The document is a presentation from Gartner analyst Lydia Leong discussing whether organizations should build or buy cloud infrastructure and platforms. The presentation covers the evolution of the cloud IaaS market, the need for a "bimodal IT" approach of both traditional and agile modes, and guidelines for a successful cloud strategy including establishing a cloud center of excellence. It concludes that most organizations will use multiple cloud providers and pick strategic winners for different applications.

2. CONFIDENTIAL AND PROPRIETARY
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other intended recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Should You Build or Buy Cloud Infrastructure and Platforms?
AWS re:Invent
13thNovember 2014
Lydia Leong
VP Distinguished Analyst
Cloud Computing
@cloudpundit

3. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
You, the Market, and the Future
Bimodal IT
Cloud IaaS market evolution
What does your future look like?
2

4. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
CONFIDENTIAL AND PROPRIETARY
Bimodal IT
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5. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
A “Digital Tsunami” Is upon UsCIOs agree: “My business and IT organization are being engulfed by a torrent of digital opportunities. We cannot respond in a timely fashion. This threatens the success of the business, and the credibility of the IT organization.”

6. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
The IT Response: No More One Size Fits All
45%
of CIOs currently have a second fast/agile mode of operation
Source: Gartner annual CIO Survey, 2014

7. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Bimodal IT = Marathon Runners +Sprinters
Mode1
Mode 2
Reliability
Goal
Agility
Price for performance
Value
Revenue, brand, customer experience
Waterfall, V-Model, high- ceremony IID
Approach
Agile, Kanban, low-ceremony IID
Plan-driven, approval- based
Governance
Empirical, continuous, process-based
Enterprise suppliers, long-term deals
Sourcing
Small, new vendors, short- term deals
Goodat conventionalprocess, projects
Talent
Good at new anduncertain projects
IT-centric, removed from customer
Culture
Business-centric, close to customer
Long (months)
CycleTimes
Short(days, weeks)
Think Marathon Runner
Think Sprinter

8. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Bridge Back from the Island of the Future
Impact on Mode 1
High
Low
Bimodal Maturity
High
Island
Extend
New Core
Replace- ment

9. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Bimodal Sourcing for Cloud IaaS
Mode1 Traditional
Mode 2 Agile
LEADERSHIP
IT operations / procurement
Enterprisearchitect
PRIMARY NEED
Cost reduction
Developer productivity
BUDGET
Central IT
Business
MARKETVIEW
Low-cost commodity (?)
Highly differentiated
8
Mode 1
Mode 2
Stuck in the middle
"Fit for no one"

10. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Guidelines for Success
1.Fast provisioning != Agility. You can’t sprinkle on agility any more than you can add quality.
2.It’s not just about infrastructure. Think about the entire application stack.
3.It’s not just about the operational benefits. Improve the application lifecycle.
4.The infrastructure isn’t the hard part. Transforming the organization –that’s hard.
9

11. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
CONFIDENTIAL AND PROPRIETARY
Cloud IaaS Market Evolution
10

12. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Cloud IaaSIs Not a Commodity
11
Compute
Storage
Network
Management
Solutions
Differentiated solutions
Integrated management
Flexible low-cost resources
IaaS naturally pushes up-market to PaaS.

13. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
IaaS and PaaS: Control vs. Manageability
12
SP
SP
SP
SP
Yours
Yours
Automation
Assisted
SP
Data Center
Virtual Machine
IaaS
IaaS+
IaaS++
Yours
1-Click
Install
Automation
Assisted
SP
Middleware
PaaS
More control
Easier management

14. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
IaaS Absorbs PaaS Framework Functions
13
PaaS
Converged IaaS+PaaS
Containers
Containers asa service, running inside VMs
Application runtimes
Portable containerenvironments (Docker)
Request router
Container-awareload balancing as a service
Servicebroker
Credentials as a service

15. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Brutal Competitive Dynamics
August 2013
May 2014
From: "Magic Quadrant for Cloud Infrastructure as a Service", 19 August 2013 (G00251789)
From: "Magic Quadrant for Cloud Infrastructure as a Service", 28 May 2014 (G00261698)

16. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
The Advantages of Scale
15
Greater efficiency of
Infrastructure Operations
Better leverage of
Software Development
Greater breadth and depth of
Ecosystem
Software is a scale game. No scale = Forced into niche.

17. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
•Market share concentrated with top 2 to 4 providers
•Highly differentiated offerings
•Large number of niche providers
•Niche providers may be more commodity (geographic focus)
•Businesses will use multiple providers
•Businesses will choose 1 or 2 strategic providers
•Most applications will be deployed to a single provider
•Provider for each app chosen by use case
Customers Will Pick Strategic Winners
16

18. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
CONFIDENTIAL AND PROPRIETARY
What Does Your Future Look Like?
17

19. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Governance, Not Control
18

20. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Strategic Planning Assumptions
19
Not everything can or should be cloud
Some workloads must remain on-premise due to regulatory compliance or tie to physical location
Private cloud-building technology will not deliver breadth, depth, innovation of service providers
IT orgs likely can’t update, innovate, reduce costs of internal clouds as quickly as providers

21. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
No One Tool to Rule Them All
20
Bimodal, hybrid IT portfolio
Not hybrid infrastructure management
Best-of-breed native-oriented tools
Not commoditized resource management
Unified tooling only where it makes sense
Financial management, compliance, etc.

22. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Build It Yourself? Make It Competitive!
21
Has the necessary features –
Not just for IT Ops but devs/engineers/scientists
Cost-competitive –now and in 3 years
Serves a distinctive use case
Consider PaaS instead of IaaS

23. @cloudpundit
© 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Establish a Cloud Center of Excellence
22
Provide cross-functional leadership
Enterprise architect as leaders
Establish policies
Governance, security, use cases
Serve as a broker
Guide to best practice, manage vendors

24. CONFIDENTIAL AND PROPRIETARY
This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other intended recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2014 Gartner, Inc. and/or its affiliates. All rights reserved.
Lydia Leong
VP Distinguished Analyst
Cloud Computing
Lydia.Leong@gartner.com
Twitter: @cloudpundit
Gartner Research

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