Saugatuck Cloud Slam Blue Skies

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Presentation at Cloud Slam 09 Friday April 24, 2009 1500 EDT

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Saugatuck Cloud Slam Blue Skies

  1. 1. Blue Skies – The Air Clears on Cloud Computing Mike West Westport, CT Vice President Phone: 203-454-3900 Program Director Cloud Research Board ™ Saugatuck Technology
  2. 2. Cloudy Language • WALL STREET JOURNAL BIZTECH BLOG – “Overuse of the Term 'Cloud Computing' Clouds Meaning of the Tech Buzz Phrase” (September 23, 2008) – “Microsoft Comes up with Yet Another Meaning for „Cloud Computing‟ ” (October 2, 2008) • The “ubiquitous buzzword . . . that everyone seems to interpret as a different animal.” Forbes • According to Gartner, Cloud Computing is “creating a lot of confusion in the market” • “There is a clear consensus that there is no real consensus on what cloud computing is.” Irving Wladawsky Berger, Chairman Emeritus – IBM Academy of Technology Page: 2 Entire contents © 2009 Saugatuck Technology Inc. All rights reserved.
  3. 3. CIOs on Cloud Computing Recent Saugatuck interviews with CIOs revealed: • “Cloud computing is anything the user wants it to be. OK, that's probably more facetious than you wanted to hear. But it really is true – cloud computing means the availability of IT, delivered as a service, from a provider unknown to or unseen by the user. It can be us in house; it can be IBM; it can be SalesForce.com…” Divisional CIO, Top-5 US brokerage / financial services firm • “Cloud computing is the outsourcing of IT infrastructure. I see the cloud including SaaS and computing, Storage, etc. I don't know that we would outsource IT management to a cloud provider…” CIO, mid-sized US manufacturing firm (with 7 small subsidiaries) • “When I think of “Cloud Computing, I think of it as the ability to dream software solution dreams. I then think of rendering it in a language of my choice. And finally, being able to somehow magically quot;pushquot; code into the quot;Internet Cloudquot;, without fore-knowledge or regard for any of the layers underlying my code (DBMS, OS, connectivity or Computer)… The leading vendors are Google, Facebook, Amazon.com, and Salesforce.” CIO, Global Retailer • “Cloud Computing is about on-demand infrastructure that can be flexibly deployed based on my computing needs. Longer-term, it is all about building and deploying new apps in the cloud – as we shift the way we deploy IT from internally-managed datacenters to centralized utilities... Amazon and Google are the early compute-focused players, but Cloud Computing will cross the entire ecosystem of providers within a short time…” SVP Fin/HR Apps at Top-5 US Bank Source: Saugatuck Technology Page: 3 Entire contents © 2009 Saugatuck Technology Inc. All rights reserved.
  4. 4. What are Cloud Computing and Software as a Service? Saugatuck Definitions: • Cloud Computing encompasses on-demand infrastructure (compute, storage, networking), and on-demand software (OSs, apps, middleware, management, dev. tools), customized dynamically to fit current and immediate business process requirements, along with the ability to deliver and manage those business processes. • Software as a Service (SaaS) refers to software provided and used in a utility computing context, where the services provider delivers the functionality of the application software over the network through a services interface. Typically these services are sold via either a subscription model, or on a utility-style, quot;pay as you goquot; (PAYG), or per unit, basis. Entire contents © 2009 Saugatuck Technology Inc. All rights reserved.
  5. 5. Post-Crash Business Drivers for Cloud Buyers Business Drivers Implementation cost 43% Availability of cost-effective, responsive tiered user support 30% Key Drivers Implementation timeframe • Cost 26% Solution deployment/usage methods (on premise, hosted … • Support 25% Availability of implementation resources • Speed 23% Service Relationship with technology vendor 20% Payment methods (license plus maintenance, usage-… 18% No-obligation trial or pilot program 17% Decreasing Loyalty Relationship with implementer (VAR, system integrator, etc) 16% to Legacy Brands Services delivered by brand name vendor 16% and Relationships? Availability of multi-year pricing incentives 15% Availability of flexible billing terms 14% % 10% 20% 30% 40% 50% Percent Source: Saugatuck Technology Inc., 2009 SaaS Survey (Dec „08), N=1788, TOP THREE so results equal more than 100% Saugatuck Insight: Far and away the most important business driver for Cloud buyers is Implementation Cost. Given this global survey was taken 8-10 weeks after the start of the economic collapse (in mid-September 2008), it is not surprising to see this result. At the same time, it is interesting to note that buyers rank the relationship with existing channel / implementation partners and brand name vendors at the low-end of business drivers, along with multi-year pricing incentives and billing flexibility. Page 5 Entire contents © 2009 Saugatuck Technology Inc. All rights reserved.
  6. 6. The Evolving Cloud Landscape The focus shifts over time from cost-effective delivery of stand-alone application services (Wave I), to integrated business solutions enabled by web services APIs and ESBs (Wave II), to workflow- and collaboration-enabled business transformation (Wave III), leading to measured, monitored and managed business processes (Wave IV). By 2012, Cloud Computing will capture at least twenty five percent of IT spending growth. Beyond Software-as-a-Service: Cloud Computing High SaaS 1.0 SaaS 2.0 Cloud Computing Wave III: 2008-2013 Wave IV: 2011-2016 Wave I: 2001-2006 Wave II: 2005-2010 Workflow-Enabled Measured, Monitored, Managed Cost-Effective Integrated Business Transformation Business Processes Software Delivery Business Solutions Post-SaaS Adoption Adoption • End-to-End Cloud Business Processes • Intelligent Hubs Linking Platforms Ubiquitous SaaS Adoption • Virtualization on Mobile Devices • Focus on Business Transformation Mainstream SaaS Adoption • Elastic Cloud Infrastructure • ISV to SaaS Enablement • Integrated w/ Business • Standards for Workload Portability • Server and Application Virtualization • SaaS Integration Platforms Early SaaS Adoption • SLAs for Composite Service Offerings • Stand-alone Apps • SaaS Development Platforms (PaaS) • Business Marketplaces • Support at Business Process Level • Multi-tenancy • Public Cloud Infrastructure (IaaS) and SaaS Ecosystems • Limited Configurability • Cloud Collaboration Platforms • Customization Capability • Focus on TCO / rapid • Customized, Personalized Workflow • Focus on Integration deployment Low 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Saugatuck Technology Page 6 Entire contents © 2009 Saugatuck Technology Inc. All rights reserved.
  7. 7. Cloud Technology Considerations by Geography Technology Considerations United States Europe Asia 69.8% 61.0% 73.5% Robust backup/recovery capabilities 67.8% 57.6% 71.8% higher levels for all responses Robust disaster recovery capabilities 51.4% 49.9% 63.5% Software development platform & tools wide range (45 points) 49.0% 46.6% 61.7% Web Services API 45.5% 47.8% 59.1% SLA compliance data 40.6% 42.5% 56.0% SOA architecture 37.7% 46.7% 53.7% Display data on mobile devices 32.4% 42.1% 55.9% Multi-tenancy based solution 37.2% 41.4% 55.0% Support for Web 2.0 mashups 34.3% 45.1% 52.4% Update data via mobile devices 24.9% 41.9% 53.0% Appliance form factor Source: Saugatuck Technology Inc., 2009 SaaS Survey (Dec „08), N=1788 Saugatuck Insight: Notable differences in the key technology considerations driving demand across geographies, especially among Asian executives. Mobile device support is more important in Europe and much more important in Asia than in the United States. Please note the much wider range of responses in US and higher levels for all responses in Asia Page 7 Entire contents © 2009 Saugatuck Technology Inc. All rights reserved.
  8. 8. Channel Preferences by Region Leading Regional Preference IT Consultancy United States Direct from SaaS Solution Provider Service Industry-specific VAR or System Integrator Europe Local/Regional VAR or System Integrator Managed/Hosted Services Provider Asia Business Consultancy (e.g., accounting firm) % 20% 40% 60% Source: Saugatuck Technology, Web Survey December 2008, N=1788 Saugatuck Insight: Channel strategy must be tailored to geography. The US ranked “direct from provider” highest; Europe and Asia ranked “IT consultancy” highest. IT consultancy channel is ranked highest overall due to ranking in Europe and Asia. Note also the much higher preference for “Business consultancy” in Europe and Asia. “Local/Regional VAR or system integrator” is most popular in Asia. Page: 8 Entire contents © 2009 Saugatuck Technology Inc. All rights reserved.
  9. 9. Purchase Plans – Collaboration & Social Computing Please indicate when your company plans to purchase a SaaS solution in each of the following categories: All Sizes 100-300 300-500 500 to 1000 1000 to 2500 2500 to 5000 Over 5000 2009 2011 2009 2011 2009 2011 2009 2011 2009 2011 2009 2011 2009 2011 > 60 % 52 - 60 % Email 48.4% 64.8% 54.5% 71.8% 51.3% 72.8% 52.1% 69.3% 47.0% 62.8% 44.9% 59.9% 42.9% 56.5% 44 - 52 % Web Conferencing 47.7% 66.7% 44.5% 67.6% 45.5% 69.7% 49.0% 69.5% 45.2% 63.6% 53.6% 69.0% 49.3% 63.9% 36 - 44 % Calendaring 41.0% 59.4% 46.1% 64.3% 46.8% 72.5% 40.2% 64.1% 40.7% 58.3% 42.1% 57.3% 35.2% 48.9% < 36 % “Office” Suite 40.9% 61.2% 46.0% 69.0% 42.2% 67.2% 39.2% 61.2% 36.1% 55.6% 34.7% 51.5% 41.7% 58.8% Project Management 40.8% 62.4% 44.5% 66.1% 40.3% 68.2% 41.6% 66.8% 40.0% 61.9% 43.3% 59.1% 37.7% 56.3% Business Collaboration 39.6% 61.3% 40.4% 62.0% 39.1% 67.0% 43.0% 64.0% 33.2% 60.4% 41.8% 59.4% 39.5% 57.9% Forums 34.7% 53.5% 34.0% 56.2% 37.7% 61.9% 34.4% 56.3% 31.5% 50.9% 37.8% 54.9% 34.5% 47.1% “Communities” 34.7% 55.0% 36.0% 57.7% 37.8% 62.2% 36.2% 56.9% 31.2% 53.5% 32.7% 56.4% 33.9% 48.9% Social Networking 33.9% 51.4% 37.9% 55.9% 34.8% 58.8% 35.5% 54.4% 31.9% 50.9% 33.1% 53.0% 31.0% 43.2% Whiteboards 33.0% 53.3% 34.1% 54.8% 36.7% 62.9% 36.2% 58.5% 28.0% 53.1% 38.4% 55.5% 29.2% 44.8% Blogs 32.9% 50.9% 34.1% 54.6% 37.1% 60.3% 33.7% 52.3% 30.7% 47.4% 31.3% 52.1% 31.1% 44.5% Content Tagging 32.8% 52.9% 35.3% 54.7% 37.7% 63.2% 33.1% 57.2% 29.2% 52.8% 37.6% 54.5% 28.7% 44.4% Wikis 32.5% 50.6% 33.7% 51.6% 37.6% 56.8% 30.5% 52.5% 29.0% 47.9% 32.5% 54.2% 31.9% 45.9% Source: Saugatuck Technology, Web Survey December 2008, N=1788 Saugatuck Insight: The sweet spot in collaboration and social networking tools is clearly the small and mid-sized market (100-1000 employees), with the 300-500 employee segment particularly promising. It is worth noting that for all sizes, an upside of nearly 20 percent from 2009 to 2011 pertains to all categories of collaboration and social networking tools. However, large enterprises (2,500 employees and above) do not show the same level of interest in these solutions in comparison to smaller enterprises with the exception of Project Management and Business Collaboration, where there is a nearly 20 percent increase from 2009 to 2011. Entire contents © 2009 Saugatuck Technology Inc. Page: 9 All rights reserved.
  10. 10. SaaS and Core Business Systems Between 2009 and 2012, at least 40 percent of upper mid- to large-enterprises will seriously evaluate SaaS-based “core” financial solutions, as well as broader operational systems and requirements (e.g., order management, procurement, ERP, HR). Key catalysts that will drive mid-to-large High Adoption of SaaS enterprises to migrate to SaaS-based for Collaboration, financial systems (“Core” and “Non-Core”) Self-Service, CRM • Dramatically lower costs and SFA • Simplification of the upgrade / release management process “Upper-Mid” to • Powerful integration tools (apps / data) “Small” to “Mid” “Large” Enterprise • Advances in SaaS application customization Enterprise capabilities to support personalized workflows Broad SaaS • Easier access to next-gen technology Adoption and architectural advances Curve Adoption of SaaS for “Core” and “Non- Core” Financial Systems / SaaS “Tipping-Point” Operational Processes (General Market) Early Mainstream Early Mainstream Low Adoption Adoption Adoption 2014 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Saugatuck Technology Entire contents © 2009 Saugatuck Technology Inc. Page 10 All rights reserved.
  11. 11. Saugatuck Cloud Ecosystem Model Level 4; BPO / Managed Services. Specialized expertise often delivered in conjunction with a Cloud- based solution, e.g., Mobility as a Service, Cloud-based security. Level 3: SaaS (Waves I-III) and related services. Business solutions delivered from the Cloud, typically in a multi-tenant architecture, and billed under subscription model. Level 2: Cloud development, PaaS, SaaS integration, Service Hubs, including billing, administration, aggregation, sec urity and mobility solutions, systems and infrastructure management, data warehousing, data access and analysis, and related professional services. Level 1: Cloud-based On- Demand infrastructure providers and platforms that host SaaS and other on-demand solutions and provide service offerings to manage infrastructure platforms (collocation); Level 0: Suppliers of hardware, system software and utilities, data center management Source: Saugatuck Technology software, networking Entire contents © 2009 Saugatuck Technology Inc. equipment, 11 Page hardware and software, and All rights reserved. associated services
  12. 12. “. . . –as-a-Service” Taxonomy IaaS PaaS SaaS ITaaS Infrastructure-as-a-Service Platform-as-a-Service Software-as-a-Service IT-as-a-Service Business Process Outsourcing, Business Process Outsourcing, Business Process Outsourcing, Business Process Outsourcing, Level 4 Level 4 Level 4 Level 4 Managed Services, Managed Services, Managed Services, Managed Services, Business & Information Services Business & Information Services Business & Information Services Business & Information Services Level 3 Level 3 Level 3 Level 3 Software as a Service, Software as a Service, Software as a Service, Software as a Service, and Related Services and Related Services and Related Services and Related Services Cloud Development, SaaS Cloud Development, SaaS Cloud Development, SaaS Cloud Development, SaaS Level 2 Level 2 Level 2 Level 2 Integration, Services Integration, Services Integration, Services Integration, Services Hubs, e.g., Billing, Security, Mobility Hubs, e.g., Billing, Security, Mobility Hubs, e.g., Billing, Security, Mobility Hubs, e.g., Billing, Security, Mobility , and Related Services , and Related Services , and Related Services , and Related Services Cloud Infrastructure, Cloud Infrastructure, Cloud Infrastructure, Cloud Infrastructure, Level 1 Level 1 Level 1 Level 1 e.g., Hosting, Execution and e.g., Hosting, Execution and e.g., Hosting, Execution and e.g., Hosting, Execution and Storage, And Related Storage, And Related Storage, And Related Storage, And Related Services Services Services Services Hardware, Software, Networking Hardware, Software, Networking Hardware, Software, Networking Hardware, Software, Networking Level 0 Level 0 Level 0 Level 0 and Services and Services and Services and Services Source: Saugatuck Technology Saugatuck Insight: IaaS providers (Level 1) serve as channels for integration, security, mobility, billing & payments, and other Level 2 providers. PaaS providers (Level 2) may also refer or offer Level 1 hosting services, either through partnership, portability or platform capabilities of their own. SaaS providers (Level 3) may partner with Level 2 billing and payments or security providers or with Level 4 BPO / MSP providers. ITaaS providers may offer the full range of ecosystem Inc. services. Entire contents © 2009 Saugatuck Technology Page 12 All rights reserved.
  13. 13. Key Findings – Recent Saugatuck Cloud Research Saugatuck Insights: • Despite the economic meltdown, purchase plans for Cloud Computing solutions, including SaaS and Cloud Infrastructure, remain strong in 2009 and for 2010 – across all geographic and customer segments. • A new ecosystem is forming around Cloud Computing that will transform the IT sector. This inevitable transformation will result in a multi-level ecosystem, ranging from technology suppliers through Cloud Computing providers to business services providers. • While Cloud Computing is emerging (Wave IV), SaaS adoption has clearly moved “beyond the tipping-point” (Waves I-III) – Accelerating “mainstream” adoption of SaaS shifts demand to core business systems, not only among SMBs but also Large Enterprises. • Hybrid application architectures emerge – SaaS increasingly linked with on-premise data, applications and processes through Web Services-based Integration APIs. • SaaS Analytics, dashboards and BI/performance management tools driving a metrics-based approach to business services. • A new SaaS-based business services delivery model is emerging – as onshore and offshore BPO providers are forced to rationalize their one-to-one outsourcing models, reduce costs and bring greater process efficiency to their clients. Offshore providers begin to embrace SaaS / Cloud across multiple dimensions of their businesses. • The most aggressive adopters of SaaS are low-to-midsized SMBs with 100-499 employees. A small, emerging group of SMBs, labeled by Saugatuck as “The New SMB,” forego traditional IT and immediately establish themselves with SaaS- and cloud-based IT. • Cloud, SaaS and Mobility are helping to make the “boundary-free enterprise” a reality. Cloud Computing has emerged -- and will continue to evolve – to enable increasingly networked, mobile businesses, staffed by knowledge workers that are exchanging information and doing business with organizations across the globe in an economic environment favoring agility and speed of response. Source: Saugatuck Technology Page 13 Entire contents © 2009 Saugatuck Technology Inc. All rights reserved.
  14. 14. The Boundary Free Enterprise 20th Century Enterprise – 21st Century Enterprise - “Within Bounds and Borders” “Boundary-Free and Global” Economies of Scale Agile Economies Volume Production Speed of Response Industrial Plant Workers Mobile Knowledge Workers Local, Regional, National Global Organizations Vertical Integration Virtual Integration Hierarchical Structures Distributed Networks Planes, Trains and Automobiles Mobile Devices, Browsers and the Cloud Source: Saugatuck Technology Entire contents © 2009 Saugatuck Technology Inc. Chart: 14 All rights reserved.
  15. 15. How to Contact: Regional Sales Offices US OFFICES INTERNATIONAL Headquarters Germany Saugatuck Technology Inc. Saugatuck Technology Inc. 49 Riverside Ave. Bluecherstr. 4 Westport, CT 06880 D 65343 Eltville am Rhein USA Germany (P) +1.203.454.3900 (P) +49.6123.630285 Regional Sales: Al.Vanek@Saugatech.com Regional Sales: frank.sempert@saugatech.com Silicon Valley • •• Saugatuck Technology Inc. 5201 Great America Parkway, Suite 320 Santa Clara, CA 95054 USA (P) +1.408.727.9700 Regional Sales: Andrew.Jeffs@Saugatech.com Are you getting the best research, insight, and advice on disruptive IT? Register to receive Saugatuck‟s complimentary Research Alerts, and browse our comprehensive Research Library on topics such as SaaS, Open Source, Web 2.0, SOA and Utility Computing (among other). • To Register: http://research.saugatech.com/cgi-bin/order/signup3.pl • To Browse the Library: http://www.saugatech.com/researchbytopic.htm • ToEntire contents © 2009 Saugatuck Technology Subscription Research Service: Learn About Saugatuck‟s CRS Inc. http://www.saugatech.com/crs.htm All rights reserved.

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