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.

1. Cloud IT and Cloud Business: Going Mainstream
Open World Forum
Eurosites George V
Paris, France
P i F
September 22, 2011
Bill McNee
Founder
Fo nder and CEO
Saugatuck Technology
bill.mcnee@saugatucktechnology.com
Westport, CT ● Falmouth, MA ● Santa Clara, CA ● Frankfurt, Germany
Copyright 2011 ǀ Saugatuck Technology, Inc. ǀ All Rights Reserved ǀ www.saugatucktechnology.com ǀ +1.203.454.3900
1

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
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Page: 2

3. Cloud IT and Cloud Business
Cloud 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 www.saugatucktechnology.com
Page: 3

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 www.saugatucktechnology.com
Page: 4

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 www.saugatucktechnology.com
Page: 5

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 www.saugatucktechnology.com
Page: 6

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 www.saugatucktechnology.com
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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 Business
High
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 Explode
Low
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 www.saugatucktechnology.com
Page: 8

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 company's preference for deploying NEW by size of company!
software (on a continuum from Cloud-based to On-
premise) will be: < 100 Employees
70.0% 2010 2012 2014
60.0% 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: S
S 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
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Page: 9

10. Cloud IT Solutions in Production Systems
Today 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: S
S 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
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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 www.saugatucktechnology.com
Page: 11

12. Summary
Cloud Business
Cloud
Cl d IT
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