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Keynote Address at 2013 CloudCon: A day in the life of the SMB by Michael Toplisek (EVP, Earthlink)
- 1. A Day InThe Life of the SMB Owner Mike Toplisek EVP Marketing & Sales
- 2. The SMB Very Small(1-25) Small (26-99) Medium (100-999) Site Location • Primarily one location or very localized • Localized geography • Dispersed but national geography IT Resources • Limited or no IT resources • Minimal influence of IT professional • Very few IT resources • 17% has dedicated IT full- time FTE (1.2 avg.) • Use local IT contractor • Small but dedicated IT • 75% has dedicated IT full-time FTE (4.2 on average)
- 3. IT as aService
- 4. Business Segment DrivesIT Behavior Very Small (1-25) Small (26-99) Medium (100-999) Site Location • Primarily one location or very localized • Localized geography • Dispersed but national geography IT Resources • Limited or no IT resources • Minimal influence of IT professional • Very few IT resources • 17% has dedicated IT full- time FTE (1.2 avg.) • Use local IT contractor • Small but dedicated IT • 75% has dedicated IT full-time FTE (4.2 on average) IT Service Purchase • Web or call center by owner with limited inputs • Web or call center by owner or manager with inputs from co-workers • In-house IT staff (FTE or part- time) are responsible for most IT Purchase Drivers • Business support needs • Price and awareness of SP service availability • Operational efficiencies • TCO and security • Business continuity and drive revenue growth • TCO, security and scalability IT Behavior • Secondary to running overall business • Limited knowledge on technology & SP options • Simple point products • “Settle” for and remain with current services • Secondary business function • Not familiar with new technology / services • Simple solutions • Most “settle” for current services • IT as a main function • Aware of new technologies, but not the business value • Inexpensive solutions with kernels of large business functionality • Advanced but tried & tested
- 5. WHY WOULD SMBS LEVERAGETHE CLOUD?
- 6. Cloud Solution forBusinesses of All Sizes With IT budgets relatively flat at most companies, and with competitors fighting for every scrap of business, CIOs can no longer afford to spend 70% to 80% of their precious funds supporting and maintaining existing systems. They must shift, permanently, a big chunk of their budgets into growth initiatives–IT projects and programs that open new markets and drive new business rather than just maintain the status quo. -Information Week “ ”
- 7. Typical SMB ITChallenges How do I minimize IT capital expenditures & reduce IT operating expenses, without sacrificing services? How do I reduce the complexity of my IT operations? How can I scale IT resources to keep pace with rapidly changing business requirements? How do I keep my mobile workers better connected to our applications and email? Does my backup plan adequately protect my data from man-made and natural disasters? Does our email platform enable maximum employee productivity and collaboration? How do I get my limited IT staff refocused on strategic revenue generating initiatives? Does my network security protect my IT environment and sensitive data and meet the regulatory compliances?
- 8. Delivers real businessvalue, right now! 1. Dramatically Reduce Costs so you can invest in business opportunities 3. Deliver and Scale IT Services Flexibly to keep pace with your business requirements How Cloud Helps Your Business 2. Reduce Complexity simplifying operations and maintenance
- 9. Respond to ChangingBusiness Requirements • Meet today’s business requirements – Consolidate and simplify infrastructure and operations, while reducing on-premise spare capacity – Measure and manage service levels consistently across on-premise and cloud infrastructure – Improve quality of service with scalable infrastructure and higher availability • Adapt quickly to new demands – Add capacity economically in the cloud as you grow – Scale quickly to meet seasonal or event-related demand spikes – Respond quickly to competitive initiatives or new customer requirements • Accelerate innovation – Reduce time to market with streamlined application development, testing, provisioning, and deployment on compatible cloud infrastructure – Free IT resources from rewriting applications for the cloud, so they can contribute real business value
- 10. WHAT IS HOLDING SMBSBACK?
- 11. Barriers to CloudAdoption Source: Cisco IBSG N = 510 Reasons for Not Buying Cloud Services Among SMBs <1000 Employees Security concerns are the barrier to uptake
- 12. Barriers to CloudAdoption We don’t have the resources to get people trained We don’t have the resources to implement new technologies and applications We have resources but just haven’t had the time 52% 60% 57%
- 14. BUT…. SMBS AREMOVING FORWARD……
- 15. Growth of CloudServices 60% of the SMB market has adopted or will adopt Cloud services in the next 12 months… Source: EarthLink Survey conducted by AV&Co. 2012
- 16. The College Network •Business Challenges – Small IT team – Spent more time troubleshooting issues than solving business problems – Needed DR plan, had too many outages • Business Benefits – Avoided $200-300K of CAPEX – A business continuity structure to ensure systems are always on – Gained productivity - employees more efficient, processes easier, data availability higher and better customer satisfaction – Refocused IT resources to bring greater value to the business while EarthLink maintains and manages their infrastructure “With online learning, our IT environment is very important, if the systems aren’t available, then our customers don’t have access to their course materials.” Ryan Sallee, CIO
- 17. Ciao Bella • BusinessChallenges – Aging Servers, slow performance on mission-critical applications – Unreliable email provider, frequent outages – No dedicated IT staff – Controller spent too much time troubleshooting IT infrastructure • Business Benefits – Avoided $80K of CAPEX – Improved application performance – Increased security – Reliable email service – Eliminated need for local maintenance contracts – Allows controller to focus on his duties instead of trouble shooting IT – Business continuity • The Solution – All servers and applications on Cloud Hosting platform in EarthLink Data Center – Migrated entire NJ data center to EarthLink “We needed a total refresh. Our newest server was eight years old.” Bob Serchuk, Controller, Ciao Bella
- 18. Business Continuity inAction • Super Storm Sandy – Super storm Sandy hits NJ in October 2012 – Two–week power outage at NJ headquarters • Ciao Bella stays in business – Servers/applications and email stayed fully operational in EarthLink Data Center – Nationwide sales team able to submit orders for production in Oregon – Distribution centers able to ship & invoice orders “If we didn’t move to cloud services, we would have been out of business during the hurricane.” Bob Serchuk, Controller, Ciao Bella
- 19.
- 20. Cloud Use +92% +106% +111% +131% +73% +64% +110% +111% 22% 12% 47% 23% 49% 22% 54% 23% 13% 8% 65% 40% 35% 17% 45% 21% Marketing Email* Webconferencing* File Sharing* Project Management IM* OnlineBackup/DB* Voice Communication* N=3,000 *Include free & paid services Currently 2-3 years Source: Microsoft Operator Channels
- 21. Current/Future Use OfSaaS & Managed Infra. Services SMB Adoption of Cloud Services Source: Cisco IBSG Basic Services Emerging Managed Services EmergingCloud/ Application Services Significant upside / “Pure IaaS” has lowest adoption
- 22. Cloud Support isof Paramount Importance Would you prefer to purchase Cloud Services from your current provider of Internet Access Services, or from a different provider? Source: Cisco IBSG SMB Service Delivery Survey, 2012 Prefer to Purchase Cloud Services from Current Internet Access Provider If the Internet Access Services that your company currently uses were unable to effectively support the use of Cloud Services, how likely would you be to switch to another provider that could offer Internet Access Services that were optimized for Cloud Services (e.g., quality of service, SLAs)? Willingness to Switch Internet Access Provider for Better Cloud Support Sample Size = 761
- 23. SMB Cloud Drivers Source:Cisco IBSG Increase Interest in Buying Cloud Services Among SMBs <1000 Employees
- 24. Assets to Considerfor Cloud Services… Source: Cisco IBSG SMB Service Delivery Survey Potential Differentiation with Network assets Criteria When Choosing a Cloud Provider Among SMBs <1000 Employees
- 25. It’s YOUR Move… Don’tGet Left Behind…
Editor's Notes
- #4 Delivery of the technology as a service; Consumption of IT on a pay as you go
- #7 Cloud Services is a technology that has become a viable solution to these types of challenges. Specifically a Cloud Hosting solution represents a very attractive solution for businesses of all sizes ? Outsourcing the routine maintenance of IT infrastructure and platforms is an ideal way to refocus skilled IT resources and scarce IT budgets to more strategic business building projects.
- #8 Business owners and IT managers are continuously faced with the challenges of having enough budget and IT staff available to meet the business ’s demands for supporting and expanding IT systems and applications. Most businesses would like to reduce the complexity of their IT infrastructure, and be able to scale their IT capabilities to accommodate the changing business requirements. They want to be able to get new IT services rolled out faster to support customers and employees. They want to enable mobile employees to utilize their personal and company owned devices to maximize productivity, without compromising security of the data. They know there ’s no way to stop Mother Nature if she’s sending a hurricane, tornado, ice storm or earthquake at their data center, Servers and systems will crash without warning, and man-made disasters are just as unpredictable, so the only option is to have a backup plan to ensure that your data remains recoverable. Security remains a top concern for IT as malicious software and intruders are on the rise. They need to protect their sensitive data and many must meet mandated regulatory compliance for security processes. They wants to have an email service that maximizes employee productivity while minimizing the cost and headaches associated with managing the hardware, software and security of their email. Add to this the federal compliance requirements and running an email service on an in-house basis can easily become an unwanted burden They want to keep IT Staff focused on strategic revenue generating initiatives, and less time on routine maintenance. Many businesses are now developing or considering strategies to virtualize and use the Cloud to help meet these objectives, but they want to do so while maintaining complete control, improving security and reducing costs.
- #9 So the cloud is a big part of IT ’s future. But cloud computing isn’t just a long-term future trend. Even if you don’t depend on mobile users, hardware, and apps, cloud capabilities are available right now to deliver real value – and they deserve a close look. Cloud computing can help you: Dramatically reduce costs , maximizing resource utilization by pooling, automating operations processes, and using public cloud services where appropriate. (maximize roi, consolidate resources, automate, host/outsource) Reduce complexity by moving infrastructure components and management processes from a multi-silo infrastructure to resource pools that can be managed as units instead of one machine at a time. Deliver and scale IT services – regardless of where they are sourced or delivered – flexibly using policy-driven automation and self-service.
- #10 Cloud solutions for business focus on flexibility & agility – keeping on-premise resources lean and efficient, but with plenty of spare capacity available in the cloud when the business environment changes. Using virtualization to consolidate on-premise resources improves efficiency and cost-effectiveness, maintaining quality of service and keeping IT focused on value-add innovations And when customer demand, competitor initiatives, or growth requires a change in capacity, cloud infrastructure allows instant adaptation. And it works in both directions – when the capacity is no longer required, scaling down doesn ’t require a lot of time and effort to decommission infrastructure, and there’s no investment wasted on idle capacity Most important, cloud infrastructure allows your business to innovate quickly, at much lower levels of risk
- #12 Q: What are the main reasons that you would not buy and use a hosted or subscription technology service (choose up to 3)? This is consistent across all surveys of all business sizes, notice we ’ve shown split lower end and upper end of SMB. However, businesses do adopt, despite the concerns – take SFDC. Notice for the lower end of the market – it implies simplicity is very important.
- #17 Who is The College Network? An early pioneer in the online education industry Growing technology infrastructure serving 200 employees in Indianapolis and Las Vega Supported 150 independent contractors nationwide IT team managed 50 physical servers at its HQ and another 65 offsite The Solution MPLS, Cloud & Data Center FW
- #18 Who is Ciao Bella? Gelato, sorbet and frozen yogurt maker Headquartered in Florham Park NJ Oregon manufacturing plant Nationwide sales team & distributors The Solution All servers and applications on Cloud Hosting platform in EarthLink Data Center Migrated entire NJ data center to EarthLink Platinum Level of Managed Services Migrated email to EarthLink Secure Email
- #20 The biggest change
- #22 Q: When, if ever, do you anticipate your company will use the following hosted or subscription-based technology (also known as ‘cloud’) services for your software applications? Basic services 16-18% Managed services 22-27% SaaS Horizontal Apps: 20-27% SaaS Vertical Apps: 36-38% IaaS/PaaS 29-45%
- #24 What would increase your interest in buying a cloud service? Guarantees (security, uptime/reliability) and a clear business case are key to encourage uptake. This is an educational opportunity for the SP (slightly higher for upper end on security) Also an advantage for the cloud provider who is also the bandwidth provider
- #25 Q - What do you consider to be the most important criteria when choosing a provider of Cloud Services?