how x-as-a-service is shuffling the sourcing deck

© 2015 Information Services Group, Inc. All Rights Reserved.

Steve Hall

XaaS is Shuffling the Sourcing Deck

© 2015 Information Services Group, Inc. All Rights Reserved 3

Meet our Panel

Alex Shootman President

Michael Ludwig Chief Product Architect

Chuck Adams Chief Cloud Architect

Jeff Muscarella Partner


Cloud and emerging technologies are not fads.

Growth of cloud market

4-6x is the growth rate of

off-premise IT.

60% of all companies

will use SaaS w/in next 12 months.

84%

of new software is SaaS.

SaaS is fastest with PaaS providing the

environment (e.g. Force.Com)

Adoption by large enterprises

76% of enterprises have a

formal cloud strategy.

74% of enterprises using cloud will increase

spending by > 20%.

Driven by the CIO

90%

of cloud decisions and operations

involve IT.

66% of SaaS purchase

orders are signed or driven by IT.


Security & Agility

Service Broker

Digital transformation tops the CIO agenda.

2015 2016 2017 2019 2018 2020

60% of CIOs will be replaced by or transitioned to Chief Digital Officers


The disruption means complete business transformation.

Business transformation

Digital & Automation

Consumerization of IT

•  Digital Services

•  Social •  Mobility

Technologies are driving

•  IaaS / PaaS

•  SaaS

•  Analytics

Cost

Competition

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IT Services

What does this mean for the sourcing industry?

Computer Equipment

Software

Public Cloud

$140 $110

Public & Telco Commercial

Engineering Services


Public cloud software

Public cloud infrastructure

o  Avoid capex o  Avoid upgrade o  Pay for premium features

o  Dependent on usage & features o  Pay more than internal IT for high usage

Public cloud vs. Internal IT (average cost)

Average Compute Instance Utilization

Public Cloud Avg.

Internal IT

Source: ISG Research


Business drivers are changing.

Initial Objectives

o  Reduce total cost of ownership

o  Replace capital expenditures with short-term operational expenditures

o  Modernize legacy applications

o  Engage like ITO

o  Optimize IT

Emerging Objectives


The new ecosystem is incredibly complex

CloudMatrix

CloudCompute

Valu

e A

dder

s C

lou

d O

ffer

ing

s

Cloud Brokers

Cloud Brokerage Software

Cloud Management

SaaS

PaaS

IaaS


Requiring us to acquire new skills and new partners …

Identify cost opportunities

Broker cloud services

Manage consumption and understand assets

Renegotiate license agreements


and answer a different set of client questions:

What is the cost of my current environment (including applications and workload)?

Is my consumption aligned with the industry? What am I consuming on premise and in the cloud?

What would it cost to support the workload or applications in the cloud?

Should I restructure my licensing agreements if I start moving applications to the cloud?


Panel Questions & Answers

Alex Shootman President

Michael Ludwig Chief Product Architect

Chuck Adams Chief Cloud Architect

Jeff Muscarella Partner

www.isg-one.com

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