GTM CLOUD MODELS
GTM gets more complex,
less direct/more indirect sales
vendor
2015 2016
Online 21% 16%
Reseller
(no value add)
6% 7%
VAR 16% 19%
Direct to User 42% 38%
Consultant 15% 20%

@JOEKINSELLA
JOE KINSELLA, FOUNDER & CTO
This year, the Future of Cloud survey found that relying on a
single vendor is no longer status quo. Multi-cloud and hybrid
environments deliver many benefits, but managing the
complexity without straining resources is IT’s next hurdle.
Success hinges on balancing cost, performance, and security
– companies with the right approach show just how much of a
game changer cloud can be, when done right.

GTM CLOUD MODELS IN THE FUTURE
Sales is either very streamlined e.g. online or increasingly
through a channel e.g. VAR, reseller
vendor
2016 2018
Online 16% 26%
Reseller
(no value add)
7% 9%
VAR 19% 23%
Direct to User 38% 31%
Consultant 20% 11%

IMPORTANCE OF CONSTANT PRODUCT
ITERATION SURGES
of all survey respondents
have begun DevOps in small
teams up 37.8% versus last
year51%

JASON COHEN, FOUNDER & CTO
The Future of Cloud Survey highlights the increased
investment in DEVOPS which provides the agility,
reliability and cost efficiency needed for continuous
product innovation. The key for innovation at speed will
be how DEVOPS teams are integrated into the broader
product organization. Product development is not a linear
process. It’s imperative that DEVOPS have a seat at the
table throughout the entire development process to
ensure success.@ASMARTBEAR

FAST FEATURES NOW A COMPANY
IMPERATIVE
of all survey respondents
have begun DevOps in large
teams or company-wide up 2X
versus last year30%

INVESTMENTS IN CLOUD

58
INVESTMENTS IN CLOUD
$8.5B
VALUATION
3EXITS

INSIGHTS
insights

MARKETING TECHNOLOGY 2016
THE CLOUD GETS SPECIALIZED
Specialized cloud
segments will grow
in size and
importance:
Insights
1
CLOUD ANALYTICS
CLOUD SECURITY
INDUSTRY CLOUD
MARKETING TECHNOLOGY

A SHIFT IN THE WAY CLOUD
TECHNOLOGY IS SOLD?
As solutions become
more complex, more
room for resellers
Insights
2

As security continues to improve, cloud environments
are extending deeper into verticals and applications,
allowing categories like content management and
communications to take advantage of both public and
private cloud for the digital transformation of industries.
The channel will play an important role in bringing these
specialized and industry cloud services to market.
HOLLY MALONEY MCCONNELL, PRINCIPAL
@NORTH_BRIDGE

INNOVATION AT SPEED
Companies integrating software teams,
IT operations and business stakeholders
DEVOPS
Providing agility, reliability and cost efficiency –
key competitive differentiators
Insights
3

CLOUD USERS MORE DISCERNING
When examining users only,
62% are using the cloud selectively
(versus 49% when factoring in all survey respondents)
Insights
4

CLOUD USERS GREATER
EXPECTATIONS
Insights
5
SaaS
82% Expect ROI in <3
mos. (Up 5% YOY)
PaaS/IaaS
64% Expect ROI in <3
mos. (Up 10% YOY)

THANK YOU+
PLATINUM COLLABORATORS
COLLABORATORS

CASE STUDIES

CASE
STUDY FOR
CUSTOMER
APPLICATION CATEGORY
CASE STUDY
govCMS is the whole of
government content
management and website
hosting service for Australian
government agencies.
Together with the
Department of Finance,
Acquia helps Australian
government agencies meet
the new digital government
standards by utilizing a
secure, reliable, and flexible
open cloud platform.
@AUSGOVCMS
Prior to 2015, all of Australia’s government agencies were using
different web content management solutions for their respective
digital properties. The govCMS project originated from the demand to
provide one central and standardized platform to help create
efficiencies in government and improve the digital delivery of citizen
experiences.
Digital Experience
Delivery
The govCMS platform is now rolling out across the Australian public
service at the federal, state, and local levels. The entire project is a
landmark for transformation in government – now more than 50 of
Australia’s government agencies are using govCMS to deliver engaging
citizen experiences in the cloud.
24.2Million
Citizens

CASE
STUDY FOR
CUSTOMER
CASE STUDY
CloudHealth provides Ziff
Davis with a view of their
cloud infrastructure – even
integrating data from
sources like New Relic and
Datadog – and helps them
automate and optimize their
hybrid cloud. Ziff Davis now
drives accountability for
cloud spend, proactively
terminates unused instances,
enables Business
Perspectives for precision
reporting, and saves $1,000
per month on Reserved
Instance modifications
alone.
@CLOUDHEALTHTECH
Ziff Davis needed a centralized view of activity across a sprawling
cloud infrastructure that includes all of its many subsidiaries and
lines of business. Moreover, they needed a cloud service management
solution that would accommodate their hybrid environment.
Hybrid cloud
management
Consolidating visibility, CloudHealth helps Ziff Davis effectively
manage multiple accounts through policy-setting and governance. Ziff
Davis now uses CloudHealth to optimize performance and usage, and
to automate RI analysis – formerly a manual process which used to
take a full day each week.
ONEday saved
per week

CASE
STUDY FOR
CUSTOMER
CASE STUDY
Honeywell has become a
household name. Today,
Honeywell’s Business
Technologies (HBT) division
continues to break new
ground, transforming the
products for which it is so
well known into connected
software and services. With
Azure, Honeywell is
innovating on the Internet of
Things (IoT) technology, and
using the outputs of that
connectivity to add new
value for customers.
@HONEYWELL_HOME
Honeywell’s foray into connected products unlocked a new
opportunity to connect with customers. They needed a way to learn
how their customers are using their products and what interests
them.Discrete
Manufacturing
The data Honeywell collects in Azure creates a flywheel that enables
greater innovation. They release a connected product to market,
collect information from that product, and learn about how
consumers use it to continually improve and iterate.
11k
engineers globally can now
work on customer value-
added applications instead
of infrastructure

CASE
STUDY FOR
CUSTOMER
CASE STUDY
True Alliance is home to
some of the world’s most
famous “must have” brands
including: Ben Sherman,
Coach, Lacoste, Leejeans,
Nautica, Reebok, Riders,
Rockport, Speedo, Teva, The
North Face, UGG Australia,
Kipling, Sanuk and Wrangler.
True Alliance is focused on
investing in the long term
success of all of their brands
– many of which are market
leaders in their field.
@POLARSEVEN_COM
True Alliance initial platforms were hosted internally and True
Alliance were seeing limitations with the ability to scale and manage
environments.
Continuing to manage hardware in house was becoming expensive and
impractical so they began to look for a cloud solution.
Infrastructure Build &
Application Migration
Increased uptime across the platforms has helped to increase sales
and improve the customer experience.
Using RDS the administration overhead has been reduced and there
have been savings in upfront costs from having to build new
environments for hardware and software as the business grows.
Faster, cheaper
and scalable
environment

FIND OUT MORE
#FUTUREOFCLOUD I @FUTURE OF CLOUD
WWW.NORTHBRIDGE.COM I @NORTH_BRIDGE
http://wikibon.com/ I @WIKIBON
FUTURE OF CLOUD
@NORTH_BRIDGE
HOLLY MALONEY MCCONNELL
@STU
STU MINIMAN

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