Sean hackett the 451 group. cloud computing disrupting the status quo
The Voice of the Customer Sean Hacke5, Research Director Cloud Compu<ng
The 451 Group 451 Research is focused on the business of enterprise IT innova<on. The company’s analysts provide cri<cal and <mely insight into the compe<<ve dynamics of innova<on in emerging technology segments. Tier1 Research is a single-‐source research and advisory ﬁrm covering the mul<-‐tenant datacenter, hos<ng, IT and cloud-‐compu<ng sectors, blending the best of industry and ﬁnancial research. The Up<me Ins<tute is ‘The Global Data Center Authority’ and a pioneer in the crea<on and facilita<on of end-‐user knowledge communi<es to improve reliability and uninterrup<ble availability in datacenter facili<es. TheInfoPro is a leading IT advisory and research ﬁrm that provides real-‐world perspec<ves on the customer and market dynamics of the enterprise informa<on technology landscape, harnessing the collec<ve knowledge and insight of leading IT organiza<ons worldwide. ChangeWave Research is a research ﬁrm that iden<ﬁes and quan<ﬁes ‘change’ in consumer spending behavior, corporate purchasing, and industry, company and technology trends.
TheInfoPro Business Overview Fundamental, ”voice of the customer” research on key Informa<on Technology (IT) sectors. Founded in 2002 as an unbiased alterna<ve to Gartner. Transparency: no analyst spin or bias. Direct, factual results provided to our clients. Source: One on one interviews with thousands of pre-‐screened IT Professionals within our proprietary network, repeated every six months. Focus is IT Infrastructure spanning: Storage, Servers, Networking, Informa<on Security, Cloud Compu<ng
Methodology & Research Process Structured Interview Process: § 60-‐ to 90-‐minute interviews repeated in six month “waves” § TIP Researchers, who average 20 years of IT experience, interview. § IT Decision makers – pre-‐screened for domain experience at Global 2000 companies TIP quan<ta<ve and qualita<ve data includes: § Customer Spending: future spending plans by vendor and size of spend § Vendor Shortlists: who’s in use and who’s in plan § Vendor Performance: customer ra<ngs, who’s vulnerable to customer loss, and the vendor(s) they’re vulnerable to § Technology Roadmaps: What’s hot and what’s not > TIP’s patented Technology Heat Index™ § Time Series: Unmatched historical data is captured for comparison purposes Data is highly customizable by dimensions such as: § Industry § Revenue § Installed Technology Provider § Environment (i.e., capacity, budget, employees)
Agenda Sec<on 1: Introduc<on – What is the Cloud? Sec<on 2: Demand Forecasts and Supply Side Spending Sec<on 3: Customer Percep<on, Drivers and Inhibitors Sec<on 4: Enterprise journeys in the cloud
Many Remain a Bit Cloud Confused TIP Narra(ves: There are so many deﬁni(ons of cloud it is hard to really say. Large Enterprise – Financial Services There are many deﬁni(ons, and I have yet to see one that is all-‐encompassing, so Im s(ll forming my own deﬁni(on. Large Enterprise – Financial Services A nebulous term – I would say its a grid of storage/applica(ons/services hosted oﬀ-‐ site. Europe -‐ Healthcare/Pharmaceu(cals It depends on what cloud vendor you are talking to. Europe – Healthcare/ Pharmaceu(cals • –
The451 Group’s Cloud Deﬁni<on The 451 Group broadly deﬁnes cloud compu(ng as a set of business models and technologies that enable IT func(ons to be delivered and consumed via a third party as a real-‐(me service. A complimentary copy of the Cloud Codex report is available on The 451 Group’s website.
IaaS Cloud Infrastructure Private Clouds Serve as the Founda(on for Public Cloud Adop(on
Private Cloud Virtualiza<on Entering a New Phase Source: LeQ and BoSom Charts The 451 Group Market Monitor
Billions Falling From the Public Clouds Sizing the Cloud Source: LeQ and Right Charts The 451 Group Market Monitor Includes: PaaS, IaaS both Forecasts Do NOT include SaaS
Cost eﬃciencies and 11% higher asset u<liza<on rates in cloud drive increasingly compelling economics Hybrid clouds enable organiza<ons to leverage “best execu<on venues” where steady loads and elas<c loads in environments where they are most economically feasible
Corporate Sokware Spending Outlook 08/09 Recession Source:
Corporate Public Cloud Spending Q: Over the next 6 months, does your company plan to increase its overall spending on cloud compu:ng, decrease its spending, or will your companys overall cloud compu:ng spending remain the same compared to the previous 6 months? Companies That Total Sample Currently Use Cloud Increase Overall Spending 11% 34% Decrease Overall Spending 1% 4% Remain the Same 16% 60% No Plans to Use Cloud Computing 71% 2% in Next 6 Months Source:
Corporate Public Cloud Spending by Cloud Stack – Next 6 Months Q: For each of the following uses of cloud compu:ng, do you expect your company to increase its spending on cloud-‐related services, decrease its spending, or will spending on cloud-‐related services remain the same over the next 6 months? Source:
Public Cloud Spending: Eﬀect on Other IT Spending Areas Q: What eﬀect -‐ if any -‐ does your companys spending on cloud compu:ng have on your budget for other soDware and IT services? Source:
All Clouds Will be Hybrid: Everyone wants to be the control point! IT Outsourcing IaaS Value will be in driving best execu(on Dedicated venues: Hos<ng PaaS Risk/Reward BPO Cost/Beneﬁt SaaS Ver<cally Prolifera<on Horizontally integrated of monolithic federated and cloud clouds, APIs – ‘compute markets’ – ecosystems – CloudTone? brokering PaaS and more
It’s Not a Zero Sum Game “Tradi<onal” IT Outsourcing BPO Oﬀshore “Virtual” IBM Bisys, Experian WNS, Tata IBM HP IBM HP, Wipro HP Accenture, CSC Convergys – Salesforce.com Dell (Getronics, IBM Cap<ve HP AtosOrigin) IBM Accenture HCL, Tata IBM Ci<street Travelocity Vanco
Domino Sugar: The Good Domino Foods, Inc. is the largest marketer of reﬁned sugar in the United States and sells two of the na<ons most well-‐known brands, Domino Sugar and C&H Sugar. Details Number of Users 2400 Applica<ons ERP, CRM, Invoice and Ordering Systems, business intelligence, HCM and Payroll Expected Cost Savings 30% Domino Sugar’s SAP applica<on will be hosted on Virtustream’s Shared Infrastructure as a Service.
Eli Lilly: The Bad & The Ugly § Eli Lilly began using Amazon AWS in 2009 § Needed signiﬁcant amount of compu<ng power to “crunch data” § Procurement and installa<on process could take up to 3 months § According to Eli Lilly the cost of delaying a product could total $150 per second Answer: Swipe Credit Card and have 25 Servers up and running in an hour… Within two hours they were crunching numbers… When complete Amazon sent bill for $89 while at $150 per second a 3 month wait would have cost ~$1B Fast Forward: July 2010 Amazon Web Services poster child, Eli Lilly has walked away from using the cloud compu<ng service aker failing to come to terms over legal indemniﬁca<on issues speciﬁcally related to accountability for network outages, security breaches and other forms of risk inherent in the cloud, to Amazon Web Services.
10 Key Takeaways 1) The Shik to the cloud is inevitable 2) Cloud models are growing while tradi<onal models largely ﬂat-‐line or decline 3) Adop<on drivers are ﬁrst centered on cost savings 4) Adop<on for most will depend on percep<on 5) Inhibitors are ge•ng tac<cal 6) 2010 is the year of the private cloud with end goal of building a Hybrid solu<on 7) Private cloud deployment in midst of a shik to management 8) Public cloud is gaining steam 9) Commodi<za<on takes hold and shiks the basis of compe<<on 10) Almost without excep<on IaaS will lead to an examina<on of PaaS