The  Voice  of  the  Customer    Sean  Hacke5,  Research  Director  Cloud  Compu<ng        

The  451  Group  

451  Research  is  focused  on  the  business  of  enterprise  IT  innova<on.    The  company’s  analysts  provide  cri<cal  and  <mely  insight  into  the  compe<<ve  dynamics  of  innova<on  in  emerging  technology  segments.  

Tier1  Research  is  a  single-­‐source  research  and  advisory  firm  covering    the  mul<-­‐tenant  datacenter,  hos<ng,  IT  and  cloud-­‐compu<ng  sectors,  blending  the  best  of  industry  and  financial  research.    

The  Up<me  Ins<tute  is  ‘The  Global  Data  Center  Authority’  and  a  pioneer    in  the  crea<on  and  facilita<on  of  end-­‐user  knowledge  communi<es  to  improve  reliability  and  uninterrup<ble  availability  in  datacenter  facili<es.  

TheInfoPro  is  a  leading  IT  advisory  and  research  firm  that  provides    real-­‐world  perspec<ves  on  the  customer  and  market  dynamics  of  the  enterprise  informa<on  technology  landscape,  harnessing  the  collec<ve  knowledge  and  insight  of  leading  IT  organiza<ons  worldwide.  

ChangeWave  Research  is  a  research  firm  that  iden<fies  and  quan<fies  ‘change’  in  consumer  spending  behavior,  corporate  purchasing,  and    industry,  company  and  technology  trends.    

TheInfoPro  Business  Overview  

Fundamental,  ”voice  of  the  customer”  research    on  key  Informa<on  Technology  (IT)  sectors.  

Founded  in  2002  as  an  unbiased  alterna<ve    to  Gartner.    

Transparency:  no  analyst  spin  or  bias.    Direct,  factual  results  provided  to  our  clients.  

Source:  One  on  one  interviews  with  thousands    of  pre-­‐screened    IT  Professionals  within  our  proprietary  network,  repeated  every  six  months.  

Focus  is  IT  Infrastructure  spanning:    Storage,  Servers,  Networking,  Informa<on  Security,  Cloud  Compu<ng  

Methodology  &  Research  Process  

Structured  Interview  Process:  §  60-­‐  to  90-­‐minute  interviews  repeated  in  six  month  “waves”  §  TIP  Researchers,  who  average  20  years  of  IT  experience,  interview.  §  IT  Decision  makers  –  pre-­‐screened  for  domain  experience    at  Global  2000  companies  

TIP  quan<ta<ve  and  qualita<ve  data  includes:  §  Customer  Spending:  future  spending  plans  by  vendor  and  size  of  spend  §  Vendor  Shortlists:  who’s  in  use  and  who’s  in  plan  §  Vendor  Performance:  customer  ra<ngs,  who’s  vulnerable    to  customer  loss,  and  the  vendor(s)  they’re  vulnerable  to  

§  Technology  Roadmaps:  What’s  hot  and  what’s  not    >  TIP’s  patented  Technology  Heat  Index™    

§  Time  Series:  Unmatched  historical  data  is  captured  for    comparison  purposes  

Data  is  highly  customizable  by  dimensions  such  as:  §  Industry  §  Revenue  §  Installed  Technology  Provider  §  Environment  (i.e.,  capacity,  budget,  employees)  

Agenda  

Sec<on  1:  Introduc<on  –  What  is  the  Cloud?  

Sec<on  2:  Demand  Forecasts  and  Supply  Side  Spending    

Sec<on  3:  Customer  Percep<on,  Drivers  and  Inhibitors  

Sec<on  4:  Enterprise  journeys  in  the  cloud  

Many  Remain  a  Bit  Cloud  Confused    

TIP  Narra(ves:      There  are  so  many  defini(ons  of  cloud  it  is  hard  to  really  say.  Large  Enterprise  –  Financial  Services  

There  are  many  defini(ons,  and  I  have  yet  to  see  one  that  is  all-­‐encompassing,  so  I'm  s(ll  forming  my  own  defini(on.  Large  Enterprise  –  Financial  Services  

A  nebulous  term  –  I  would  say  it's  a  grid  of  storage/applica(ons/services  hosted  off-­‐site.  Europe  -­‐  Healthcare/Pharmaceu(cals  

It  depends  on  what  cloud  vendor  you  are  talking  to.  Europe  –  Healthcare/Pharmaceu(cals  • –                      

The451  Group’s  Cloud  Defini<on    The  451  Group  broadly  defines  cloud  compu(ng  as  a  set  of  business  models  and  technologies  that  enable  IT  func(ons  

to  be  delivered  and  consumed  via  a  third  party  as  a  real-­‐(me  service.  A  complimentary  copy  of  the  Cloud  Codex  report  is  available  on  The  451  Group’s  website.  

IaaS  Cloud  Infrastructure  Private  Clouds  Serve  as  the  Founda(on  for  Public  Cloud  Adop(on    

Private  Cloud  Virtualiza<on  Entering  a  New  Phase    

Source:  LeQ  and  BoSom  Charts  The  451  Group  Market  Monitor  

Sizing  the  Cloud  

Source:  LeQ  and  Right  Charts  The  451  Group  Market  Monitor  Includes:  PaaS,  IaaS  both  Forecasts  Do  NOT  include  SaaS  

Billions  Falling  From  the  Public  Clouds    

Cost  efficiencies  and  higher  asset  u<liza<on  rates  in  cloud  drive  increasingly  compelling  economics    Hybrid  clouds  enable  organiza<ons  to  leverage  “best  execu<on  venues”  where  steady  loads  and  elas<c  loads  in  environments  where  they  are  most  economically  feasible    

11%  

Corporate  Sokware  Spending  Outlook    

08/09  Recession  

Source:    

Q:  Over  the  next  6  months,  does  your  company  plan  to  increase  its  overall  spending  on  cloud  compu:ng,  decrease  its  spending,  or  will  your  company's  overall  cloud  compu:ng  spending  remain  the  same  compared  to  the  previous  6  months?  

Total Sample

Companies That Currently Use

Cloud

Increase Overall Spending 11% 34% Decrease Overall Spending 1% 4% Remain the Same 16% 60% No Plans to Use Cloud Computing in Next 6 Months

71% 2%

Corporate  Public  Cloud  Spending  

Source:    

Q:  For  each  of  the  following  uses  of  cloud  compu:ng,  do  you  expect  your  company  to  increase  its  spending  on  cloud-­‐related  services,  decrease  its  spending,  or  will  spending  on  cloud-­‐related  services  remain  the  same  over  the  next  6  months?  

Corporate  Public  Cloud  Spending  by  Cloud  Stack  –  Next  6  Months    

Source:    

Q:  What  effect  -­‐  if  any  -­‐  does  your  company's  spending  on  cloud  compu:ng  have  on  your  budget  for  other  soDware  and  IT  services?    

Public  Cloud  Spending:  Effect  on  Other  IT  Spending  Areas  

Source:    

Customer  Percep<on  

Top  Inhibitors  of  PUBLIC  Cloud  Projects  

Mean  =  6.4  (SD  =  2.1)  

Corporate  Percep<ons  on  Reliability  –  Cloud  Not  Reliable?      

83%    Gave  a  Ra<ng  of  5  or  Over    

Source:    

Effect  of  Amazon  Web  Services  Outage    

Source:    

Mean  =  5.6  (SD  =  2.2)  

Corporate  Percep<ons  on  Security  –  Cloud  Not  Secure?  

66%    Gave  a  ra<ng  over  5  

Source:    

The  Cloud  Journey    

Complexity  

Cloud  Enters  Phase  X  

Ver<cally    integrated    and  cloud  ecosystems  –  PaaS  and  more  

Horizontally    federated    

‘compute  markets’  –  brokering  

Prolifera<on    of  monolithic    clouds,  APIs  –  CloudTone?  

All  Clouds  Will  be  Hybrid:  Everyone  wants  to  be  the  control  point!

Value  will  be  in  driving  best  execu(on  venues:      Risk/Reward  Cost/Benefit      

Dedicated    Hos<ng    

         

IT  Outsourcing      IaaS    

PaaS    

BPO    SaaS    

It’s  Not  a  Zero  Sum  Game  

“Tradi<onal”  IT  Outsourcing   BPO   Offshore   “Virtual”  

IBM   Bisys,  Experian   WNS,  Tata   IBM  

HP   IBM   HP,  Wipro   HP  

Accenture,  CSC   Convergys   –   Salesforce.com  

Dell  (Getronics,  AtosOrigin)   IBM   Cap<ve   HP  

IBM   Accenture   HCL,  Tata   IBM  

Ci<street   Travelocity  

Vanco  

Where  Are  We  in  the  Hybrid  Journey?  

Public  Cloud  Usage  Gains  Steam  S<ll  a  Small  Base    

Applica<ons  Most  Suited  for  Cloud  (SaaS  Respondents)  S(ll  Not  Moving  the  Crown  Jewels      

IaaS  Hardware  Awareness  –  Public  Cloud    

Source:  TheInfoPro  Final  Cloud  W2:  LeQ  Chart,  n=11;  Middle  Chart,  n=5  (100%  of  those  respondents  that  said  yes);  Right  Chart,  n=9.    

Importance  of  IaaS  Func<onality  for  Buying  Decisions  –  Public  Cloud  

This  presenta<on  contains  confiden<al  informa<on  which  is  the  property  of  TheInfoPro,  a  division  of  The  451  Group,  and  is  given  to  the  recipient    pursuant  to  a  confiden<al  rela<onship  between  the  recipient  and  TheInfoPro,  LLC.  Such  informa<on  shall  not  be  copied,  disclosed    

to  others,  or  used  for  any  purpose  other  than  that  for  which  is  given,  without  the  wri5en  permission  of  TheInfoPro,  LLC.  TheInfoPro™  and  logo  are  registered  trademarks  and  property  of  TheInfoPro,  LLC,  a  division  of  The  451  Group.  

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Domino  Sugar:  The  Good      

Domino  Foods,  Inc.  is  the  largest  marketer  of  refined  sugar  in  the  United  States  and  sells  two  of  the  na<on's  most  well-­‐known  brands,  Domino  Sugar  and  C&H  Sugar.                  Domino  Sugar’s  SAP  applica<on  will  be  hosted  on  Virtustream’s  Shared  Infrastructure  as  a  Service.        

Details    

Number  of  Users     2400  

Applica<ons     ERP,  CRM,  Invoice  and  Ordering  Systems,  business  intelligence,  HCM  and  Payroll  

Expected  Cost  Savings   30%  

Eli  Lilly:  The  Bad  &  The  Ugly  

§ Eli  Lilly  began  using  Amazon  AWS  in  2009    § Needed  significant  amount  of  compu<ng  power  to  “crunch  data”    § Procurement  and  installa<on  process  could  take  up  to  3  months  § According  to  Eli  Lilly  the  cost  of  delaying  a  product  could  total  $150  per  second    Answer:  Swipe  Credit  Card  and  have  25  Servers  up  and  running  in  an  hour…  Within  two  hours  they  were  crunching  numbers…  When  complete  Amazon  sent  bill  for  $89  while  at  $150  per  second  a  3  month  wait  would  have  cost  ~$1B    Fast  Forward:  July  2010  Amazon  Web  Services  poster  child,  Eli  Lilly  has  walked  away  from  using  the  cloud  compu<ng  service  aker  failing  to  come  to  terms  over  legal  indemnifica<on  issues  specifically  related  to  accountability  for  network  outages,  security  breaches  and  other  forms  of  risk  inherent  in  the  cloud,  to  Amazon  Web  Services.          

10  Key  Takeaways    

1)  The  Shik  to  the  cloud  is  inevitable  

2)  Cloud  models  are  growing  while  tradi<onal  models  largely  flat-­‐line  or  decline  

4)  Adop<on  for  most  will  depend  on  percep<on  

8)  Public  cloud  is  gaining  steam  

5)  Inhibitors  are  ge�ng  tac<cal    6)  2010  is  the  year  of  the  private  cloud  with  end  goal  of  building  a  Hybrid  solu<on  

9)  Commodi<za<on  takes  hold  and  shiks  the  basis  of  compe<<on  

10)  Almost  without  excep<on  IaaS  will  lead  to  an  examina<on  of  PaaS  

3)  Adop<on  drivers  are  first  centered  on  cost  savings  

7)  Private  cloud  deployment  in  midst  of  a  shik  to  management