Cloud / State of cloud Keynote - Bill McNee, Saugatuk


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Today’s economic situation continues to favor the Cloud, driven by businesses reshaping themselves in the wake of recent global economic challenges. The Cloud in all of its forms – including SaaS, PaaS, IaaS and Cloud Services – will drive increasing business and IT activity, resulting in hybrid architectures to manage, and a new Cloud IT mission. However, equally important is how the Cloud is helping to transform business and drive revenue opportunities for traditional businesses, not just Cloud providers. This presentation will highlight the key trends driving the adoption of Cloud IT and Cloud Business strategies, as well as some Best Practice insights from early-adopters concerning how best to profit from new Cloud investments, while avoiding pitfalls.

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Cloud / State of cloud Keynote - Bill McNee, Saugatuk

  1. 1. Cloud IT and Cloud Business: Going MainstreamOpen World ForumEurosites George VParis, FranceP i FSeptember 22, 2011Bill McNeeFounderFo nder and CEOSaugatuck Westport, CT ● Falmouth, MA ● Santa Clara, CA ● Frankfurt, Germany Copyright 2011 ǀ Saugatuck Technology, Inc. ǀ All Rights Reserved ǀ ǀ +1.203.454.3900 1
  2. 2. Accelerating Business and IT Velocity In the wake of the “Great Recession,” businesses of all sizes are reshaping themselves to better compete in an increasingly intertwined and complex global economy.  Thi i l d rethinking and reinventing new ways of engaging with existing This includes thi ki d i ti f i ith i ti customers, as well as carving out new business opportunities. Large businesses are waking up! Recent discussions with senior business and IT leaders repeatedly emphasized both the power and the threat of the Cloud – especially around the concept of accelerating “Business Velocity” for firms developing / implementing in the Cloud.  Key benefits cited include substantially faster time-to-market and time to profit. time to market time-to-profit In this environment, IT is increasingly being asked not only to help companies save money and facilitate internal process improvement, but to better enable the business to grow with differentiated new products, g p , services and offerings. Given this, it isn’t surprising that “IT Velocity” has replaced “IT / Business Alignment” as the top concern for many CIOs. g p y Copyright 2011 ǀ Saugatuck Technology, Inc. ǀ All Rights Reserved ǀ Page: 2
  3. 3. Cloud IT and Cloud BusinessCloud IT Cloud Business Everything-as-a-Service – with a  New ways of doing business focus on cost savings and process  New business opportunities improvement:  Driven by:  Infrastructure Low barriers to entry  Platform Proven offerings from providers with  Application pp ca o viability and vision  Business Process Assimilation, standardization, and  Integration management of Cloud  Management Previously-unrealized levels of business Disr pti e in IT strateg planning, Disruptive strategy, planning + IT integration in funding planning funding, planning, budgeting, buying, and management management, and operations – therefore disruptive to business  Key Challenges: strategy, p gy planning, budgeting, g g g Identifying Opportunities buying, and management Assessing ROI / Benefits Key Challenge: Acquiring Cloud Solutions The Hybrid Portfolio Managing Resources (including Partners) Source: Saugatuck Technology Inc., Inc Copyright 2011 ǀ Saugatuck Technology, Inc. ǀ All Rights Reserved ǀ Page: 3
  4. 4. Large Enterprise Customers – What are They Doing? CTO Gl b l I f CTO, Global Information P id ( id range of verticall and h i t l markets) ti Provider (wide f ti d horizontal k t ) – “Our challenge is to never build another data center. It is a very expensive proposition, and we’d rather not have to do that.” – “Our focus right now is mostly around the Cloud as a means to provide services internally”. – “[The Cloud has] allowed us to drive a level of simplification . . . [and] helped us articulate the [high] [The cost of customization [to the business] that we haven’t been able to do in the past. – “We are not yet comfortable with the idea of using Public Clouds to provide our services; we think that our customers typically [will] want a throat to choke.” President Corporate Ops and Technology Financial Services President, Technology, – “A lot of the differentiation that we had inside [our company] is becoming meaningless now because Cloud infrastructures are coalescing around a LAMP stack, or some version of it.” – “[With] legacy . . . there will be a slow migration to technologies that are equivalent to Cloud and, as Cloud continues to decrease in cost, the semi-private and public clouds will start to receive more workloads in the 5-10 year timeframe.” – “As it concerns the ‘new,’ people are going to implement completely in the Cloud or using Cloud- like technologies from the get-go.” VP Global Strategy, Customer Communications Management Provider – “The old way of doing product development has been very structured and routine and isn’t going to work [in the Cloud].” – “The whole concept of agility that is required to get new businesses up can be dealt with so much easier in the Cloud, both in terms of the underlying technology and product development. It is way easier to bootstrap a new offering by leveraging the inherent pay as you go pricing of the Cloud ” Cloud. Copyright 2011 ǀ Saugatuck Technology, Inc. ǀ All Rights Reserved ǀ Page: 4
  5. 5. Key Trends T d ’ economic situation continues to favor the Cloud, d i Today’s i it ti ti t f th Cl d driven b b i by businesses th t are that reshaping themselves as the global economy recovers from the Great Recession. The Cloud – including SaaS, PaaS, IaaS and Cloud Services – will drive increasing business and IT activity, resulting in hybrid architectures to manage, a new Cloud IT mission, and the launch of Cloud-enabled Business Services by traditional businesses. Through 2015, SaaS will continue to dominate Cloud IT spending, including business apps, social computing and mobility solutions – key aspects of the boundary-free enterprise. – BI joins CRM, Customer Service, Collaboration and SFA as the leading Cloud Business Solutions in j , , g demand through 2012. Financial Analysis / Planning and HR rising dramatically in investment priority. – Big Data and Advanced Cloud Analytics become key drivers of Cloud solution demand. Enterprises will increasingly leverage PaaS platforms and ad-hoc aggregations of Cloud Services across the stack (through the use of APIs) to build composite Cloud solutions. solutions – This includes Cloud services such as SaaS and IaaS, as well as powerful Social Business and Mobile Commerce technologies that are increasingly imbedded directly into critical business workflows. – Private Clouds are gaining traction – especially at large enterprises wishing to maintain control. Integration and workflow in the Cloud will remain a critical capability and requirement requirement, especially for hybrid large enterprise environments. Cloud Services Providers (including Cloud Enablers and traditional service providers aggressively pursuing the Cloud) will flourish – as they increasingly incorporate Open Source and C S d CrowdSourcing strategies and embrace S S P S I S and BP S dS i t t i d b SaaS, PaaS, IaaS d BPaaS. Copyright 2011 ǀ Saugatuck Technology, Inc. ǀ All Rights Reserved ǀ Page: 5
  6. 6. Saugatuck’s Cloud EcoStack™ What Is It? What Is In It? Who Is In It? Business Process Accenture, Appirio, Cognizant, Outsourcing, Managed Comcast, IBM, Infosys, Perot / Dell,Level Cloud Business Services Services, Systems 4 SAP, Symantec, Tenzing, and Operations Integration, Related g Verizon, Verizon Wipro Services ADP, Ariba, Adaptive Planning, Dell Software -as-a-Service Host Analytics, Intacct, Microsoft,Level NetSuite, Oracle, Salesforce, SAP 3 (SaaS) Cloud Business Solutions SuccessFactors, Symantec, Taleo, Taleo Workday Platform -as-a-Service Accenture, Amazon, Apprenda, (PaaS), Hosted services Dell Boomi, Google, HP, IBM, Joyent,Level (e.g., analytics, business Microsoft, OpSource, Oracle, Progress 2 Cloud Platforms & Hubs services, app dev, DBMS, , Rackspace, SafeNet, Salesforce, integration, security) i t ti it ) Savvis, S S , Scribe, VMWare i Servoy, S ib VMW Infrastructure -as-a- Amazon, AT&T, HP, IBM, Joyent,Level Service (IaaS) / “Cloud Layisys, Microsoft, Navisite, NTT, Cloud Infrastructure Opsource, Peer 1, Rackspace, 1 Computing” (e.g., Services computing, computing storage) Savvis, Verizon, Wipro , , p Basic hardware, Cisco, Dell, HP, IBM, Intel,Level software, networking, Microsoft, OpenStack, Oracle, 0 Cloud Technologies and services Red Hat, Ubuntu, VMWare Source: Saugatuck Technology Inc., Inc Copyright 2011 ǀ Saugatuck Technology, Inc. ǀ All Rights Reserved ǀ Page: 6
  7. 7. Open Source in the Cloud EcoStack™ Open Source Roles & Influence Through 2014: Cloud Business Services and • Open source will provide low-cost building blocks, integrated Operations within providers’ core technology stacks and solutions - Enabling low-cost functionality at all layers while encouraging low cost independent development – and fragmentation Cloud Business • LAMP Stack will be the de facto SaaS / Cloud provider Solutions technology platform for Cloud services and providers - Linux, Apache, MySQL, Linux Apache MySQL PHP & Ruby • Community-driven global innovation in technologies and Cloud Platforms & applications will support Cloud provider evolution Hubs • HOWEVER: Technology standards fragmentation, and open community contribution models, will continue t challenge it t ib ti d l ill ti to h ll widespread standardization and profitability for open source Cloud Infrastructure software developers and providers Services - Any vendor domination is unlikely and impractical - Cloud represents a tremendous opportunity for open source developers and providers (globally) Cloud Technologies - Opportunities will continue to follow core technology threads instead of commercial vendor ecosystems Copyright 2011 ǀ Saugatuck Technology, Inc. ǀ All Rights Reserved ǀ Page: 7
  8. 8. The Evolving Cloudscape Through 2015, the largest driver of Cloud IT workloads will continue to be Cloud Business Solutions (including business apps, social business technologies and mobile solutions). Key drivers shift from “better, faster and cheaper” to “transforming the enterprise.” The Rise of Cloud IT and Cloud BusinessHigh SaaS 1.0 SaaS 2.0 Cloud IT Era Wave I: 2001-2006 Wave II: 2005-2010 Wave III: 2008-2013 Wave IV: 2011-2016 Cost Effective Cost-Effective Integrated Workflow-Enabled Measured, Monitored, Managed , , g Software Delivery Business Solutions Business Transformation Business Processes Cloud IT Gestation Post-SaaS Adoption option Period• End-to-End Cloud Business Processes Ubiquitous SaaS AdoptionSaaS Remains Intelligent Hubs Linking Platforms • • Core • Virtualization on Mobile Devices Ado Mainstream SaaS Adoption • Foc s on Business Transformation Focus B siness • Integrated w/ Business • ISV to SaaS Enablement • PaaS Enables • Elastic Cloud Infrastructure Early SaaS Adoption • SaaS Integration Platforms Composite Solutions • Server and Application Virtualization • Standards for Workload Portability • Stand-alone Apps • Business Marketplaces • SaaS Development Platforms (PaaS)at the Marginsfor Composite Service Offerings • IaaS • SLAs • Multi-tenancy and SaaS Ecosystems (because lack of standards) at Business Process Level • Public Cloud Infrastructure (IaaS) • Support • Limited Configurability • Customization Capability • Cloud Collaboration Platforms • Mobility, • Focus on TCO / rapid • Focus on Integration • Customized, Personalized Workflow deployment Collaboration and Social Business technologies ExplodeLow 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: S S Saugatuck Technology t kT h l Copyright 2011 ǀ Saugatuck Technology, Inc. ǀ All Rights Reserved ǀ Page: 8
  9. 9. After the Storm – The Shift to the Cloud Accelerates By 2015, 50 percent or more of NEW enterprise IT spend will be Cloud-based or Hybrid. By 2015, 65 percent or more of NEW enterprise IT workloads will be Cloud-based or Hybrid. By 2015, 25 percent or more of TOTAL enterprise IT workloads will be Cloud-based or Hybrid. For each of the following years, please indicate what But significant differences in adoption percent of your companys preference for deploying NEW by size of company! software (on a continuum from Cloud-based to On- premise) will be: < 100 Employees70.0% 2010 2012 201460.0% Cloud-based (Public) 26.5% 34.5% 43.6%50.0% Hybrid Cloud 17.7% 23.8% 22.5%40.0%30.0%30 0% On premise On-premise 55.7% 41.6% 33.9%20.0%10.0% 5,000 + Employees 2010 2012 2014 0.0% 2010 2012 2014 Cloud-based (Public) ( ) 17.0% 24.5% 34.6% Cloud-based (Public) Hybrid Cloud 17.5% 24.7% 27.3% Hybrid Cloud / On-Premise (Public or Private) On-premise On-premise 65.0% 50.8% 38.1%Source: SS Saugatuck Technology I t kT h l Inc., 2010 Cloud IT Survey (September 2010), Global N 546 Cl d S (S t b 2010) Gl b l N=546 Copyright 2011 ǀ Saugatuck Technology, Inc. ǀ All Rights Reserved ǀ Page: 9
  10. 10. Cloud IT Solutions in Production SystemsToday Through 2013 Through 2012, Collaboration, Mobility and Social Business technologies will lead all forms of Cloud IT deployment. How soon do you expect to see your company acquire Obvious top the following Cloud IT solutions for use in production tier now thru systems? 2013+; maps to historic Collaboration Tools and Capabilities SaaS data 55% 20% 5% (email, (email Web conferencing et al) conferencing, SaaS, IaaS Software-as-a-Service or SaaS / Cloud 28% 25% 10% Business Solutions (Finance, HR,… and ESC are neck- Cloud Infrastructure (Compute, Storage, and neck and-neck 28% 24% 9% et al) Social Networking 36% 19% 6% Widespread Cloud-based In-house Platform-as-a-Service or PaaS (Apps 20% 24% 9% development Development, Integration Development Integration, Mobile mgmt.) mgmt ) by user enterprises is 0% 10% 20% 30% 40% 50% 60% 70% 80% not a given In Use/2010 Planned for 2011-2012 Planned for 2013 +Source: SS Saugatuck Technology I t kT h l Inc., 2010 Cloud IT Survey (September 2010), Global N 546 Cl d S (S t b 2010) Gl b l N=546 Copyright 2011 ǀ Saugatuck Technology, Inc. ǀ All Rights Reserved ǀ Page: 10
  11. 11. Key Challenges / Common Pitfalls for Mid-to-Large Enterprises  Key Challenges: – IT Asset Management – Understanding and Managing Risk (business and technology) – Integration: Data, Security, Processes (internal and external) – Opportunity Recognition and Execution  Common Pitfalls in the Cloud Transition: – No formal planning process – Missing or poor governance structure – Poor or missing responsibility matrix – Neglecting or underestimating HR and change management challenges – No project management office (PMO) – Missing or incomplete inventory of assets – Lack of operational oversight – Few relevant SLAs – Poor communication to constituencies Source: Saugatuck Technology Inc., Inc Copyright 2011 ǀ Saugatuck Technology, Inc. ǀ All Rights Reserved ǀ Page: 11
  12. 12. Summary Cloud Business Cloud Cl d IT Copyright 2011 ǀ Saugatuck Technology, Inc. ǀ All Rights Reserved ǀ
  13. 13. About Saugatuck TechnologySAUGATUCK OFFERINGS AND SERVICESSaugatuck Technology provides subscription research / advisory and consulting services to senior business and IT executives, technology and softwarevendors, business / IT services providers, and investors. Our Mission is to help our clients make better business decisions and create new business valuethrough trusted and objective insights into the key market trends and emerging technologies driving real change. Over the last few years, this hasincluded a major focus on Software-as-a-Service (SaaS), Cloud Infrastructure, and Social Business Technologies, among other key trends. CONTINUOUS RESEARCH SERVICES (CRS) ( ) US AND EUROPEAN OFFICES • Subscription access to Saugatuck’s ongoing premium research, providing independent Headquarters • • • / unbiased insights and guidance into key market trends, buyer behavior, "white-space" Saugatuck Technology Inc. opportunities and disruptive market forces driving changes in business computing. 8 Wright Street, 1st Floor • A variety of advisory services, including telephone-based inquiry, and “Analyst Days” Westport, CT 06880 USA USER STRATEGIC CONSULTING SERVICES (P) +1.203.454.3900 • Leadership and Planning Workshops Regional Sales: • Strategy and Program Assessments St t dP A t • New England, East: Al Vanek@SaugatuckTechnology com England • Vendor Selection / Evaluations • South, Mid West: • Cloud Transition / Migration and Management Best Practices Silicon Valley VENDOR STRATEGIC CONSULTING SERVICES Saugatuck Technology Inc. • Market Assessment 5201 Great America Parkway, Suite 320 • Strategy Validation Santa Clara, CA 95054 USA • Opportunity Analysis (P) +1.408.727.9700 • Positioning / Messaging / Go-to-Market Strategies Regional S l R i l Sales: • Competitive Analysis • West: THOUGHT-LEADERSHIP PROGRAMS Germany • Custom research programs targeting key technology and business/IT investment Saugatuck Technology Inc. decisions of CIOs, CFOs and senior business executives Bluecherstr. 4 • Delivered as research reports, position papers or executive presentations. D 65343 Eltville am Rhein, Germany ( ) (P) +49.6123.630285 VALUE-ADDED VALUE ADDED SERVICES Regional Sales: • Competitive and market intelligence • Europe: • Investment advisory services (M&A support, due diligence) • Primary and Secondary market research.For more information about these or any other Saugatuck Technology service, please reach us through the contact information noted above.• To learn more about Saugatuck consulting and research offerings, go to or email Chris MacGregor for more information.• Whil there register on our site and b i receiving our complimentary R While h i i d begin i i li Research Al h Alerts. Page: 13 Copyright 2011 ǀ Saugatuck Technology, Inc. ǀ All Rights Reserved ǀ