Boston Cloud Dinner/Discussion November 2010
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Transcript of Boston Cloud Dinner/Discussion November 2010
Outline
• Brief Background on the Cloud Research
• Cloud Computing Tsunami: The Wake-up Call?– Why cloud is a disruptive innovation and the next Wave in technology
• Complexity- and Confusion-as-a-Service: Unwrapping the Maze of Cloud Options– A working definition of the cloud
• Where’s the market today and where is it headed?
• Implications of cloud computing for customers and vendors (Business Value, Opportunities, Markets, Risks etc) – Infrastructure-as-a-Service– Platform-as-a-Service– Software-as-a-Service
1
Background on the Research Study
Leaders In The Cloud
Identifying the Business Value of Cloud Computing for Customers and Vendors
About Sand Hill Group
Investment and Advice
• Provider of investments and management advice to emerging enterprise technology leaders
Publishing
• SandHill.com Web site
• Software Pulse electronic newsletter delivered to over 12,500 executives each week
Research
• Producer of strategic reports about key enterprise software industry trends which aim to provide executives with meaningful, actionable insight into the critical issues they face
The business strategy destination for enterprise software executives
4
M.R. Rangaswami, Sand Hill Group, LLC, co-founder
• Held Global VP Marketing positions at Oracle and Baan• Strategic advisor to fast growth companies• Profiled on the front page of the Wall Street Journal• Named to Forbes “Midas 100” list as one of the most
influential investors in technolog
About the authors
5
About the authors
6
Kamesh Pemmaraju. Leading Cloud Research at Sand Hill Group
• Held Global VP Engineering/Director Quality at Pegasystems, Solidworks, Apani Networks
• Brought to market leading technology products in Enterprise BPM, 3D-CAD systems, Enterprise Security, High Transaction Websites, and Embedded Real-time
• Consulted at GE, GM, Siemens, Sun, Visa International, NASD, Motorola on technology, security, and quality issues
Industry-leading advisory board
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Tony Redshaw, CIO
Daru Darukhanvala, CTO
JP Rangaswami, Chief Scientist
James Barrese, VP Systems and Architecture
Michael Abbot, SVP Applications Software and Service
Gary S, Washington, Office of OMB
Survey of 511 IT execs with McKinsey and TechWeb
8
Title/Position Percent of Respondents
Board Member/CEO 14%
CIO/CTO 13%
Other C-level executive 6%
Senior IT executive 18%
Other senior executive 10%
IT manager 7%
Other manager 6%
Staff 6%
Consultant 15%
Other 5%
40 confidential interviews with cloud leaders
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Sector Companies ExecutivesHealthcare 1 1Insurance and Financial Services 3 4Publishing and Media 3 3Telecom 1 2Federal Government 3 6Technology 4 4Business and Software Services 3 3Software Vendors 8 8Electronics 1 1Manufacturing 2 2Energy 1 6Total 30 40
Cloud Computing Tsunami: The Wake-up
Call?
The Evolution of Cloud Computing
Cloud Computing is….
• A Game Changer• The Next Big Wave in IT• A Disruptive Technology
“An innovation that is disruptive allows a whole new population of consumers access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill.” – Clayton Christensen, The Innovator’s Dilemma
Mobile Phones + Google Apps: Poor Artisans in Remote Villages of India Sell their Folk Arts on eBay
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A whole new population of consumers…
14
Mainframes • Big iron• 1960’s,
1970’s
Client Server• Enterprise• 1970’
1980’s
Internet• Web 1.0,
1990’s• The PC
revolution
Mobile
2000’s
Cloud
Web 2.0
2000’s and beyond
Interconnected Devices + Anytime, Anywhere Internet Access +
Continuous Cloud-based Services
2 Billion Internet users5 Billion Mobile Phones
15
Levels the Playing Field for small companies
Represents a Competitive Threat to the Incumbents
Cloud Computing: The New Disruption
Business Drivers…
16
Agility, speed, flexibility The rise of Business Networks Collaboration Global Recession Global Commerce Simplicity Innovation
Agility: #1 driver for the move to the cloud
17
Don’t know
Part of a Green initiative
Disaster recovery and business continuity
Leverage core competencies and free IT resources to focus on innovation
Cost efficiency
Business agility
0% 10% 20% 30% 40% 50% 60%
1%
3%
13%
22%
46%
49%
Latest Study results..
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Complexity- and Confusion-as-a-Service:
Unwrapping the Maze of Cloud Options and definitions
Everyone has their own “cloud” definition
• The Cloud disruption is so large and touches so much of the industry, that people can only see the bit that affects them and hence they cast it in that light
• Vendor confuse terms and push their agendasTwitter Storm after Larry Ellison defines Oracle’s “cloud”
Litmus Test: If you have to buy hardware just to get started, it is not Cloud @Werner RT @benioff Beware of the false cloud
To get going, we will use a the following definition and debate later:
An rapidly scalable, elastic, cost-efficient IT capability (applications, platforms, and infrastructure) delivered as a service over a network in a pay-per-use, on-demand self-service manner.
NIST Definition Well Accepted
CommunityCloud
Private Cloud
Public Cloud
Hybrid Clouds
DeploymentModels
ServiceModels
EssentialCharacteristics
Common Characteristics
Software as a Service (SaaS)
Platform as a Service (PaaS)
Infrastructure as a Service (IaaS)
Resource Pooling
Broad Network Access Rapid Elasticity
Measured Service
On Demand Self-Service
Low Cost Software
Virtualization Service Orientation
Advanced Security
Homogeneity
Massive Scale Resilient Computing
Geographic Distribution
Source: NIST
And Controversies Abound….
22
Is private cloud a cloud?
Is virtualization a cloud initiative?
Is SaaS app a cloud app?
Where’s the market today?
What’s the outlook for the next 3 years?
Cloud Feels Like 1997 for the Internet
Large Potential Huge Market
HypeUncertainty
• New Technology
Analysts Forecast a healthy CAGR
When will the Tipping point occur?
Bold Predictions
“I think, in three years, the industry will get to 40 percent in the cloud. In five years and beyond, it could get to 70 percent.” – CIO, major software vendor
2014: A possible tipping point
Source: Saugatech Research, 2010
Cloud investments set to increase..
29
Today
3% IT Budget spend on Cloud
In Three Years
7% - 30% IT Budget expected spend on
cloud
Cloud Reality is Catching The Hype
30
Don’t know
No plans
Deploying mission-critical applications
Implementing and deploying non-critical applications
Implementing Pilot projects for Experimenting and testing
Watching and Learning
0% 10% 20% 30% 40% 50% 60%
2%
3%
18%
33%
52%
53%
“Compared to what we were doing before, the cloud is a giant bed of roses.” – CIO, business services company
Some SMB’s have 80% of services in the cloud
Implications for Customers and Vendors
Infrastructure: The Change
Assembly Line IT
Robotics Factory IT
35
Chief Informa-tion Officer (CIO), 30%
A committee of senior executives,
25%
Heads of business units, 14%
IT department, 27%
No one, 5%
Pendulum swinging back to the CIO and the IT department
• Developers using Public IaaS services under the Radar
• Business buying direct from Cloud vendors
• Governance, operational, expenses, and security issues
• CFO, CIO and IT under pressure to rationalize
SaaS evolution
Wave1: 2001-2006: Cost-effective Software Delivery– Single/Standalone/point solution: function-specific, entry-level
(CRM, Conferencing, Project Mgt, Collaboration etc)– Challenges: Business Bypassed IT, Governance/security
issues, Integration demands, Business Process Orchestration
Wave2: 2006:2010: Integrated Business solutions– New wave of integration products (Informatica, Pervasive,
Boomi (Now Dell), Cast Iron (now IBM)– Inter-SaaS Linking (Intaact & SalesForce Data transfer)– Opportunities: Web-Services based Integration API’s,
Customization by VAR’s and SI’s
SaaS evolution (contd..)
• Wave 3: 2008-2013: Workflow-enabled Business Transformation
• Business process and workflow orchestration with external cloud services (outside the firewall) and on-premise services
• Inter-Enterprise Collaboration
–Opportunities: (Cloudsourcing)• Cloud Integrators and BPM vendors for integrating business
workflows: Point solutions (e.g Appirio, Bluewolf) • Business Solution Providers can help provide holistic solutions
involving multiple external SaaS solutions (e.g NetSuite, SAP, Workday, SalesForce, Google) and integration with social Websites Facebook and Twitter
Source: Saugatuck Research, Strategic Perspectives, How Suite It Is – Five Points Along A Spectrum of Cloud Offerings
Workflow-based integration & CloudSourcing
Implications for Cloud Solution Providers
• Wave 3 is where is industry is headed. Customers of composite solutions expect:
• Vertical domain, web integration expertise and channel• Ongoing support of the WHOLE solution and quick turnaround
service times• Transparency of solution performance• Holistic SLA agreements (not just for one link in the chain)• Challenge: Weakest link
• Understand the customer’s legacy burden and provide secure hybrid architectural extensions to minimize disruption to installed base
39
Business Model Implications of SaaS
• Revenue model is very different • Up-front License model to recurring subscription model. • Slower GAAP Revenues
• Major Impact on Sales• Smaller deal sizes• Relationship vs transactional selling model
• Marketing Role change• Help reduce sales cycle• Lead Qualification more than Lead generation
• Channel Model change• High-value, business process, and implementation skills
• Operations• TCO , SLA, security, Infrastructure, Support is on you• Traditional packaged software vendors lack operations skills
40
Large/Small Company Perspectives
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Large Enterprises Small and Midsize Businesses
Implementing pilot projects 62% 46% Watching and learning 38% 49% Implementing and deploying noncritical applications
35% 34%
Deploying mission-critical applications
12% 25%
No plans 6% 4% Don’t know 0% 1%
“I firmly believe that my data is safer in [the cloud vendor’s] hands than it is in mine” – SMB CIO
What is PaaS?
• Services to develop, collaborate, integrate, test, deploy, host and maintain applications [ideally] in the same integrated development environment
• Ideal PaaS is built upon:– Infrastructure-as-a-Service Layer– Middleware layer (APIs’, run-time support, glue that cements
the different pieces)– Development Layer (tools, debuggers, IDE’s etc)
PaaS will be the future of cloud services
So while much of cloud computing’s success today comes from the simple metaphors we’ve used to describe it, we have to avoid being trapped by those metaphors. EC2 is not AWS; clouds are not machines. It’s the surrounding ecosystem that matters, and we ignore it at our peril – Alistair Croll
Platform Services help create an ecosystem for even greater innovations, simplicity, and cost efficiencies
PaaS Network Effect
PaaS is sweet spot
• The real value is in the Applications and Data• PaaS enables Cloud Development and
infrastructure abstraction further blurring the boundary between Infra and apps
• SaaS customers want extensions and configurability
• All Major Cloud Players “moving up the stack” (AWS, VMWare, Oracle, HP)
• IaaS will be commodity• Lock-in is a big concern for customer
But it’s still very early for PaaS
Workloads in the cloud
Innovation, skunk-work projects, new development, QA,
Load testing
Backup, Disaster Recovery,
Redundancy
Collaboration, CRM, HR, Office Productivity,
ERP, and Business Analytics (SaaS)
Characteristics: Spiky traffic patterns, self-
contained, virtualizable, scalable architecture
Public Vs Private
• Compelling economics of public cloud. On-demand capacity for workloads that are
• “Spiky”, seasonal, short-term, commodity, non-core applications
• Mission-critical apps have to stay in the datacenter
• Security, Compliance, and Control• Massive Investments in legacy Infrastructure • Long-term contracts for datacenter space and vendor
relationships• Cost of re-architecture and cloud migration
• No one-size fits all solution: Multiple cloud services to meet business, security, SLA needs
• Potential Risk: Weakest link48
Workloads For Hybrid Clouds
• Web-Serving Workloads: Many permutations– Scale the front-end web servers in the cloud, leave logic
processing and data-base in-house– Load balancers, CDN in-house. Rest in the Cloud – Run internally for normal loads, burst out for seasonal peak
demands
• Highly parallelized massive data analytics (MapReduce, Hadoop style processing) in the cloud and logic processing inside
• Hybrid Storage and Retrieval: Augment high-bandwidth on-premise storage with less frequently accessed Cloud storage. Backup, archival, DR. Single Management solution
Workloads For Hybrid Clouds – Contd..
• Development and QA– Multiple cloud environments for development, test, load,
stress, scalability, and build. Create and tear down only as needed
– Move from cloud to data center or vice versa at various stages of the Application Lifecycle Management (ALM).
• Hybrid workflows across SaaS applications and services and data inside the data center.– SaaS CRM application reaching out to an ERP system for
access to financial data.– Application running on public cloud accessing DNS on-
premise
• Collaboration infrastructure (Wiki’s, project boards etc)
Several customer concerns, but responsibility is shifting to the vendors
Does it make economic sense?
How will we handle security
and compliance?
How will we handle legal matters?
Is it mature, reliable, and
stable?
Once we’re in, how do we get out?
(portability)
How do we interoperate with
our existing “stuff”?
How will we manage the
cultural change and fear of job loss?
Do I have re-write everything?
Do we need new skills?
More Information, Assistance, and Offers
• Opinion Editorial on SandHill.com– http://sandhill.com/opinion/editorial.php?id=296
• Weekly Blog on cloud trends, vendors, customers, people, and solutions– http://sandhill.com/opinion/daily_blog.php?id=71
• Purchase Digital Enterprise License of research: Unlimited Internal Use:– http://sandhill.com/research/reports.php?id=3
• Additional Go-to-market and lead generation:– Customer webinars and events– Co-branded whitepapers, podcasts, and marketing collateral– Sales enablement and briefing sessions
52
Cloud Thought Leadership…
Research Industry Analysis, Blogs, Workshops, Strategy Consulting
Cloud Thought Leadership (contd…)
Conferences
WebinarsPodcasts
NewslettersOpinion Editorials
Events
Sample Research Customers and Consulting Clients
55
©2009 Ness Technologies – Proprietary and Confidential
November 2010Boston
Achieving Technology Leadership in the Cloud
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NIST (National Institute of Standards and Technology) defines cloud computing as a "a pay-per-use model for enabling available, convenient, on-demand network access to a shared pool of configurable computing resources — for example, networks, servers, storage, applications, services — that can be rapidly provisioned and released with minimal management effort or service provider interaction".
Cloud Computing Defined
59
www.ness.com
It’s Very Cloudy Out There
60
Private Cloud
Performance
Quality of Service
SaaSPlatform Cloud
ROI
Infrastructure
Security
Hybrid Cloud
Cloud Broker
QA Cloud Cloud Services
IntegrationSLAsArchitecture
Global Delivery
Disaster Management
Regulatory Compliance
Internationalization
Data Clouds
Governance
Monitoring
Virtualization
Open SourceData Management
www.ness.com
Options, Options, Options
61
www.ness.com
Ness Cloud Assessment Clears the Air
Action Plan and Success Criteria
Cloud Strategy with Projected ROI
Current Arch. / Technology
Market Climate
Business Objectives
www.ness.com
State of the Public Cloud: The Cloud Adopters' PerspectiveOctober 2010 Appirio study focused on existing cloud adopters
63http://thecloud.appirio.com/StateofthePublicCloudWhitepaperThanks1.html
While basic challenges like security and manageability remain at the top of the list, new challenges around cloud-to-cloud integration, SaaS silos and mobile access are also a priority.
• 75%+ say cloud-to-cloud integration and better mobile access are important priorities (more than 80% still say security and manageability are priorities)
• 65% say enhancing existing cloud apps is a high or essential relative priority
• Only 4% have fully integrated their cloud applications with each other
www.ness.com
What kind of technology does your product use? Java, C++, J2EE, .Net?► Application Server, DB, 3rd Party Components, Open Source, Etc
► Tell us about the commercial products that you use to build your product? (what license fees do you pay??)
What kind of architecture does your product have – 2 tier, n tier?► SOA
► Multi-tenant support
► International support (Unicode, multi-currency)
Security / regulatory requirements? http://www.cloudsecurityalliance.org/csaguide.pdf
► Geographic distribution requirements?
Performance / SLA requirements?
Integration needs – cloud to cloud, cloud to client, hybrid cloud?
Implementation requirements?
Competitive environment and customer expectations
Technology acquisition strategy
Some Critical Cloud ConsiderationsWhere to Begin
64
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Ness Cloud Assessment Summary
Cloud computing offers significant tangible benefits*► ROI – Clients report 50% - 200% reduced costs
► Speed – Deliver applications in weeks, not months
► Innovation – Quickly design, develop and deploy many applications. • Low investment makes it easy to walk away from failing efforts
Significant considerations► What do you need / want from the cloud?
► Business risk in moving / not moving to the Cloud
► Current technology position to achieve objectives
► Resources available to achieve objectives
Next Steps► Leverage Ness Cloud Readiness Assessment
► Meet with Ness Strategic Consulting• Determine scope
• Identify stakeholders
• Conduct Assessment and create plan of action
*Courtesy of Sandhill Inc 2010
Q & A
66
Thank You