1. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in
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on the independence and integrity of Gartner research, see "Guiding Principles on Independence and Objectivity."
Arun Chandrasekaran
The (R)EVOLUTIONARY IMPACT
OF CLOUD

2. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Your IT Forecast: Very Cloudy,
With Scattered Thundershowers
1
SaaS
$129.4M in
2014
IaaS
$82.6M in
2014
PaaS
$33.4M in
2014

3. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Key Issues
1. What are the key trends in the cloud
computing?
2. What impact is cloud computing having on
today’s business climate?
3. How can channel partners and vendors
capitalize on emerging opportunities?
2

4. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Key Issues
1. What are the key trends in the cloud
computing?
2. What impact is cloud computing having on
today’s business climate?
3. How can channel partners and vendors
capitalize on emerging opportunities?
3

5. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
The Cloud is Cloudy: Three Major
Discussions
Access Open Limited Closed
Owner Provider Provider Enterprise/Provider
Model 1:All – 1:Many 1:Few 1:Few – 1:1
Private
Cloud
Utility
Services
Public
Cloud
Enterprise
Hype Curve

6. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
AHA SLIDE – Cloud is Cloudy
• 4% - weil der Provider das so sagt23%
21%
20%
9%
5%
Access
via Internet
Ability to grow
and shrink usage
Multiple clients
use simultaneously
No upfront
investment
Supplier uses
that terminology
Why classify a service as a cloud service?

7. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
The Two Sides of the cloud
• 4% - weil der Provider das so sagt47%
35%
27%
26%
27%
Security of
service
Data location,
privacy, access
Cost uncertainty
and variability
Inadequate
service level
Increased
business risk
What's holding you back?

8. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Mainstream Use Cases,
Public Cloud Services Through 2014*
D• SaaS (Analytics, E-Mail, Collab.)
E• Select Cloud Optimized Apps
F• Parallelized or HPC Workloads
B• Prototyping/Proof of Concept
Base Use Case
Unpredictable and/or
volatile workloads
Project based workloads
Rapid provisioning
User self-service
Peripheral Processing
Disaster Recovery
Leverage economies of
scale and grid execution
Other Key Considerations
Manageable data risk
Simple connection to
internal applications
Service licensing in place
C• Web Site & Application Serving
A• Development/Test and Projects
* Excludes Information & Business Services

9. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
What CEOs and CIOs are saying…
8
23%
10%
8%
4%
10%
8%
6%
6%
5%
5%
10%
11%
12%
8%
5%
9%
6%
6%
5%
2%
9%
7%
7%
13%
7%
6%
8%
6%
7%
3%
Growth
Profitability
Cost
Workforce
Customers
Sales and marketing
Operations
Geographic growth
Products
Financial
Top priority Second Third
CEO priorities lead
to CIO priorities
Source: 2013 Gartner CEO & CIO Surveys
Top 10 CIO Business Priorities
1 Increasing enterprise growth
2 Delivering operational results
3 Reducing enterprise costs
4 Attracting and retaining new customers
5 Improving IT applications and infrastructure
6 Creating new products or services
7 Improving efficiency
8 Attracting and retaining the workforce
9 Implementing analytics and big data
10 Improving business processes
Business priorities drive the need for transformation.
Top 10 CEO Strategic Business Priorities

10. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Key Issues
1. What are the key trends in the cloud
computing?
2. What impact is cloud computing having on
today’s business climate?
3. How can channel partners and vendors
capitalize on emerging opportunities?
9

11. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
By 2016, the primary use of the term
"cloud" will be to describe initiatives that
are business led rather than IT led.
Strategic Planning Assumption
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.

12. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
The Cloud Services Market Phenomenon
11
• Cloud services propose to replace
EVERY existing operating model
• IT roles will change:
• Evolve (transform)
• Expand (combine old + new)
• Eliminate, or at least diminish
• Externalization and standardization are
key design points
• Expectations are enormous – and often
irrational
• Cloud services are laying the foundation
for the next generation of IT innovation
Cloud Computing: a style of computing where
scalable and elastic IT-related capabilities are
provided 'as a service' to customers using Internet
technologies.
Cloud Services

13. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Cloud Services Disrupt and Benefit
12
Disruptor Benefactor
People
Process
Technology
Skills
Roles & responsibilities
IT decision makers
IT procurement
Externalization
Business processes
Procurement models
Hybrid scenarios
IT service delivery
IT operations management
Legacy application and
infrastructure obsolescence
Empowerment through self-
service
Business focus
Strategic roles (IT and non-IT)
Agility
Externalization
OPEX business model
Sharing (interal/external)
Increased efficiency
Next-generation platform
Cost savings (?)
Availability and scalability

14. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Business Leaders Have an Increasing
Role in IT Spending Decisions
40% of SaaS
purchases are
made by
business
leaders rather
than IT
BusinessIT
Cloud purchase
decisions are
increasingly
shifting to
business leaders.
"Business benefits" is
the top reason for cloud
services adoption.
Business unit
leadership's influence
over technology
decisions will double in
the next two years.
13

15. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Key Issues
1. What are the key trends in the cloud
computing?
2. What impact is cloud computing having on
today’s business climate?
3. How can channel partners and vendors
capitalize on emerging opportunities?
14

16. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Industry Adoption Shows Clear Trends
Advanced Heavy Moderate Measured Lagging
Industry Adopting
Financial services Private cloud IaaS/PaaS, Select SaaS
Telecommunications Community cloud and service providers
Government Community cloud and SaaS
Education Email and collaboration
High Tech Panicky migration from vendor to provider
Energy and utilities Some SaaS esp. financial and HR support
Healthcare Public records, medical processes
Retail Brokerage and messaging integration

17. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
The New Vendor Reality: A Risky Transition
• Manage the shift from product to service
• Risky proposition – giving away your customers
• Discovering new pricing models
• Cannibalizing on-premises products
• New powerhouse vendors
• Will the business models work?

18. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Benefits
• Reach new customers,
markets
• Predictable revenues
• Better intelligence and
customer traction
• Lower cost of support
• Be a disruptor
Risks
• Transformative changes
needed – Platform, people,
processes
• Demonstrate value upfront
• Slower pipeline build-out
• Less ability to sell high-
value customization
• Less value to Channel
Transitioning to Cloud: Benefits & Risks

19. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
To Cloud or Not to Cloud
18
Cloud
GrowDefend
• Set up a dedicated organization or subsume within?
• Port my existing code or acquire a cloud native platform?
• How do I change my sales team effectiveness to sell cloud?
• How do I segment my customers?
• How can I transform from an ISV(or IHV) to be a service provider?
• Is your competitor
succeeding with a
SaaS App?
• Can you grow your
customer base and/or
retool your platform?

20. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
• SaaS was growing at 40% ; On-prem
growing at 10%
• Code too old and stodgy to be ported to
Cloud
• Acquired a cloud start-up
• All sales reps were trained to sell both; no
penalty or quota for one vs. another
• No attempt to integrate. Provide customers
the choice
• Both products are still growing; Clean
deployments
Large ISV Case Study – On-Prem to SaaS
Challenge: 15 year old product ; New competitors with a SaaS Model
eating away Market share

21. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Infrastructure
as a Service
Platform as a
Service
Software as a
Service
Information
as a Service
Bus Process
as a Service
Service
Delivery
Service
Delivery
Service
Delivery
Service
Delivery
Service
Delivery
Process Process Process Process Process
Data Data Data Data Data
Apps Apps Apps Apps Apps
Platform Platform Platform Platform Platform
Infra Infra Infra Infra Infra
Technology – Responsibilities
Provider Responsibility Subscriber Responsibility
20

22. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
IT purchases, moving out from under
IT department control into new buying
centers
Software Development integration and
custom development critical for cloud
services
Convergence of technology
forces convergence of partner typesCloud lack of appropriate
leverage (programs & skill) put
cloud adoption at risk
Channel Play for cloud enable - Cloud
Service Brokerage (CSB), reseller,
builder
Services new outcome driven
solutions require ‘invested’ partners
Channel Trends 2014
IT Skills lines blur between traditional
IT skills and business skills
New Challengers “born in the cloud”
partners are new competition

23. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Channel Programs Must Evolve
Today Tomorrow
• Efficiency (simplification)
• Mass partner recruitment
• Tiered, based on volume +
value
• Certification
• Product-based programs
• Partner program
• Aligned vendor + partner
• Geographically limited
• ISV disconnect
• Effectiveness (improved sales)
• Targeted capacity planning
• Tiered based on value
• Competency and Specialization
• Partner business model based
• Partner "ecosystem“ –
“marketplace”
• Aligned customer + partner +
vendor
• Global in scope and coverage
• Integrated ISV + Resellers

24. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Cloud Models Fundamentally Transform
the Way IT Services Are Delivered
IT Delivered as-a-service
Hybrid IT
Traditional IT
Cloud Service Brokerage
Private
Cloud(s)
Public
Cloud(s)
Hybrid
Cloud
23
Cloud services create an agile, scalable, cost-effective platform
for next-generation business solutions based on the Nexus of
Forces: mobile, social and big data.

25. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Cloud Services Brokerage Opportunities
Aggregation
Brokerage
Customization
Brokerage25%
50%
75%
100%
Integration
Brokerage
ISV *
System
Integrator *
Definition:
CSB is composed of three
primary roles in which an
intermediary adds value to
one or more cloud services
on behalf of consumers of
those services. Providers of CSB compete
on the relative strengths of
the three CSB roles
Distributor *
Partners
Either
• Are a brokerage
• Enable brokerage
• Leverage brokerage

26. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Recommendations
 Clearly understand customer’s value propositions for
adopting cloud computing.
 All vendors are engaged in some way with cloud computing
— know your strengths and prove your enterprise readiness.
 Maximize the scale for options that you pursue.
 Seek to address the rights of consumers of cloud services.
 Service interfaces are as important as enabling technologies.
 Partner with cloud brokerages to enhance performance and
cloud service capabilities.
 Manage the transition and constantly adapt to new realities.

27. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Recommended Gartner Research
 CEO and Senior Executive Survey 2013: As Uncertainty
Recedes, the Digital Future Emerges
Mark Raskino, Jorge Lopez (G00247308)
 Cloud Computing and Its Impact on IT Economics, Finances
and Planning Assumptions
Kurt Potter (G00253434)
 Three Factors Will Significantly Impact Enterprise Cloud Use
in the Near to Midterm Future
Gregor Petri (G00253329)
Service Providers
 Cloud Solution Providers Ignore Customer Processes at Their
own Peril
Gregor Petri (G00247642)
 Competitive Landscape: Data Center Transformation Services
Warren Bell (G00231275)
For more information, stop by Gartner Research Zone.
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