demand in the early could era- talk cloudy to me

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Generating Demand and Enterprise IT Buying in the Early Cloud Era Based on Primary Research Sept 2011

© by WaveLength Market Analytics. All Rights Reserved.

Agenda

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Pioneers: Using or testing a cloud solution

Planners: Planning for a cloud solution

Stragglers: Not planning a cloud solution at this time

§  What are the technology trends among segments ? §  How to message the segments? §  How do segments buy?

How the market segments

42.1%

16.8%

8%

33.2%

41%

S: For each of the following types of cloud deployment, we’d like to know if it’s currently in production, in trial, is planned in 24 months? N=127

Cloud Pioneers: Using Cloud Computing

Cloud Planners: Planning for Cloud

Cloud Stragglers: No Plans

More enterprises are doing or thinking about the Cloud than those that are not.

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Cloud Pioneers: In Trial

In just three years, Pioneers and Planners expect about 30% of IT to be in the Cloud

20.4%

32.3%

15.8%

30.5%

2.8%

11.2%

2012 2015

% of IT outsourced to Cloud provider by...

Cloud Pioneers Cloud Planners Cloud Stragglers

Q: What percentage of your IT will be outsourced to a cloud provider by 2012? 2015? N=127 4

What are the technology trends among segments ?

Pioneers & Planners more likely to use SAN, NAS, & virtualized storage

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•  Pioneers and Planners both have a higher percentage of virtualized servers and higher virtualization densities than Stragglers

•  Virtualization is not a requirement for cloud, but both improve resource utilization

72.7% 62.3%

87%

71.2%

52.6%

68.4%

89.5%

52.9% 58.1% 46.3%

70.3%

41.7%

Virtualized Servers Virtualized Storage SANs NAS

Percentage of Each Segment Using Key Technologies

Cloud Pioneers Cloud Planners Cloud Stragglers

Pioneers already outsource more than planners & far more than Stragglers

13.9%

13.9%

25.0%

28.8%

21.3%

21.9%

15.6%

21.9%

34.4%

18.8%

22.8%

31.6%

33.3%

35.4%

39.7%

0% 10% 20% 30% 40% 50%

Storage

Data Back-‐ups

Network Management

Perimeter Security

Disaster Recovery

Pioneers Planners Stragglers

Q1. Yes or no, do you outsource any of the following functions? N=126

Pioneers prepare for Cloud with security & WAN upgrades

17.2%

10.9%

18.2%

25.9%

25.9%

37.0%

42.1%

39.3%

Increase WAN bandwidth for faster speeds

Migrate storage to SAN

Implement encryption

Upgrade perimeter security

Projects Prior to Cloud Deployment

Cloud Pioneers Cloud Planners

Q: For each of the following were they necessary before cloud computing, during initial deployment, follow-on work, future plans, or no plans? (n=78)

Besides SaaS, Pioneers mostly use private clouds and PaaS

9%

11%

21%

25.7%

32.2%

54.8%

78.2%

Hybrid Cloud

Public Cloud

Internal Private Cloud

IaaS

Hosted Private Cloud

PaaS

SaaS

Clouds in use/piloted

Q: For each of the following types of cloud deployment, we’d like to know if it’s currently in production, in trial, is planned in 24 months? N=127 9

In the next 24 months, Pioneers and Planners will aim for internal private, public, and hybrid clouds

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5.1%

7.9%

7.9%

10.5%

10.5%

11.7%

Public Cloud

PaaS

IaaS


Hybrid Cloud


23.1%

29.4%

33.1%

36.3%

36.3%

46.9%


PaaS

IaaS

Hybrid Cloud

Public Cloud


Cloud planned by all segments in the next 24 months

Additional clouds planned by Cloud Pioneers

Q: For each of the following types of cloud deployment, we’d like to know if it’s currently in production, in trial, is planned in 24 months? N=127 10

Pioneers & Planners move apps that are not mission critical

6%

2%

8%

8%

9%

8%

10%

2%

2%

4%

11%

4%

9%

12%

11%

9%

14%

11%

12%

6%

20%

14%

19%

0% 10% 20% 30% 40% 50% 60% 70%

Desktop apps

Accounting/Finance

Communications

Tier 1 storage

Supply Chain/ERP

Business intelligence

Back-‐up storage/disaster recovery

Collaboration

HR

Portals

CRM

Email

In Production In Trial In Planning Process

Q. Again for apps, is a cloud computing architecture in production, in trial, planned, or not planned? N=78 11

Pioneers mostly migrate legacy apps, Planners more likely to add new apps

38%

15%

21%

6%

20% 25%

15%

5%

Migrate Legacy App

New Custom Apps In House

Implement a New Packaged App

All three

Legacy or New Apps in the Cloud?


Q: Does, or will your organization in the next 24 months, use cloud architecture to.. ? (n=78)

How do we message to Pioneers and Planners?

Pioneers & Planners aim for cost cutting, speedy app deployment, & mobility

71% 63%

52% 52% 47%

42%

17.1%

38.7%

9.1% 18.8% 15.2%

8.6%

Reduce operational costs

More rapid application deployment

Increase mobility More nimble IT organization

Change Software licensing

Reduce management overhead

Motivators to transition to cloud

Cloud Pioneers & Planners Stragglers

Q: Using a scale from 1 to 6where 1 is not at all important and 6 is extremely important, please rate the following as motivators in your transition to cloud computing? N=127 % who say motivator is 5 or 6. 14

As for security concerns, reduced control & data breaches are tops for all segments

4.1 4.06 4.03 4.03 3.8 3.33

4.15 3.89 4.34

3.3

4.11 4.01

4.79 4.75 4.95

4.09 4.6 4.65

Reduced control/visibility

Data in transit access breaches

Stored data access breaches

Compliance requirements

Denial of service attacks

App access breaches

Concerns limiting cloud adoption

Pioneers Planners Stragglers

Q: Using a scale from 1 to 6 where 1 is not at all important and 6 is extremely important, please rate the following as security concerns that limit adoption to cloud computing? N=127 (Score represents an average rating where the max is 6)

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Non-‐security cloud concerns differ significantly by group

Q: Using a scale from 1 to 6where 1 is not at all important and 6 is extremely important, please rate the following as concerns that limit adoption to cloud computing? N=127 16

Concern Cloud Pioneers

Cloud Planners Cloud Stragglers

1 Network Delays Lack of audit/ remediation/ reporting

Lack of 3rd Party relationships

2 Initial start-‐up costs too high

Poor interoperability b/t cloud venders & internal IT

Initial start-‐up costs too high

3 Lack of 3rd Party relationships

Network downtime

Technology not yet proven

4 Lack of audit/ remediation/ reporting

No vendor neutral APIs Reduced control & visibility

All buyer groups say network is most evaluated infrastructure component

21.2%

12.1%

33.3%

15.2% 18.2%

20%

13.3%

33.3%

13.3%

20% 22%

18%

28%

14% 18%

Storage infrastructure

Servers Network Management tools Virtualization software

Most evaluated infrastructure component

Cloud Stragglers Cloud Planners Cloud Pioneers

Q. Starting with a 1, please ran the following according to how much evaluate a cloud provider’s underlying infrastructure? N=78 17

How do Pioneers and Planners

buy Cloud solutions?

Pioneers and Planners involve many vendor partners

48%

40% 33%

28% 29% 29%

21%

45% 50%

45% 45%

35% 30% 30%

Software vendors

Consultants Systems Integrators

VARs Hardware vendors

Non-‐Telco Service

Providers

Telco Service Providers

Involved partners


Q: For each of the following types of participants in cloud implementation, on a scale of 1 to 6 where 1 means “not at all involved” and 6 is very Involved,” what’s the involvement level of… ? N=78 19

Pioneers and Planners depend highly on software and integrators


Vendors that are Highly Involved…

Create strategy

Migrate Solution

Create strategy

Migrate solution

Software 32.1% 26.9% 77.8% 50%

Systems Integrators 31.6% 42.1% 22.2% 25%

Consultants 30.4% 27.3% 30.0% 22%

Hardware 29.4% 20% 71.4% 17%

Telco 25% 25% 50.0% 40%

Non-‐Telco Service Providers 17.6% 40% 33.3% 50%

VARs 12.5% 13.3% 33.3% 13%

Pioneers involve consultants and hardware to MANAGE

16.7%

18.2%

19.2%

20.0%

20.0%

26.7%

31.8%

Systems Integrators

Telco

Software

Non-‐Telco Service Providers

VARs

Hardware

Consultants

Cloud Pioneers' cloud app management partners

21 Q: For each of the following types of participants in cloud implementation, on a scale of 1 to 6 where 1 means “not at all involved” and 6 is very Involved,” what’s the involvement level of… ? N=78

Pioneers say software most important partner & Planners say it’s integrator

.0%

8.7%

17.4%

8.7%

8.7%

47.8%

8.7%

5.1%

8.5%

8.5%

15.3%

16.9%

16.9%

28.8%

Telco service providers

Value-‐added resellers

Hardware vendor partners

Consultants

Non-‐telco service providers

Systems integrator partners

Software vendor partners

Most important partner


22 Q: For each of the following types of participants in cloud implementation, on a scale of 1 to 6 where 1 means “not at all involved” and 6 is very Involved,” what’s the involvement level of… ? N=78

Both Pioneers & Planners find professional services key to purchase decision

42%

19% 13% 11% 9% 6%

60%

39% 36% 31%

19% 14%

48%

10% 19%

14% 10%

%

45%

60%

10%

55%

%

30%

Professional services

Business process re-‐engineering

Performance management & monitoring

SLAs Creation of vertical

applications

Training

Critical capabilities in selecting most important partner

Cloud Pioneers-‐ First Mention Cloud Pioneers-‐ Overall Cloud Planners-‐ First Mention Cloud Planners-‐Overall

Q: In selecting your most important partner, which 2 capabilities were most critical… ? N=78 23

Buying behaviors typical of shifting market: top management & trusted 3rd parties very important

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•  Nearly half of Pioneers say top business management is very involved

•  Pioneers and Stragglers both plan on leaning on trusted 3rd party more than a cloud provider

47.2% 35.7%

30.4%

Cloud Pioneers

Cloud Planners

Cloud Stragglers

Those Who Strongly Agree or Agree: Top Business Management is Very Involved with Purchasing Decisions

Regarding Cloud Computing

35.1%

14.3%

48.1%

Cloud Pioneers

Cloud Planners

Cloud Stragglers

Those Who Strongly Agree or Agree: We are more likely to use a consultant to help create

our cloud strategy than work with cloud service provider partners

Generate demand during the early Cloud era

Target the Right Audience

Don’t bother with organizations with fewer than 1000 employees at this point in the market

Look for organizations with high levels of outsourcing, & key technologies like SANs,

server & storage virtualization

Educate & partner with your best solution partners

Don’t ignore enterprise’s top business management

Use the Right Message

Show how your solution addresses needs of remote and mobile workers

Highlight your professional services capabilities and strengths

Address motivators as speed of deployment and cost reduction

Address concerns of security risks, reduced control, & network performance

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