1. Cloud computing in South Africa
Reality or Fantasy?
AIGS Conference
18th June 2012
Chantel Lindeman

2. Agenda
Evolution of cloud computing
Platform as a Service: Next Hot Cloud
Uptake of cloud computing: The Reality
South African Cloud Computing Market
Data Centre Uptake: Virtualised Environment
Where is your Business?
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3. Generational shift of computing platform over the past 40
years
Technology Economic Business
Centralised High upfront costs
Optimised for
compute & storage, for hardware and
efficiency due to
thin clients software
high cost
PCs and servers for
Perpetual licence
distributed Optimised for agility
for OS and
compute, storage, due to low cost
application software
etc.
Large DCs,
Order of magnitude Pay as you go, and
commodity HW,
better efficiency only for what you
scale-out, devices
and agility use
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4. Three deployment models available for cloud computing
• Public cloud offers the opportunity
to fully exploit the cost savings
inherent in cloud computing
services
‒ Company relies on the service
provider for security and data
backup
• Private cloud ensures more security
as data and applications are stored
internally
‒ Some companies use it initially to • Hybrid cloud enjoys ‘the best of both
gain insights and confidence into worlds’, as it offers the flexibility to have
Cloud computing services SaaS and the discretion on managing
‒ It still requires upfront costs and the security and data
hands-on management, therefore it ‒ Costly to keep resources on a private
does not fully exploit the cost- cloud while the resources on the public
reduction potential cloud pose a security risk
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5. Agenda
Evolution of cloud computing
Platform as a Service: Next Hot Cloud
Uptake of cloud computing: The Reality
South African Cloud Computing Market
Data Centre Uptake: Virtualised Environment
Where is your Business?
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6. The integration between IaaS and SaaS which leads to
PaaS
• Public cloud IaaS is driven by
cost efficiency and scalable
storage
• Private clouds embrace the
platform = PaaS
‒ Increases efficiency and
productivity of Enterprise
Development Organisations
• Public SaaS cloud moves
towards PaaS
‒ Customer demands for isolation
and customerization
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7. The broken promise of cloud - enterprises restrict cloud
usage to non critical apps (e-mail and web hosting)
Robust and integrated PaaS solution can achieve the efficiency of a shared cloud
environment while extending the benefits beyond hosting of isolated apps
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8. Most PaaS services are available to users on demand,
with the provider managing the hardware and software
• Easily replicable images • Enterprise IT department is able to specify
enables developers in performance specs
minimizing coding • Leverage cloud with higher degree of
• Application can be deployed confidence
immediately
Decrease Reduce risk
development in cloud
time environment
• Co-ordinate alignment of
applications with corporate • Manage SAP and Web
requirements for security applications
Increase Manage
quality mission
and critical
control systems
Safely test • Bringing together of new and
• Applications can be tested at environments Integration legacy applications together
same scale as production separately with minimal coding
environment
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9. Agenda
Evolution of cloud computing
Platform as a Service: Next Hot Cloud
Uptake of cloud computing: The Reality
South African Cloud Computing Market
Data Centre Uptake: Virtualised Environment
Where is your Business?
9

10. Global Cloud Market Takes Off: This what is what the
market is saying including Frost & Sullivan …
Predicted Global Cloud Market
300
250
Revenue (Billion dollars)
200
150
100
50 Predicted
0
2008 2010 2012 2014 2016 2018 2020
Years
Source: 2011 Forrester Research
The global cloud market is predicted to increase fro $41 billion in 2011 to more
than $241 billion by 2020
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11. … yet, adoption remains slow due to multitude of factors
• Providers have captured the Familiarity and adoption of IaaS
earlier adopters Familiar with or have considered
IaaS, but no plans to implement Have never
• Believers are convinced of the 37% heard of IaaS
11%
benefits of cloud computing
‒ However, they are concerned
with cloud security Unconvinced Unfamiliar
• The Unconvinced are less likely
to recognise the benefits of cloud
Believers
computing
‒ Lack of cost reductions
‒ Private data centres are at low
risk of incurring securing breach Not very familiar
with IaaS
• The Unfamiliar perceptions of the Familiar and planning to
29%
implement IaaS within 2 years
cloud were negative or undecided 13%
Familiar with
and currently
‒ Concerned about performance using IaaS
9%
and reliability
N = 301 Source: Frost & Sullivan, 2011
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12. Agenda
Evolution of cloud computing
Platform as a Service: Next Hot Cloud
Uptake of cloud computing: The Reality
South African Cloud Computing Market
Data Centre Uptake: Virtualised Environment
Where is your Business?
12

13. In South Africa, the uptake of cloud computing is still in
the development phase
• Adoption rates in South Africa are
low Cloud Services Market: Market Cycle (South Africa), 2011
‒ Even though cloud dominates IT
discussions
‒ Simplicity in implementing the
technology and cost savings
Market Value
• IaaS is showing steady growth
‒ Understanding of the product IaaS
offering
‒ Visibly see the cost benefits on
P&L with reduction in SaaS
infrastructure spend
• SaaS is in development phase PaaS Time
‒ Niche players are building traction
Development Growth Maturity Decline
in the market
Source: Frost & Sullivan
• PaaS is new to the market but is
expected to rapidly increase over
next 5 years
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14. Key driver in South Africa has been the evolution of the
data centre environment
A combination of the on-premises and virtualised data centre allows companies to
retain its core services on-site and move non-critical offerings off-site
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15. Agenda
Evolution of cloud computing
Platform as a Service: Next Hot Cloud
Uptake of cloud computing: The Reality
South African Cloud Computing Market
Data Centre Uptake: Virtualised Environment
Where is your Business?
15

16. As traditional products mature, newer products are being
introduced
Data Centre Adoption Trends
Introduction Growth Maturity Decline
High
WAN
Web Hosting
DR
Managed
servers LAN
Hosted
Enterprise Basic
Hosting
Adoption Rate
Security
Remote
Hosted Backup
Managed
Backup
Cloud storage, virtual server and
desktop, remote backup and
hosted exchange are promising
Virtual
Server
service segments as traditional
product lines are maturing
SaaS
Cloud Virtual
Low storage Desktop
Source: Frost & Sullivan
Bubble size represents revenue/subscriber size of service area
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17. Virtualisation solutions and cloud-based services will
drive data centre revenues in future
Growth forecasts per product sector, 2010 – 2016
CAGR  Virtualisation solutions
Web-Hosting 8% are a key technology
Virtual server 13%
trend as they offer
SaaS uptake will be significant efficiencies
Virtual desktop driven by hosted 30%
exchange, CRM and UC and cost savings to
SaaS 23% companies of all sizes
Remote Backup 10%  As a result SaaS, virtual
desktop and virtual server
Managed Servers 8%
are expected to have the
LAN 2% highest growth rates to
Hosted Managed Back up 8% 2016
 The importance of core
Hosted Enterprise Security Cloud storage is a 10%
small sub-product services to overall data
of cloud-based
Disaster Recovery
services
5% centre revenues will
Cloud Storage 12% decline by 2016, as these
services also become
Basic Hosting 5%
2010 more commoditised
2016
0 200 400 600 800 1000
Source: Frost & Sullivan analysis
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18. Virtualisation at the heart of the cloud business model
Ease of
Cost avoidance Application Mobility
Implementation
Expand capacity at
High VM can be built in a
minimal cost, by
availability, "always matter of hours or
maximising the use
on" applications even less
of existing resources
Saves energy costs;
Frost & Sullivan
and, by decreasing
Easy to implement expects virtualised
the overall
business continuity offerings to overtake
footprint, avoids or
plans the uptake of
defers build out of
managed services
the data centre
Source: Frost & Sullivan analysis
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19. Expenditure on data centres can comprise as much as
85% of total ICT spend as for banks
Total spend per sector in the sample Average PC Number of potential PC’s
Access for desktop management
22%

78%

34%

66%
Retail and mining
represent
40%  opportunities for
60% virtualised desktops

45% 
55%

45% Financial services spend
55%
on data centres is
 high, but a large
44% proportion is in-house
56%
18%
 Data Centre Spend
ICT Spend
Proportion of staff
Note: Data is presented 82% With access to a PC
for the sample of 50 1 10 100 1000 Without access
companies selected in
conjunction with Telkom Log of Sum of Expenditure (ZAR Million))  = 4000 PC’s
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20. Security will always be a concern but the financial sector
consistently are looking for ways to cut costs
Key solutions for the financial sector
The safety of data is critical in the financial sector. Regulation
Managed Servers is a barrier to moving data off site, however. The management
of servers on site can be outsourced
Software as a Service (SaaS) allows the user to effectively rent
SaaS
the use of select software which saves on licensing fees
Virtualisation has been used as a means to reduce hardware
Virtualisation requirements within the financial sector. However, most
virtualisation has been restricted in house
Low Medium High
Barrier Barrier Barrier
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21. Most retailers continue to keep data centres in-
house, but larger retailers are considering virtualisation
Key solutions for retail sector
Connectivity is important in the retail sector as information
WAN
must be shared and consolidated from different branches
Many retailers choose to outsource data centre
Managed Servers management services and these are often lucrative
contracts
This includes virtual desktop, virtual server and cloud
Virtualisation
storage, and addresses cost sensitivities in the sector
Low Medium High
Barrier Barrier Barrier
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22. Due to the nature of the manufacturing sector, it is not
always conducive to build sophisticated data centres
Key solutions for the manufacturing sector
Manufacturing companies process large amounts of data
Basic Hosting and often have sites all across the country, the servers
need to be hosted in a satisfactory manner
Virtualisation is a popular adoption trend within the
Virtualisation manufacturing sector. Companies see the value in it and
are taking steps to prepare for it
Connectivity is essential for the manufacturing sector as
WAN
various branches are scattered around the country
Low Medium High
Barrier Barrier Barrier
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23. Agenda
Evolution of cloud computing
Platform as a Service: Next Hot Cloud
Uptake of cloud computing: The Reality
South African Cloud Computing Market
Data Centre Uptake: Virtualised Environment
Where is your Business?
23

24. ICT is an enabler, therefore the decision must match the
need required by the company
DYNAMIC INFRASTRUCTURE
Separate Consolidate Aggregate Automate Liberate
Enterprise
Self-Managing
Test & Development Server Consolidation Capacity On Demand Computing Clouds
Datacenters
On & Off Premise
Private
Public
Source: UN-Habitat, 2010, Frost & Sullivan analysis.
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25. Where is your Business on the Journey?
Hybrid
Public Cloud
Cloud
Private
Cloud
Automation Virtualisation
Consolidation
Source: Frost & Sullivan Analysis
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26. Youradditional information
For Contact For Additional Information
Chantel Lindeman
Business Unit Leader – ICT Africa
http://www.frost.com
Tel: +27 21 680 3205
Mobile: +27 82 555 3851
E mail: chantel.lindeman@frost.com
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