Cloud.overview.2010.07.15[1]
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Cloud.overview.2010.07.15[1]
- 1. <Insert Picture Here> Cloud Computing Overview Eugene Ho ESG Business Analysis July 14, 2010
- 2. Cloud computing is about to hit mainstream… Early markets We Were Here “the Chasm” Mainstream markets Late market We Were Here We Are Here IDC: The Maturing Cloud: What the Grateful Dead Can Teach Us About Cloud Economics (April 15, 2010)
- 3. And the hype of promise, expectations, and performance is at its peak… Gartner: Hype Cycle for Cloud Computing, 2009 (July 16, 2009)
- 4. What is Cloud Computing? • Forrester: A standardized IT capability (services, software, or infrastructure) delivered via Internet technologies in a pay-per-use, self-service way. • Gartner: A style of computing where scalable and elastic IT-enabled capabilities are delivered as a service to external customers using Internet technologies. • IDC: – Public cloud: Accessing “IT on demand” over the Internet with pay-as- you-go models such as those from salesforce.com, Google Apps, and Amazon EC3 where IT infrastructure is shared across multiple customers. The IT infrastructure is typically highly standardized and the management highly automated. – Private cloud: A similar IT strategy as public clouds but it is applied within a single enterprise or an extended enterprise as an internal shared set of infrastructure. Forrester Research: The Evolution of Cloud Computing Markets (July 6, 2010) Gartner: Five Refining Attributes of Public and Private Cloud Computing (May 5, 2009) IDC: Cloud Computing Attitudes (April 2010)
- 5. Types of Clouds • Attributes of all clouds – Service-based – Scalable and elastic – Shared – Metered by Use – Uses Internet technologies • Public clouds (e.g. Amazon) – Public, self-service, standardized • Hosted (virtual private) clouds – Differs from traditional hosting via infrastructure standardization, pricing models, and usage flexibility. • Private Cloud – Beyond just virtualization and self-service – relies on governance model of a highly standardized infrastructure with utilization risk borne by IT, not the business side. Forrester Research: The Evolution of Cloud Computing Markets (July 6, 2010) Gartner: Five Refining Attributes of Public and Private Cloud Computing (May 5, 2009)
- 6. Cloud Market Segments and Taxonomy Forrester Research: The Evolution of Cloud Computing Markets (July 6, 2010) Public Clouds experience lower margins, constant competitive pressure in more commoditized market. Traditional hosting services are transforming themselves into Hosted Cloud services by establishing more customer intimacy and capabilities. Virtualization tools, IT management SW, middleware, consulting services are predominant products for the Private Cloud market.
- 7. Cloud Services with the Highest Chance for Success •Short Term: IaaS •Public web and Service Providers established •Medium Term: PaaS •Long Term: SaaS Not as much data around Private Clouds Forrester Research: TechRadar™ For Infrastructure & Operations Professionals: Cloud Computing, Q3 2009 (October 2, 2009)
- 8. Market Opportunity as Seen by Public Cloud Providers Gartner: Forecast: Public Cloud Services, Worldwide and Regions, Industry Sectors, 2009-2014 (June 2, 2010) •N. America is driving much of Cloud development. •Gov’t., Fin. Services, Comms and High Tech have significant growth opportunities, and will need the right infrastructure to realize it. Note: Private Cloud services not included
- 9. Public Cloud Competition Vendors Considered, but Not Included: •DataPipe •EngineYard •Google •Microsoft •ThePlanet •Voxel •XCalibre Communications Recently Dropped: •NTT America •Qwest •Verizon Business Gartner: Magic Quadrant for Web Hosting and Hosted Cloud System Infrastructure Services (On Demand) (July 2, 2009)
- 10. Market Sizing – IT Services Only for all Clouds Gartner: Forecast: Understanding the Traditional IT Services Opportunities Related to Cloud Computing, Worldwide, 2009-2013 (December 3, 2009) Included Market Segments: •Business consulting •IT consulting •Application development •Integration services •Deployment services •IT (day-to-day) management Segments Not Included: •Business Process Utility services •Professional Services •Product support •Carrier network spend •Infrastructure utility services Risk of cloud market growth at the expense of traditional IT spend.
- 11. Market Sizing – Cloud PS Services for US Assuming US IT Services spend ratio is equivalent to its share of WW cloud revenue (56%), the US PS spend forecast for 2011 is almost equivalent to all other US cloud-related IT spend. PS Competitors include (but not exclusive to): •Accenture: Cloud computing accelerator •Capgemini: Infostructure transformation services •CSC: Cloud assessment service •Dell/Perot: Cloud integration service •EMC/Cisco/VMware: Cloud computing strategy service •HP: Cloud consulting services for enterprise IT organizations •IBM: Consulting services for cloud •Oracle/Sun: Cloud strategic planning/consulting service IDC: U.S. Cloud Professional Services 2010–2014 Forecast (May 2010)
- 12. WW Private Cloud Forecast Figure 9. Worldwide Private Cloud Computing Server Revenue and Shipments by Workload Category 2009-2014 IDC: Worldwide Enterprise Server Cloud Computing 2010-2014 Forecast (May 2010) • WW Total for 2011 at $9.06B • Data includes servers and storage • Collaboration market includes: • Mail, Messaging • Conferencing • Social Platforms
- 13. Even More Opportunity for Private Cloud Implementation Services Implementation Services already forecasted for over 60% of IT Services spend related to Cloud (Gartner, Dec. 2009). But most orgs will be relying on internal resources to drive implementation. Great opportunity for Trusted Advisors and Enterprise Architects to influence cloud deployment model. IDC: Cloud Computing Attitudes (April 2010)
- 14. Integrated Service Providers Competition – Competitive Partners for Private Cloud Deployments None of the big IT vendors offer enough IaaS or B2B integration outsourcing services to meet Gartners’ criteria for inclusion. •Oracle •IBM •Microsoft •SAP However, all offer strong partnerships with at least one ISP here. Gartner: Magic Quadrant for Integration Service Providers (November 20, 2009)
- 15. Private Clouds Preferred over Public Clouds IDC: The Maturing Cloud: What the Grateful Dead Can Teach Us About Cloud Economics (April 15, 2010) IDC: Cloud Computing Attitudes (April 2010) Private preferred over Public, mostly for availability and control aspects over the deployment, resource utilization, and workload changes.
- 16. But the Preference Gap for Private Clouds Varies Depending on Application IDC: The Maturing Cloud: What the Grateful Dead Can Teach Us About Cloud Economics (April 15, 2010) Web Apps experience the most indifference. Customers prefer Server and Storage On Demand to remain dedicated to the org.
- 17. Gartner’s View of APaaS Competitors – Oracle • Oracle – Cloud support minimal, compared to IBM, MS – Gartner focuses on WebLogic Server Amazon Machine Image (AMI) – Gartner doesn’t cover Oracle’s Private Cloud support • Sun – Zembly cloud-based application development and runtime platform • Very dynamic, but ideal for lightweight, low traffic usage • Cloud-based only, no on-premises version • Popular for social media services and platforms, e.g. Facebook, iPhones, Web widgets Gartner: Who's Who in Application Platforms for Cloud Computing: The Enterprise Generalists (September 16, 2009)
- 18. Gartner’s View of APaaS Competitors - IBM • Adoption of application platform technology for cloud computing has been slow. • Most of cloud-computing initiatives are focused on the virtualized system infrastructure layer and on private cloud deployments (e.g. former IBM Blue Cloud and the new IBM WebSphere CloudBurst Appliance). • IBM sees the private cloud as a pool of computing resources used by multiple projects inside an enterprise. Neither elasticity nor multitenancy is essential. • Cloud computing org. reports directly to CEO. • WebSphere Application Server AMI (Amazon Machine Image) leading the way. Gartner: Who's Who in Application Platforms for Cloud Computing: The Enterprise Generalists (September 16, 2009)
- 19. Gartner’s View of APaaS Competitors - Microsoft • Broadest approach to Cloud support – Consumers and Enterprise – On-premise, off-premise, 3rd party hosting – Advertising, subscription, licensing models • Windows Azure, their primary offering, to provide computing and storage as a service. • Windows Azure Platform includes: – SQL Azure – .NET service bus and Access Control services Gartner: Who's Who in Application Platforms for Cloud Computing: The Enterprise Generalists (September 16, 2009)
- 20. Cloud Benefits – Customers • Front-end opportunities – Availability, agility, flexibility, scalability – Pay (or internal cost transfers) per use – Faster time-to-value • Fixed costs converted to variable costs; also gives more freedom in capital allocation • Back-end opportunities – Faster time-to-value – Minimal client investment – Better infrastructure utilization and scale – Flexibility and reaction speed to business changes Gartner: The What, Why and When of Cloud Computing (June 4, 2009) Gartner: Cloud-Computing Service Trends: Business Value Opportunities and Management Challenges, Part 2 (February 23, 2010) Forrester Research: The Evolution of Cloud Computing Markets (July 6, 2010)
- 21. Cloud Concerns – Vendors • Shrinking ERP market – Standardized cloud offering more attractive than customized traditional deployment • Traditional vendors being left out of RFP processes for Cloud-based projects – Owning the architecture becomes critical here • Lack of maturity in technology and offerings – Opportunity for Oracle to lead in the development • Cloud washing – labeling everything over the network as “cloud” – Incorrect Customer understanding and expectations – May undermine more robust and large-scale enterprise solutions Gartner: Cloud-Computing Service Trends: Business Value Opportunities and Management Challenges, Part 2 (February 23, 2010) Forrester Research: The Evolution of Cloud Computing Markets (July 6, 2010) IDC: Cloud Computing Attitudes (April 2010)
- 22. Cloud Concerns - Customers Security surpasses all other cloud-adoption concerns. Technology maturity, costs, and installed base compatibility follow. Forrester Research: As IaaS Cloud Adoption Goes Global, Tech Vendors Must Address Local Concerns (January 10, 2010) IDC: Cloud Computing Attitudes (April 2010)
- 23. Gartner Predictions – Application Infrastructure for Cloud Computing • By 2014, some form of packaged IaaS will be used to address more than 75% of all cloud-to-cloud service integration requirements. • By 2014, fewer than 25% of Global 2000 companies will use a cloud-based database management system (DBMS) as a service for production applications, although most will have experimented with cloud-based DBMSs. • By year-end 2010, Complex Event Processing (CEP) software products will be used in more than 10 public-cloud-based application services; by year-end 2011, CEP software products will be included in more than 25% of public-cloud platform-as-a-service (PaaS) offerings. • By 2013, at least 20% of enterprises will use cloud services for security testing of their on-premises applications. • By 2014, 35% of IaaS consumed worldwide will be delivered as an embedded feature of cloud service brokerages. • Through 2015, more than 90% of Enterprise Service Bus use related to cloud computing will be used to incorporate cloud-based services into on-premises applications and will be based on-premises. Gartner: Predicts 2010: Application Infrastructure for Cloud Computing (November 30, 2009)
- 24. Gartner Predictions – Application Platforms for Cloud Computing • By 2013, most leading enterprise application infrastructure vendors will offer a new, shared-everything APaaS, with built-in support for multitenancy, which represents an increase from zero in 2009. • By 2015, fewer than 35% of new applications deployed on platform-as-a-service (PaaS) infrastructures will leverage platform services from multiple cloud providers. • By 2014, portal as a service will be the primary method of delivering enterprise portal capabilities for as many as 10% of enterprises, an increase from fewer than 1% in 2009. • By 2014, the number of business application offerings as a service that use separately offered, "productized" cloud application platforms will increase at least 400%, compared with 2009. • By 2013, BPM suites (BPMSs) as a service will power more than 25% of enterprise business process utility (BPU) solutions, up from fewer than 5% in 2009. • Through 2015, at least 50% of new, professionally developed cloud applications will be created using a common, open-source integrated development environment (IDE). Gartner: Predicts 2010: Application Platforms for Cloud Computing (November 30, 2009)
Editor's Notes
- Note that specific cloud applications on the rise. And cloud infrastructure models have passed the hype stage and are moving into sustaining mode.
- So… given all the hype, what is Cloud Computing? All the major analysts have similar definitions, focused on: standardization, pay-per-use, flexibility, leveraging Internet technologies. IDC offers a distinction between Public and Private clouds.
- Expanding on IDC’s distinction between Private and Public clouds, we’ll look at the 3 kinds of clouds currently in place. Public clouds are what receive the most press. Hosting services are transforming themselves into Hosted Cloud services by establishing more customer intimacy and capabilities. Private clouds are what’s most relevant to Oracle now. More details on this later in the presentation.
- Forrester provides a useful model to view the various Cloud segments. Here, you’ll see the that the often-used cloud support models lie in the Public Cloud segment: Infrastructure as a Service, Platform as a Service, Software as a Service, Business Process as a Service. Public clouds are not what Oracle’s technology and capabilities are best suited for. This is fortunate, as that business is a low-margin, competitive business. Public Clouds may find use for Oracle’s products, which is fine, but we may not want to focus resources heavily on this. Oracle’s products are best suited for Private Cloud implementations.
- This chart shows the various Cloud services with the highest chance for Customer success. The emphasis here is more for public clouds, and not private.
- This data is a different take from market data that we normally see. This represents the revenue opportunity of Oracle’s customers. With 2011 forecasted at $81.3, with an avg. annual growth rate over 20% over the 4 years, they have incredible incentive to build up their capabilities quickly, and need all the help they can get. North America, with 56% of the WW share, is forecasted at $45.5B. Note Private Cloud services are not included here, as it would be difficult to attribute revenue to Private Cloud implementations, only cost savings.
- This is a snapshot of who’s aiming for the $81B for 2011, many/most of which are already Oracle’s customers and/or partners.
- This is the market snapshot relevant to Oracle. If you take N. America’s 56% estimate of WW market in the previous slide, for 2011, it would be $2.5B. Note that Professional Services isn’t included here. PS data follows. While the share rate of Cloud-based IT services is growing, it’s at the potential risk of traditional IT spend.
- Overall growth is slower for PS than for cloud-based IT services at 35.6%, but 26.5% is still very high. The products covered in this PS definition has some overlap to the IT Services (est. 2011 N. Amer. market, $2.5B) listed in the previous slide, but the net value-add is still compelling.
- With the 2011 WW total at $9.06B, if we subtract the 2011 IT Services value of $4.39B, we get the net of around $4.67B for Servers, Storage, etc. N. American share at 56% is about $2.62B. This should be a compelling argument to Hardware Sales to support cloud projects. Note the Collaboration market, at 40% of the total Private Cloud market in 2011, is the only one that’s decreasing in size. This may be due to those applications moving to the Public Cloud.
- From the earlier data, we know that Implementation accounts for over 60% of cloud-based IT services (for public and private clouds). Total N. Amer. Cloud Implementation market for 2011 is estimated at $1.55B ($2.774B x 56%). This is taking into account that most of implementation will be preformed in-house. Any possibility in influencing implementation to IT Vendors has a huge impact to market opportunity.
- This is a snapshot of the service provides Oracle is competing with for implementation. Note none of the major IT Vendors satisfy all of Gartner’s requirements. There’s a lot of opportunity to: expand on our capabilities to meet the Cloud market strengthen our partnerships with integrators, to make sure we’re the vendor-of-choice. (Partnership vs. targeted acquisition is not within the purview of the author).
- So why have we been focusing on Private Clouds? Primarily because organizations prefer private over public, for the reasons they believe to be true as listed here. If anything, these areas indicate their areas of most concern.
- Web apps already proliferate the public space, so it makes sense why orgs. have less concern over placing them on the public cloud. Organizations seem to want to more directly control Server and Storage capacity and utilization. Technical Apps are 3rd in priority to keep in-house.
- The APaaS market is one view of Public Cloud support leadership.
- IBM is focused more on private clouds than public. IBM appears to be using Cloud Washing to its advantage, offering products that are outside of commonly-agreed-upon definitions for Cloud services. And yet it’s very strong in this market.
- Cloud’s support, governance, and investment model promotes faster time-to-value and minimal investment for Business Units.
- There’s a very real risk of being left out of the game because a vendor is perceived as providing only traditional services. Integral placement of Trusted Advisors and Enterprise Architects are critical here, to make sure we’re invited to the game.
- Enhancing products to have solid security capabilities appears to be the low-hanging fruit here, along with providing the Field with all the necessary materials to effectively address this concern.
- The ability to offer plug-and-play services with no IT development work will be critical by 2014.
- By 2015, as cloud matures, organizations will lean towards single-IT vendors for their cloud support.