How big is the cloud in Australia?


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  • This is a lot of change to consider but there is yet another disruptive dimension as well – we mentioned the increase in mobile computing users – among humans, but we also need to recognize that in terms of overall computing and communications volume, there is a major transformation taking place related to the rise of virtualization, smart meters and embedded computing. The numbers you can see on this slide – which are estimates for 2010 are pretty staggering. (read a couple of data points)But it is the one on the bottom right hand corner you really need to consider – 7 billion communicating devices and 5 billion are not computers
  • We expect many organizations will end up with hybrid environments where they opt to use public services for some functions, where the public nature and global reach of the business make sense, but will rely on internal private cloud architectures for critical business activities.
  • Definition: Subscription to and usage of Cloud Services that are delivered over a virtual private network, where a private instance of the service is based on a common virtual infrastructure model, and wherein an integrated SLA with business relevant metrics is offered.Building blocks of the evolutionary component of the cloud + disruptive attributes
  • The hosting business is being transformed by cloud computing, new entrants can offer attractive new services and the market continues to evolve.Cloud impacts the economics of model of hosting in key ways:more difficult capacity management and potentially lower returns on invested capital;challenges in analyzing deal profitability and a shift in how to achieve good margins in managed hosting;uncertain software licensing costs; andincreased unpredictability of revenue.Service providers must determine how to meet the new technical and business challenges, identify the products that can be sold now, market successfully to early adopters, and create a foundation for future products and mainstream adoption.New offerings are emerging to compete with traditional hosting services, eg: utility hosting, virtual data center hosting, cloud hosting, and platform as a service (PaaS).The initial challenges of cloud evolution are centered on installation and provisioning. These are business challenges, not just technical challenges, requiring process and system integration across the service provider organization.The early adopters of cloud infrastructure services are existing hosting customers, Web 2.0 startups, research organizations and Type "A" enterprises. Mainstream adoption will require decreasing the real and perceived risks of moving operations into the cloud.RecommendationsFocus on fully automating sales quotes and provisioning, and driving down quote and installation times. Immediately offer utility hosting. Even if you are not prepared to offer a virtualized platform, you must offer flexible pricing, or you will be at a severe competitive disadvantage.If you do not have virtualization expertise, consider acquiring a small provider of cloud hosting services with strong engineering expertise and tools for managing a shared, virtualized platform.Include complementary network services that enhance remotely hosted services, such as WAN optimization or an application delivery network.
  • DEFINTIONSAll dollars expressed in AUD for 2010 and Cumulative Annual Growth References 2014IDC SourceWorldwide and Regional Public IT Cloud Services 2010-2014 Forecast IDC #223549 June 2010IDC Source Australia Cloud Services 2010-2014 Forecast Analysis IDC ##AU2577407S July 2010 CAGR%Exchange Rate AUD/USD 0.90IDC definition Secondary Market Segments and SaaS, PaaS, IaastaxomonyAaaS = SaaSCollaborative Applications, Content Applications, Enterprise Resource Management Applications, Supply Chain Management Applications, Operations & Manufacturing Applications, Engineering Applications, Customer Relationship Management Applications, Application Management, Hosted Application ManagementPaaSApplication Development Software, Application Server Middleware, Data Access, Analysis, and Delivery, Information & Data Management, Integration & Process Automation Middleware, Other Application Dev and Deployment, Quality & Life-Cycle Tools, Enterprise PortalsIaaSSystem and Network Management Software, Security Software, Storage Software, System Software, Servers, Storage, Networks, Clients, Hosted Infrastructure Services
  • Promote the upcoming cloud sessions if relevant as a call to action
  • Promote the upcoming cloud sessions if relevant as a call to action
  • How big is the cloud in Australia?

    1. 1.
    2. 2. HOW BIG IS THE CLOUD?<br />PHILIP GOLDIE, Director, Server & Tools<br />OSCAR TRIMBOLI, Director, Information Worker<br />LINUS LAI, Associate Director, IDC<br />#apc2010<br />@philgoldie<br />@oscartr<br />
    3. 3. …how big is the opportunity?<br />…where is the opportunity?<br />…how do I capture the opportunity?<br />
    4. 4. The Cloud and You:New Delivery Models Bring New Opportunities<br />Linus Lai<br />IDC Australia<br />
    5. 5. Agenda<br />5<br />
    6. 6. 6<br />
    7. 7. The “New Normal”<br />Q. Prioritize the following business goals as they relate to your organization by allocating 100 points among them. The more points you allocate, the more important the business goal. <br /><ul><li>Business priorities are quickly returning to pre-recession status
    8. 8. Refocusing on “doing the right thing” again, not the least expensive
    9. 9. For customers
    10. 10. For shareholders
    11. 11. For competitive advantage
    12. 12. Efficiency still matters, but not if it impacts business performance
    13. 13. Availability
    14. 14. Flexibility</li></ul>Source: IDC Server Virtualization MCS 2007, 2008, 2009; IDC Datacenter and Cloud Survey 2010<br />
    15. 15. Recovery and Transformation<br />Key Market Transformations<br />Telecom – fiber, 3G/4G wireless, converged IP delivery, new distribution models<br />IT – market expansion through disruptive Cloud model, driving re-architecture of vendor models, offerings, identities<br />Ascendance of mobile devices – and apps – challenging primacy of the PC<br />Shift of customer “design point” toward SMB/consumer, emerging markets<br />8<br />
    16. 16. 2010: Intelligent Economy Emerging<br />1 billion mobile Internet users; 500,000 mobile phone apps<br />700 million social networkers<br />630 million laptops; 80 million netbooks<br />1.2 billion mobile phones; 220 million smart phones<br />9<br />Public cloud spending $23 B<br />50 million servers, half virtual<br />20 million smart meters in US<br />7 billion communicating devices in place – 5 billion of these are NOT computers<br />
    17. 17. 10<br />
    18. 18. What is Cloud Computing Today?<br />The Future<br />High Security Cloud<br />Cloud services are consumer and business products, services and solutions delivered and consumed in real-time over the Internet<br />They have the following key attributes<br /><ul><li>Shared
    19. 19. Self-service
    20. 20. Elastic
    21. 21. Usage-based pricing</li></ul>High Availability Cloud<br />Today<br />Multi PurposeClouds<br />Test & Dev Cloud<br />HPC <br />Cloud<br />Low Cost<br />Cloud<br />Comms Cloud<br />11<br />
    22. 22. Three Basic Layers of the Cloud<br />Workloads<br />Platforms<br />ERP<br />email<br />CRM<br />OLTP<br />Collaborative<br />Decision Support<br />Web<br />App. Dev.<br />Streaming<br />Security<br />Caching<br />Networking<br />File<br />Sys Mgmt<br />Technical<br />Server<br />Storage<br />Network<br />IT Cloud Services<br />Cloud Applications<br />Software as a Service (SaaS)<br />Cloud Platform<br />Platform as a Service (PaaS)<br />Cloud Infrastructure<br />Infrastructure Services (IaaS)<br />12<br />
    23. 23. Cloud Market Will Win More of Australia ICT Spend<br />9.4%<br />Proportion of total<br />AUD million<br />Cloud services will not replace traditional delivery models in all situations<br />Though cloud is not a large part of the overall spend, it’s growing much faster<br />This rapid growth is attractive & causing new entrants to emerge, and non-traditional IT vendors to pay attention<br />The age of influence for the product vendors is waning<br />22.5%<br />CAGR growth to 2014<br />5.5%<br />* DC spend is categorised by server/storage hardware and software<br />13<br />
    24. 24. Uncertainty About Cloud is Dissolving<br /><ul><li>In 12 months, cynicism about cloud computing has nearly disappeared
    25. 25. Clear that cloud computing alternatives will be considered for application upgrade and replacement</li></ul>Source: IDC Cloud Computing Survey, April 2010 (N=600 in Aust, Korea, India, S’pore, PRC & HK) <br />14<br />
    26. 26. Various Deployment Models EmergingHosted & Outsourced<br />Outsourced Enterprise <br />Data Center<br />Enterprise <br />Data Center<br />Hosted Infrastructure & Applications<br />SaaS, IaaS & PaaS<br />Hosted and managed by the internal IT department<br />Hosted and managed by an external service provider on a ‘1:many’ basis. Pricing model can be fixed.<br />Public Cloud services delivered over the internet based on a ‘pure’ utility pricing model<br />Hosted and managed by an external service provider on a 1:1 basis<br />15<br />
    27. 27. Various Deployment Models EmergingThe Virtual Private Cloud<br />Outsourced Enterprise <br />Data Center<br />Enterprise <br />Data Center<br />Virtual Private Cloud<br />Hosted Infrastructure & Applications<br />SaaS, IaaS & PaaS<br />Leveraging the Public Cloud attributes within the network perimeter<br />Hosted and managed by the internal IT department<br />Hosted and managed by an external service provider on a ‘1:many’ basis. Pricing model can be fixed.<br />Public Cloud services delivered over the internet based on a ‘pure’ utility pricing model<br />Hosted and managed by an external service provider on a 1:1 basis<br />16<br />
    28. 28. Customer Focus on Private Clouds<br />2011 will be a big year for "private clouds"…:<br />Why?<br /><ul><li>Continued concerns about cloud security, availability and performance
    29. 29. Ongoing drive to maximize return on existing IT assets
    30. 30. 2010 has been a big year for the announcement of "private cloud" offerings from virtually all major IT suppliers
    31. 31. Clouds typically package infrastructure, platforms and applications together so…
    32. 32. Private cloud announcements will drive many strategic partnerships, joint ventures and acquisitions/mergers.</li></ul>17<br />
    33. 33. Workloads in the Cloud - Australia<br />18<br />
    34. 34. Not All Applications are Suitable<br />High<br />Low<br />Readiness Factor<br />Where to Start?<br />Storage as a Service<br /><ul><li>Backup/Restore Solutions
    35. 35. Information archival
    36. 36. Data intensive workloads</li></ul>Established packaged offerings<br /><ul><li>e-mail
    37. 37. Collaboration</li></ul>Batch processing<br />Pre-production systems <br /><ul><li>Software development
    38. 38. Test</li></ul>Sensitive data <br /><ul><li>Employee Information
    39. 39. Medical Records</li></ul>3rd party software which:<br /><ul><li>Does not have a virtualization or Cloud aware licensing strategy</li></ul>Chargeback or utilization not enabled<br />Requires Mass Customization <br /><ul><li>High auditability & accountability
    40. 40. Subject to Sarbanes-Oxley
    41. 41. IFRS
    42. 42. JSOX</li></ul>19<br />19<br />
    43. 43. Mapping the Journey:Private Cloud Adoption Rates<br /><ul><li>A workload focus allows a cloud strategy to be built
    44. 44. Consider the Cloud as an extension of your sourcing strategy, not a technology
    45. 45. Building IT services in the Cloud is a long journey, comprised of many steps
    46. 46. Honest appraisal may reveal that enterprises cannot complete the journey on your own
    47. 47. Selective use of public cloud services, external private clouds and cloud appliances along with existing delivery models will become the norm by 2015</li></ul>20<br />
    48. 48. 21<br />
    49. 49. Impact of the CloudThe Channel Viewpoint <br />Do you view cloud computing as:<br />The majority of channels view the cloud as an interesting emerging model – and realize that it is redefining the channel ecosystem and their business model. Importantly, 1 in 2 see it as an opportunity.<br />Source: IDC PartnerConnect Quick Poll (April 2010)<br />22<br />
    50. 50. The Move Towards ServicesImpact of the Cloud<br />Do you currently/plan to offer cloud computing professional or consulting services? <br />Cloud is a highly consultative engagement with high professional services attach and it promotes channel transition to services oriented business model.<br />Source: IDC PartnerConnect Quick Poll (April 2010)<br />23<br />
    51. 51. Channel Partners in Asia/Pacific IDC Partner Segmentation Model<br />24<br />
    52. 52. Understanding if current Architecture (Infrastructure and Applications) is ready for Private/Hybrid Cloud<br />Migrating to a Cloud Architecture<br />Securing Converged IT Department Skill Sets<br />Defining Provisioning Policies when Migrating to Private Cloud<br />Defining Policies for Deploying Workloads in a Hybrid Environment<br />Charging Line of Business for Virtual Assets<br />Private Cloud ImplicationsWhat Activities will End-Users struggle with?<br />25<br />
    53. 53. Cloud ImplicationsOpportunities Require a New Mix of Skill Sets<br />26<br />
    54. 54. Potential Go-to-Market ModelBlended Consulting & Integration Services<br />Access to Vendor/Partner Developed Knowledge Base<br /><ul><li> A number of product (h/w & s/w) vendors are building out consulting capabilities to get their brand in front of the CIO
    55. 55. However, the right skills are in short supply, so partners can and will play an important role
    56. 56. Go-to-market conflict needs to mitigated and customer demand will be critical</li></ul>Vendor <br />Service Delivery<br />Sub-contracted<br />Partners<br />Full Service Enabled Partners<br />Vendor Account Management<br />Customer<br />27<br />
    57. 57. Adapt or Vanish:Hosting and Managed Infrastructure Services<br />Both hosting and managed infrastructure services remain viable business models, <br />However, it will be essential to transition delivery models to use cloud computing<br />The profitability of managed infrastructure offerings will rapidly erode as new players enter the market with cloud-based models<br />28<br />
    58. 58. Channel Partners in Asia/Pacific IDC Partner Segmentation Model<br />29<br />
    59. 59. Potential Go-to-Market ModelPartnering to Deliver Applications via the Cloud<br />International ISVs (e.g. SAP)<br />Cloud Datacenter Providers, Telcos, Larger SIs with Cloud Datacenter Resources <br />Local ISVs<br />Platform as a Service Players (e.g. and Azure)<br />Internationally Delivered Software as a Service<br />Locally Delivered Software as a Service<br /><ul><li>Provision of a Virtualized Infrastructure for Delivery along with Customer Billing Capabilities
    60. 60. Provision of a Plug and Play Cloud Infrastructure along with a Development Platform
    61. 61. With Traditional On-Premise Licensing</li></ul>30<br />
    62. 62. Channel Partners in Asia/Pacific IDC Partner Segmentation Model<br />31<br />
    63. 63. Three Market Models for Reselling a Public Cloud Service…<br />Q. How would you prefer to be compensated for reselling the cloud service from a cloud provider?<br /><ul><li>Referral
    64. 64. One time referral fee paid to reseller and distributor
    65. 65. Annuity
    66. 66. A.k.a. pass through; recurring revenue
    67. 67. May include renewals
    68. 68. May include tiered programs (basic, gold, platinum, etc.)
    69. 69. White label
    70. 70. Allows partner to resell cloud service under their own brand name
    71. 71. Partner can add cloud capabilities to their other solutions and service offerings
    72. 72. Pass through business model; partner gets X% gross margin
    73. 73. Service delivered by cloud provider on cloud provider’s infrastructure
    74. 74. Partner does first level support
    75. 75. Simple Referral fees are less popular, but not out of the question </li></ul>Source: IDC PartnerConnect Quick Poll (April 2010)<br />32<br />
    76. 76. Positioning Cloud Resale for Your Partners<br />Pros<br />Cons<br /><ul><li>Ease of doing business
    77. 77. Low partner investment and risk
    78. 78. Not an annuity, no recurring revenue
    79. 79. Partner less visible in customer’s cloud planning
    80. 80. Process intensive in two-tier model</li></ul>Referral Program<br /><ul><li>Well understood business model
    81. 81. Annuity type recurring revenue
    82. 82. Partner maintains customer relationship
    83. 83. Cloud provider must manage for channel conflict
    84. 84. Low margin business
    85. 85. Will cloud providers see value of distributors</li></ul>Traditional VAR/Reseller Program<br /><ul><li>Quick entry into cloud provider market
    86. 86. Easy to integrate cloud offerings into other partner solutions
    87. 87. Partner owns the cloud brand
    88. 88. Partner assumes more risk
    89. 89. Tech support model complex</li></ul>White Label Program<br />33<br />
    90. 90. Essential Guidance for PartnersQuestions to be Addressed<br />Private Cloud:<br />Have you got the right in-house skills?<br />Are vendors providing incentives & training for partners to develop specific skill-sets for the private cloud?<br />Are you able to leverage any productized professional services through from vendors to address private cloud type of requirements?<br />Do you have reasonable GTM conflict sufficiently addressed from vendors as you build out your own consulting capabilities?<br />Public Cloud:<br />How are you drafting commercial agreements with particular focus on SLAs?<br />How are you communicating your value proposition over going direct to the vendor to your customers?<br />What training and education are you receiving on the public cloud?<br />What about new consulting and integration skill-sets?<br />Are you involved in testing new partner programs to resell public cloud services?<br />34<br />
    91. 91. If you have additional questions, please contact me at:<br />Linus Lai<br /><br />+612 9925 2274   <br />Questions?<br />35<br />
    92. 92. SaaS<br />$AUD 1,622m<br />CAGR 5.3% <br />$AUD 70m<br />CAGR 31.3% <br />$AUD 274m<br />CAGR 15% <br />PaaS<br />$AUD 121m<br />CAGR 58% <br />$AUD 128m<br />CAGR 36% <br />$AUD 1,445m<br />CAGR 7.5% <br />IaaS<br />$AUD 54m<br />CAGR 30% <br />$AUD 97m<br />CAGR 44% <br />$AUD 1,350m<br />CAGR 6.2% <br />SOURCE: IDC<br />PUBLIC<br />ON PREMISE<br />HOSTED<br />
    93. 93. Wednesday September 1<br />
    94. 94. Thursday September 2<br />
    95. 95. the cloud #apc2010…<br />attend the cloud track sessions<br />sign up today for 250 internal users BPOS at the GPS booth<br />Start the Azure conversation<br />