HYBRID CLOUD: The Next Frontier

This report is solely for the use of Zinnov Client and Zinnov Personnel. No Part of it may be quoted, circulated or reproduced for distribution outside the client organization without prior written approval from Zinnov

2

India market presents a solid foundation for cloud uptake

$32 Bn+IT-BPO Market in India (2013) expected to reach $100 Bn by 2020

>15%Growth in Indian IT Market Higher than China

$4 BnExpected Cloud Spending in India between 2013-17

>30%Current Growth of Public Cloud Market in India

Cloud Market Landscape Ecosystem Drivers

5000+Large Enterprises in India; 56 Enterprise feature in Global 2000

10Mn+Technology Ready SMBs; Many First Time IT Buyers

>10%3rd Party Service Provider Revenues from Cloud by 2016

4XIncrease in Indian Cloud ISVs since 2009

3

While cloud provides several benefits over legacy models, certain challenges exist

Immensely capital intensive – high TCO

High time to implementation

Lack of flexibility and Non-scalability

Reduced focus on core competencies

Subject to technology obsolescence

Dedicated IT staffing and increased administration costs

Legacy Systems

Highest security for mission-critical data

On-premise infra or 3rd party managed service

Private Cloud

Cost effective

Enhanced flexibility & scale

Less security, privacy and compliance

Limited integration to On-premise resources

Shared infrastructure

Public Cloud

Capital intensive

High complexity Hybrid

Cloud

Hybrid Cloud model combines the strengths of both Public and Private Cloud to

provide an optimal solution

4

Several newer hybrid cloud scenarios are emerging and witnessing adoption

Lift & Shift VMs

Hybrid Cloud Storage

Application Test Bed

Moving Existing Workloads to Cloud

A B

C D

Shift the VMs from private to public cloud to address peak loads

Keep confidential data locally & leverage public cloud capabilities for processing

While the development of an application can reside on private cloud, public cloud presents an ideal environment for scalability testing

As the IT infrastructure is moving to the cloud, customers expect the existing applications such as ERP, CRM etc. to work on the cloud similar to on-premise

Automatically tier the storage into hot, warm and moderate data and start pushing the in-frequently used data on to public cloud

MS acquired StorSimple in 2012 for Hybrid Storage solutions – keeps hot blocks of data locally & shifts cold blocks to Azure

~50% Reduction in storage costs by Steelcase Inc. using MS StorSimple

Ratnakar Bank signed a 5-year partnership for Hybrid Cloud bursting for dedicated resources during peak hours

Novatium utilized on-demand virtual infrastructure to test & prototype their apps

Savings on staffing, infrastructure set up and maintenance costs

redBus migrated its app provided to bus operators (for ticketing etc.) onto the cloud SaaS to handle peak traffic

~40% Cost Benefits realized and up to 3X increase in traffic to redBus

5

Hybrid cloud deployments offer a flurry of benefits to end users

On-Demand Elasticity & Cloud burstingby leveraging both public & private cloud infrastructure depending on the application needs

Security for Mission-Critical Data Control on data location and security (similar to private cloud) for mission critical applications

Economies of Scale for Non-Critical ApplicationsBy putting non-mission critical data and mass usage applications on public cloud infrastructure

High Flexibility and ScalabilityHighly flexible, self-serve and shared governance model for its customers

Benefits of Hybrid Cloud Model

Hybrid Cloud

Enables the Customers to “Build their own cloud as

they like”

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Consequently there is a massively positive outlook towards Hybrid Cloud deployments

1Wipro-Cisco joint CIO survey by Forrester; 2IDC Worldwide survey for Infosys; Company press releases; Articles; Zinnov Analysis Source:

Indian CIOs say Reduction in TCO for Infra-related spend is the major Hybrid benefit

78%

Indian CIOs express readiness to implement Hybrid solution

40%

IT Stakeholders feel choosing best cloud providers & ensuring integration is most critical

52%

Cloud Vendor Quotes

More than 60% large enterprises will move to a Hybrid cloud setup over the next few years

-Infosys Cloud VP & Global Head

Hybrid cloud is the platform that will dominate the industry moving forward…

-Senior VP at Capgemini

Hybrid infrastructure environments are natural for any enterprise these days to get benefited from the economics of scale…

-MD, Cloud360 at Cognizant

7

Several key factors have to be considered for planning a hybrid cloud deployment (1/2)

Quantum of Application Usage (Load) & Frequency of Application Usage

Criticality of the Process Under Consideration

Criticality of the Application for Business

Data Security & Regulatory Requirements

Need for Interoperability between Cloud & Legacy Systems

Consistent

Seasonal

Strong case for Deployment

Medium case for Deployment

Negligible case for Deployment

High

Low

High

Low

High

Low

High

Low

Public Private

1

2

3

4

5

Hybrid Cloud can address the Seasonal variations and peak

loads adequately

Hybrid Cloud can support both:• High security requirements

for mission-critical applications & data

• Low security needs for Non-critical applications & data

Hybrid Cloud provides high integration of legacy systems

with Cloud infrastructure

Case for Hybrid Deployment

8

Several key factors have to be considered for planning a hybrid cloud deployment (2/2)

Criticality of the Application for Business

High

The website is the only medium of engagement with customers & navigation experience is critical

Private Public

Customer uses his credit/debit card for online payment

Criticality of the Process Under Consideration

High

Private Public

Customer information is highly confidential in nature

Data Security & Regulatory Requirements

High

Private Public

Transaction link back to customer profile in CRM tool

Interoperability between Cloud & Legacy Systems

High

Private Public

~10X spurt in traffic on website during festive season (October)

Quantum of Load & Freq. of Application Usage

Seasonal

Public Private

Consider a large e-tailer using an e-commerce application:

• Multiple city offices and delivery centers

• Website witnesses predictable traffic except for October where traffic is ~10X

• Invested in both public cloud (for non critical applications) and private cloud infra

Illustration for a Hybrid Cloud Deployment

9

The economics already favor a hybrid cloud approach

0 200 400 600 800 1000 1200 1400 1600 1800 20000.0%

4.0%

8.0%

12.0%

16.0%

20.0%

0.096

0.1460.163 0.168 0.161 0.159

Aggregate Cost Savings against Private Datacentre over 4 Year

Period1

Cost

Savin

gs

(%ag

e)

Number of VMs in the Datacentre (Private Cloud)

Initial Year

Year 1 Year 2 Year 3

Total Savings

Hybrid Cloud

0

200,000

400,000

600,000

0.0%10.0%20.0%30.0%40.0%50.0%

16.8%

3.0%

28.2%36.0%

38.5%

Cost

S

avin

gs

($)

Cost

Savin

gs

(%ag

e)

Hybrid Cloud Savings against Private Datacentre (500 VMs)2

Cost savings in Hybrid deployment at a steady state3 as compared to Private cloud datacenter35-45%

Aggregate Cost savings in Hybrid cloud over a period of 4 years9-17%

Reduction in Total Cost of Ownership (TCO) with Hybrid deployment over 4 years2-3X

Notes: 1,2 Cost factors include only server (hardware & software), storage, data transfer and system management software costs. Assuming VM growth in the considered enterprise is 5% and storage growth is of 8%. Percentage of workloads moving from private datacenter to public infrastructure is assumed to increase from 5% in initial year to 35% in year 3. The models considers Microsoft infrastructure (including Windows server R2 and System center R2 software deployments) for both public & private cloud scenarios; 3Steady state depends on the growth of virtual machines in an enterprises datacenter and a proportion of workloads moving from private datacenter to public cloud infrastructure

10

However, certain constraints currently keep the IT decision makers wary of hybrid deployments

Addressing the Key Barriers to Hybrid Deployments

• Efficient local and remote management of server resources is a critical requirement cited by the IT stakeholders

• Cost effective management of hybrid deployments is a key consideration

Need for increased management efficiency for a

diverse datacentre

1

• Common user identity to access on premise and cloud resources is quintessential for successful hybrid cloud deployments

• Protecting corporate data and ensuring regulatory compliance is a must have

Consistent and flexible user access to corporate resources

while protecting data

2

• Integrated billing & provisioning of all services in all locations across multiple clouds is important (due to higher TCO and complexity in managing multiple cloud vendors for Hybrid)

• IT departments prefer working with vendors who can offer unified management framework of the hybrid cloud deployments

Complexity of managing multiple vendors

3

11

Recommendations

Recommendations for Hybrid Cloud Vendors

Up level Knowhow of Hybrid Cloud Scenarios Suitable for

Current IT Set Up

Leverage One-Stop-Shop Vendors for Successful Hybrid

Deployments

Framework Driven Approach to Prioritize Workloads for Hybrid

Cloud

Attach Hybrid Cloud Strategy to Business Growth and Not

Just Cost Savings

Recommendations for CIOs/IT Decision Makers

Develop Robust ROI Models For Hybrid Cloud Adoption Specific to Indian Customer

Scenarios

Evangelize Business Growth Led Use Cases for Hybrid

Cloud

Drive SI & ISV Partnerships and Offer One-Stop-Shop Hybrid Cloud Solutions

Invest in Developing Hybrid Cloud Focused Talent in the

Ecosystem

Thank You

info@zinnov.vom www.zinnov.com

@zinnov

This report is solely for the use of Zinnov Client and Zinnov Personnel. No Part of it may be quoted, circulated or reproduced for distribution outside the client organization without prior written approval from Zinnov

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