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X Change Keynote Kaplan Presentation V02 12 10


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What channel companies need to know and what they should do about today’s cloud computing trends.

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X Change Keynote Kaplan Presentation V02 12 10

  1. 1. XChange Solution Provider Conference: Alternative Models & Thinking Presented by, Jeffrey M. Kaplan Managing Director THINKstrategies [email_address] 781-431-2690
  2. 2. Agenda <ul><li>Changing Customer Requirements </li></ul><ul><li>Shifting Competitive Landscape </li></ul><ul><li>Key Business Implications </li></ul><ul><li>New Models for Success </li></ul>
  3. 3. Why We Are Here… Is Technology an Enabler or Inhibitor?
  4. 4. Primary Market Drivers <ul><li>Changing economic conditions </li></ul><ul><li>Changing competitive forces </li></ul><ul><li>Changing ecological concerns </li></ul><ul><li>Changing workplace requirements </li></ul><ul><li>Changing technologies </li></ul><ul><li>Changing priorities & sourcing policies </li></ul>
  5. 5. <ul><li>Deployment Challenges </li></ul><ul><ul><li>31.1% of SW projects cancelled before completed. </li></ul></ul><ul><ul><li>52.7% of projects cost nearly 190% of original estimates. </li></ul></ul><ul><li>Operational Costs </li></ul><ul><ul><li>Maintenance & management costs=>10x license fee. </li></ul></ul><ul><ul><li>Escalating hardware & staff support costs. </li></ul></ul><ul><ul><li>Over provisioning and under-utilization of SW licenses </li></ul></ul><ul><li>Economic/Budgetary Pressures </li></ul><ul><ul><li>Need to reduce IT costs and increase business benefits. </li></ul></ul><ul><ul><li>Need to increase utilization to gain greater ROI. </li></ul></ul>The Shortcomings of Legacy, On-Premise Apps
  6. 6. On-Demand Has Become Mainstream
  7. 7. The New Generation Thinks & Communicates Differently ©2009, THINKstrategies, Inc. Slide
  8. 8. Changing Customer Expectations <ul><li>Old, </li></ul><ul><li>Fixed, Capital Investment </li></ul><ul><li>Complexity, Customization </li></ul><ul><li>High TCO, Uncertain ROI </li></ul><ul><li>Internal Support </li></ul><ul><li>Limited Visibility </li></ul><ul><li>Outsourcing Alternatives </li></ul><ul><li>New, </li></ul><ul><li>Flexible, Operating Expense </li></ul><ul><li>Simplicity, Utilization </li></ul><ul><li>Rapid Time-to-Value </li></ul><ul><li>Vendor Management </li></ul><ul><li>More Analytics </li></ul><ul><li>Out-Tasking Options </li></ul>
  9. 9. Shift from Outsourcing to Out-Tasking <ul><li>Businesses seeking functionality, not technology. </li></ul><ul><li>IT outsourcing deals have failed. </li></ul><ul><li>Selective outsourcing, or ‘out-tasking’ gaining attention. </li></ul><ul><li>SaaS, managed services & cloud computing are forms of out-tasking. </li></ul>
  10. 10. SaaS, Managed Services & Cloud Computing Inter-related Out-Tasking Alternatives SaaS Cloud Computing Managed Services Out-Tasking Alternatives
  11. 11. An Historical Perspective Facilities Mgmt Outsourcing ASPs/MSPs On-Demand Services Market Penetration Year 1970 1980 1990 2000 2010
  12. 12. Enabling Technologies Broadband networks Grid computing Blade technology Virtualization Security Web services & APIs Service management
  13. 13. Defining SaaS Services-Oriented Applications One-to-Many Software Design Network-Based Delivery User-Centric Process Orientation Rapid Deployment/Self-Provisioning Built-In, Real-Time Analytics Continuous Enhancements Subscription-Pricing Multi-Tenancy
  14. 14. How SaaS & ASP/Hosting Differ Customer Application ASP/Hosting Company <ul><li>Same legacy applications </li></ul><ul><li>Upfront perpetual license </li></ul><ul><li>Still inflexible architecture </li></ul><ul><li>Limited accessibility </li></ul><ul><li>Single-instance, inefficient </li></ul>
  15. 15. What’s Really Happening in ASP/Hosting Customer Application ASP/Hosting Company Just another outsourcing deal.
  16. 16. Why ASP/Hosting Fails Multiple Customers ASP/Hosting Company Updates/Upgrades Too Complex Not Scalable Limited Value-Add
  17. 17. Multi-tenant SaaS Uses Common, Scalable Code SaaS Vendor
  18. 18. SaaS Adoption Beyond a Tipping Point Source: THINKstrategies/Cutter Consortium % of Respondents Using SaaS 2007 32% 2008 62%
  19. 19. Customer Satisfaction, Renewal & Referral Rates <ul><li>>90% </li></ul>
  20. 20. Shifting Adoption Patterns Unilateral End-User, SBU Adoption of SaaS Solutions Enterprise-Wide Acceptance and Adoption of SaaS
  21. 21. Recent Mega-Deals = 500,000 suppliers = 420,000 end-users “ We evaluated a number of alternatives, but Aravo SIM was the best commercially-available solution capable of meeting our complex, global needs” - SVP and CIO of GE &quot;The Enterprise Cloud Computing business model is a strategic direction for us. It not only lowers IT costs, and creates faster end to end processes, but can also grow with our requirements both globally and locally.“ - Head of Corporate IT, Siemens AG
  22. 22. New Government View <ul><li>“ I’m all about the cloud computing notion. I look at my lifestyle, and I want access to information wherever I am. I am killing projects that don’t investigate SaaS first.” </li></ul><ul><li>President Obama’s CIO, Vivek Kundra, WSJ 3/9/09 </li></ul>
  23. 23. Market Adoption Forecast Market Penetration 2012 2010 2008 2006 Innovators Early Adopters Mainstream Buyers Laggards
  24. 24. SaaS Expands from Front- to Back- to Inter-Office Apps BUSINESS APPLICATIONS Collaboration CRM/SFA … Procurement Supply-Chain … ERP Finance … Front Office Inter-Enterprise Back Office Market ‘Cloud Rush’
  25. 25. Top Ten Showplace Application Categories Source: SaaS Showplace 44 Messaging 46 eCommerce 47 Human Resource Management (HRM) 49 Marketing 55 Enterprise Resource Planning (ERP) 62 Project Management 67 Document Management 78 Accounting/Financial 80 Collaboration 103 Customer Relationship Management
  26. 26. Top Ten Showplace Industry Categories Source: SaaS Showplace 42 Software 43 Telecommunications/xSPs 55 Professional Services 63 Government 69 Retail 72 Healthcare 80 Technology 91 Manufacturing 102 Banking/Financial Services 110 SMBs
  27. 27. SaaS Expands from Business Apps to IT Management BUSINESS APPLICATIONS Collaboration CRM/SFA … Procurement Supply-Chain … ERP Finance … Front Office Inter-Enterprise Back Office Security Systems Mgmt … Network Mgmt Remote Access … Data Protection Storage … IT Management
  28. 28. Why IT Is Attracted to SaaS <ul><li>Most IT organizations spend 75-80% of their time reacting to problems, keeping systems and software up and running. They would prefer to focus on more strategic business initiatives. </li></ul>
  29. 29. <ul><li>Traditional NSM = ERP of the IT World </li></ul><ul><ul><ul><ul><li>Too complicated </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Too expensive </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Too time-consuming </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Too ineffective </li></ul></ul></ul></ul><ul><ul><li>>50 IT/Application Mgmt solutions on the SaaS Showplace. </li></ul></ul>SaaS Penetrating IT Management Market
  30. 30. Managed Services/SaaS Convergence Managed Services SaaS
  31. 31. Managed Services vs. SaaS <ul><li>Managed Services </li></ul><ul><li>Provider assumes management responsibility </li></ul><ul><li>Sold on an per device basis </li></ul><ul><li>Focus on network/system availability & performance </li></ul><ul><li>SaaS </li></ul><ul><li>Provider delivers software functionality </li></ul><ul><li>Sold on a per user basis </li></ul><ul><li>Focus on application availability & performance </li></ul><ul><li>Quicker Time-to-Value </li></ul><ul><li>Lower TCO/Higher ROI </li></ul><ul><li>Shifts Burden to Provider </li></ul>
  32. 32. Moving from SaaS Apps to Cloud Computing Cloud Computing Services SaaS Apps “ Top Strategic Technology for 2010” But what does “cloud computing” mean?
  33. 33. NIST Definition of the Cloud
  34. 34. Key Customer Concerns <ul><li>Concerns , </li></ul><ul><li>Reliability </li></ul><ul><li>Security </li></ul><ul><li>Customization </li></ul><ul><li>Compliance </li></ul><ul><li>Integration </li></ul><ul><li>Customer Support </li></ul>
  35. 35. Living in a Hybrid World <ul><li>Companies prefer choice. </li></ul><ul><li>Businesses seeking combination of on-demand/on-premise solutions. </li></ul><ul><li>Variety of appliances and applets becoming available. </li></ul><ul><li>Cross-platform integration possible. </li></ul><ul><li>Cloud location-independence becoming bi-directional. </li></ul>
  36. 36. Private Clouds <ul><li>Benchmarking Market Leaders </li></ul><ul><ul><li>Amazon </li></ul></ul><ul><ul><li>Facebook </li></ul></ul><ul><ul><li>Google </li></ul></ul><ul><ul><li> </li></ul></ul><ul><li>Adopting Best Practices </li></ul><ul><ul><li>Standardization </li></ul></ul><ul><ul><li>Simplification </li></ul></ul><ul><ul><li>Automation </li></ul></ul><ul><ul><li>Agility </li></ul></ul>
  37. 37. Multiple Deployment Methods SaaS Managed Service Appliance Multi-Tenant Platform
  38. 38. On-Demand Services & The IT Industry Inversion Services Technologies Past Future The IT Industry Inversion
  39. 39. Key Challenges Facing Established Vendors <ul><li>Re-architecting applications </li></ul><ul><li>Re-structuring revenue models </li></ul><ul><li>Repositioning marketing </li></ul><ul><li>Re-orienting sales/support staff </li></ul><ul><li>Surviving market shakeout </li></ul>
  40. 40. Shift from Selling Boxes to Business-Oriented Services
  41. 41. Sell To CXOs, Not Geeks
  42. 42. Transform Firefighters to Business Consultants
  43. 43. Provide Insight, Not Data
  44. 44. Change Your Business IT Services Business Services Information Services Business Evolution
  45. 45. SaaS/Cloud Computing Lifecycle Requirements User Centricity Agile Development Transaction Mgmt System Security Certifications Service Orientation Professional Services Online Procurement ‘ Try & Buy’ Trials Tele-Sales Web/Search Marketing Service Delivery Infrastructure Ecosystem of Partners Web Support SLAs
  46. 46. Raising Your Value By Leveraging the ‘Cloud’ Implementation/Maintenance Services Multivendor Integration Services Managed Services Consulting Services IT/BPO Tactical Strategic Supplier Transformer