The survey found that while cloud adoption has moved beyond simple applications, security concerns remain a top barrier to further adoption. Business agility and reducing time to market were the primary drivers of cloud adoption according to buyers, while service providers saw cost reduction as the main driver. Overall, buyers expressed strong satisfaction with their cloud initiatives and optimism around future benefits, though many are still evaluating options like open source platforms versus VMware.

1. What’s Driving Enterprise Cloud Adoption?
The Buyers Speak Out
January 10, 2013
Live Tweeting #ccevent

2. Introductions
Scott Bils
Partner & Next Generation IT Practice
Leader
scott.bils@everestgrp.com
Steve Wylie
General Manager
steve.wylie@ubm.com
Proprietary & Confidential. © 2013, Everest Global, Inc. 2

3. Context setting
Focus of this webinar
 Current and future adoption patterns across cloud layers - IaaS, PaaS, SaaS, BPaaS
 Current and future adoption across cloud hosting models - Public, Private and Hybrid
 Adoption trends by application workload
 Stakeholder involvement in cloud investments
Sources for today’s webinar  First of its kind
enterprise cloud
adoption tracking
survey
2012 Enterprise Cloud
Adoption Survey
+  Fact-based research
focused on
enterprise cloud
market and all layers
of the cloud stack
Proprietary & Confidential. © 2013, Everest Global, Inc. 3

4. Why do another enterprise cloud survey?
 “Peel back the onion”
on adoption patterns
Survey respondents
100% = 346
 Assess post-adoption
Cloud Service
reality vs. buyer Providers Consultants/
expectations 31%
37% Advisors
32%
 Identify cloud market
Enterprise / Cloud
“disconnects” Service Buyers
Proprietary & Confidential. © 2013, Everest Global, Inc. 4

5. Key findings from the survey
1 4
Cloud adoption is quickly moving While VMware leads today, many are
beyond the “low hanging fruit” leaning towards open source
2 5
Business agility and top-line growth Service providers need to adapt to
are top cloud adoption drivers new buying centers and drivers
3 6
Perceived security issues continue Overall, buyers have been satisfied,
to be the biggest adoption barrier with high expectations for the future
Proprietary & Confidential. © 2013, Everest Global, Inc. 5

6. How widely does your company use public
cloud IaaS services like Amazon today?
Extensively 4%
Experimenting 48%
Not all all 28%
Don't know 20%
Proprietary & Confidential. © 2013, Everest Global, Inc. 6
Source: Live polling conducted during the “What’s Driving Enterprise Cloud Adoption?” webinar on January 10, 2013

7. SaaS has been adopted most widely; IaaS adoption
is expected to grow fastest in the near future
Enterprise Cloud Adoption by Cloud Layer Enterprise IAAS Adoption Plans
Already adopted Adopt in distant future
Adopt in near future No plans to adopt
57%
Software as a Service 28%
(SaaS) 10%
5% No plans for cloud
infrastructure
38%
Platform as a Service 25% 18%
(PaaS) 27%
10%
31% Plan to
Public cloud 26% 48% implement cloud
(IaaS) 26% infrastructure
18%
34%
30% Already have cloud
Private cloud 36%
(IaaS) 23% infrastructure
11%
28%
Business Process as a 27%
Service (BPaaS) 22%
23%
17%
Hybrid cloud 27%
(IaaS) 36%
20%
Proprietary & Confidential. © 2013, Everest Global, Inc. 7

8. Amongst those planning IaaS implementation,
VMware enjoys dominant mindshare
Preference for virtualization technology Preference for cloud platform
Buyer responses (cloud infrastructure implemented/planned) Buyer responses (cloud infrastructure implemented/planned)
100% = 95 (number of mentions) 100% = 104 (number of mentions)
KVM VCE Eucalyptus
Xen 6% 4%3%
CloudStack
9% 9%
VMware
34%
IBM SmartCloud 12%
Microsoft 47% VMware
18%
Hyper-V
14%
OpenStack
19% 25%
No preference
No preference
However, a significant proportion of the market professes to be
platform agnostic, or prefer open source platforms
Proprietary & Confidential. © 2013, Everest Global, Inc. 8

9. Email/collaboration, DR/storage, and BI/analytics being
targeted for cloud migration as buyers think beyond custom
applications and development platforms
Enterprise Cloud Adoption by Use Case Already migrated
Currently migrating
29% Future migration planned
Application development/test environment 25% No migration planned
28%
19%
28%
Custom business applications 17%
31%
24%
25%
Collaboration / email 16%
46%
13%
25%
Disaster recovery/storage/data archiving 20%
42%
14%
22%
E-commerce and on-line tools 25%
32%
22%
19%
Business intelligence/analytics 16%
39%
26%
18%
ERP 19%
25%
37%
Proprietary & Confidential. © 2013, Everest Global, Inc. 9

10. Vast majority of buyers met their “cloud objectives”; more
than cost reduction, cloud enables flexible infrastructure and
reduce time to market…
Enterprise Cloud adoption – objective fulfillment XX% Overall agreement %
Buyer responses
N = 88
Strongly disagree
2% 1% 1% 2%
Disagree 2% 2% 2% 1% 2%
1% 2% 1%
Somewhat disagree 14%
Neither agree or 24%
31% 82% 27%
disagree
21% 71%
67%
64%
27%
21% 24%
Somewhat agree
38%
Agree 25% 25% 27%
18% 23% 19%
Strongly agree 16%
We met our We met our We met our We met our
objectives for objectives for objectives for objectives for
cost savings flexible quicker time to higher
infrastructure market satisfaction of
business units
Proprietary & Confidential. © 2013, Everest Global, Inc. 10

11. …both of which are top adoption drivers for enterprise buyers;
however, supply side constituents view cloud adoption to be
driven primarily by cost reduction imperatives
Relative importance of adoption drivers Relative importance of adoption drivers
Buyer responses Service provider/advisory responses
1 = not at all important; ………. 5 = very important 1 = not at all important; ………. 5 = very important
Reduced time for provisioning Reduction in TCO (Total
3.21 3.33
application/infrastructure Cost of Ownership)
N = 82 N = 193
Flexible infrastructure Flexible infrastructure
3.21 3.27
capacity capacity
N = 81 N = 193
Reduced time for
Limited in-house
3.13 provisioning 3.25
technical resources
N = 82 application/infrastructure N = 191
Desire to "variabilize" cost 2.63 Desire to "variabilize" cost 3.03
N = 79 N = 186
Reduction in TCO (Total Limited in-house
2.56 2.71
Cost of Ownership) technical resources
N = 84 N = 193
Industry-specific reasons 2.49 Industry specific reasons 2.37
N = 81 N = 184
Proprietary & Confidential. © 2013, Everest Global, Inc. 11

12. Adoption is by and large driven non-vertical solutions;
however, industry-specific adoption patterns point towards
significant impact on customer facing processes
Industry specificity of cloud adoption Industry specific reasons for cloud adoption
Buyer responses Buyer responses
Buyerspeak: Industry specific cloud solutions enable
100% = 89 us to…
Industry-specific solutions “…make changes quickly to web hosted customer
15% portal”
Combination
(industry-specific
and general 17% “… to serve the needs of our clients – through
solutions) (dynamic) communication, and data analytics”
69%
General
solution “…support with products and services, our customers
who wish to operate within the public cloud.”
Proprietary & Confidential. © 2013, Everest Global, Inc. 12

13. Security and integration issues are barriers to adoption;
contrary to buyer perception, service providers cite lack of
buy-in as a more significant barrier than budget issues
Barriers to enterprise cloud adoption Barriers to enterprise cloud adoption
Buyer responses Service provider/advisory responses
1 = not at all important; ………. 5 = very important 1 = not at all important; ………. 5 = very important
Security concerns 2.93 Security concerns 3.31
N = 83 N = 196
Integration of cloud solutions 2.73 Integration of cloud solutions 2.92
N = 81 N = 190
Lack of budget for new
2.58 Lack of management buy-in 2.77
initiatives
N = 81 N = 193
Lack of suitable cloud Lack of budget for new
2.49 2.70
solutions initiatives
N = 83 N = 195
Lack of in-house capability Lack of in-house capability
2.42 2.69
to evaluate cloud solutions to evaluate cloud solutions
N = 83
N = 191
Lack of suitable cloud
Fear of vendor lock-in 2.39 2.60
N = 80 solutions
N = 193
Lack of management buy-in 2.26 Fear of vendor lock-in 2.48
N = 81
Service providers need support from stakeholder groups in order to generate buy-in across the enterprise
Proprietary & Confidential. © 2013, Everest Global, Inc. 13

14. Buyers are willing to change service providers for the right
contract terms, while service providers believe the reputation
and tenure of the provider is more important
Cloud solution purchase – decision criterion Cloud solution purchase – decision criterion
Buyer responses Service provider/advisory responses
1 = not at all important; ………. 5 = very important 1 = not at all important; ………. 5 = very important
Security of the offering 3.50 Security of the offering 3.65
N = 84 N = 194
Reputation and tenure
Contract terms and SLAs 3.34 3.45
N = 82 of the provider N = 193
Reputation and tenure
3.29 Contract terms and SLAs 3.24
of the provider
N = 82 N = 192
Case studies / client Case studies / client
3.05 3.11
referrals / track record N = 84 referrals / track record N = 193
Physical location of facilities 2.72 2.90
Low price
delivering cloud services N = 83 N = 194
Physical location of facilities
Low price 2.66 2.55
N = 83 delivering cloud services N = 193
Security features continue to be the top decision criteria
Proprietary & Confidential. © 2013, Everest Global, Inc. 14

15. IT, in conjunction with business leadership, comprises the
primary decision-making group for cloud adoption
Stakeholder involvement in cloud solution purchase
Buyer responses
N = 192 (number of mentions)
67
51
39
28
7
IT function C-level executives Business units Finance function No formal effort to
develop enterprise
cloud strategy
Compared to other IT purchase decisions, cloud investments attract higher involvement from CXOs
Proprietary & Confidential. © 2013, Everest Global, Inc. 15

16. Enterprise adopters express strong satisfaction and remain
extremely optimistic about their ability to generate business
value from cloud solutions
Chart title
XX% Overall agreement %
Number of respondents
N = 86
Strongly disagree 4% 4% 4% 1%
Disagree 5% 6% 12%
13% 88%
Somewhat disagree 14% 11%
7% 12%
Neither agree or 16%
16%
disagree 22% 64%
62%
55% 42%
26%
Somewhat agree 35% 23%
19% 29%
Agree 13%
34%
Strongly agree 14% 13% 9%
We have a robust In comparison to We are satisfied We expect to
strategy for other organizations, with the current achieve greater
managing our we are more results from our benefits from
adoption of cloud mature in our cloud initiatives cloud solutions in
solutions approach to cloud the future
solutions
Proprietary & Confidential. © 2013, Everest Global, Inc. 16

17. How confident are you that your organization is on
the right path to the cloud?
Very 47%
Somewhat 47%
Not very 6%
Not at all 0%
Proprietary & Confidential. © 2013, Everest Global, Inc. 17
Source: Live polling conducted during the “What’s Driving Enterprise Cloud Adoption?” webinar on January 10, 2013

18. In Summary…
1 4
Cloud adoption is quickly moving While VMware leads today, many are
beyond the “low hanging fruit” leaning towards open source
2 5
Business agility and top-line growth Service providers need to adapt to
are top cloud adoption drivers new buying centers and drivers
3 6
Perceived security issues continue Overall, buyers have been satisfied,
to be the biggest adoption barrier with high expectations for the future
Proprietary & Confidential. © 2013, Everest Global, Inc. 18

19. 2nd Annual Enterprise Cloud Adoption Survey
Coming soon
Why is this survey important? Registration now open!
The responses from the Enterprise Cloud Adoption Silicon Valley, April 2-5
Survey 2013 will define the current state of how and
why organizations are utilizing cloud solutions within
their industries, the most significant adoption drivers
and challenges, future plans, and more. This year’s
results will also include year-over-year comparisons
with 2012, with noted areas of change.
Why should you participate?
In appreciation for your participation, you'll receive a
copy of the survey findings and be entered for a
chance to win a complimentary conference pass to
Cloud Connect's next conference and expo in Silicon
Valley, April 2-, 2013. Just be sure to complete your
contact information at the end of the survey.
All webinar registrants will receive an email when the survey opens in the
coming weeks. Stay tuned!
Proprietary & Confidential. © 2013, Everest Global, Inc. 19

20. Q&A
To ask a question during the Q&A session
 Click the question mark (Q&A) button located on right side of your screen. This opens Q&A
 Be sure to keep the default set to “send to All Panelists”
 Type your question in the box at the bottom of the Q&A box and click the send button
 Attendees will receive an email with instructions for downloading today’s presentation
 To contact the presenters:
– Scott Bils, scott.bils@everestgrp.com, @sbils
– Steve Wylie, steve.wylie@ubm.com, @swylie650
Stay connected
Websites Twitter Blogs
www.everestgrp.com @EverestGroup www.sherpasinblueshirts.com
research.everestgrp.com @Everest_Cloud www.gainingaltitudeinthecloud.com
Proprietary & Confidential. © 2013, Everest Global, Inc. 20

21. About Everest Group
Everest Group is an advisor to business leaders on the next generation of global
services with a worldwide reputation for helping Global 1000 firms dramatically
improve their performance by optimizing their back- and middle-office business
services. With a fact-based approach driving outcomes, Everest Group counsels
organizations with complex challenges related to the use and delivery of global
services in their pursuits to balance short-term needs with long-term goals. Through
its practical consulting, original research, and industry resource services, Everest
Group helps clients maximize value from delivery strategies, talent and sourcing
models, technologies, and management approaches. Established in 1991, Everest
Group serves users of global services, providers of services, country organizations,
and private equity firms in six continents across all industry categories. For more
information, please visit www.everestgrp.com and research.everestgrp.com.
Proprietary & Confidential. © 2013, Everest Global, Inc. 21

22. Everest Group
Leading clients from insight to action
Everest Group locations
Dallas (Headquarters): info@everestgrp.com
+1-214-451-3000
New York: info@everestgrp.com
+1-646-805-4000
Toronto: canada@everestgrp.com
+1-416-865-2033
London: unitedkingdom@everestgrp.com
+44-207-129-1318
Delhi: india@everestgrp.com
+91-124-496-1000
www.everestgrp.com | research.everestgrp.com | www.sherpasinblueshirts.com
Proprietary & Confidential. © 2013, Everest Global, Inc. 22