March 22, 2011 Market Overview: Cloud-Based Vendors

Transcription

1 Market Overview: Cloud-Based Vendors by Christopher Voce for Infrastructure & Operations Professionals Making Leaders Successful Every Day

2 Market Overview: Cloud-Based Vendors A Look At The Players And The Criteria You Should Use To Differentiate Them by Christopher Voce with Robert Whiteley, Ted Schadler, and Lindsey Kempton Executive Summary Infrastructure and operations executives have shown a tremendous interest in the cloud to provision and collaboration services to their employees. Why? Cloud-based and collaboration can be more cost-effective, increase your flexibility, and help control the historical business and technical challenges of deploying these tools yourself. Forrester recently published a report covering four major cloud platforms. But I&O professionals need to expand their scope to include third-party service providers. To do so, focus on three categories of criteria: the service catalog, operational details, and market characteristics. From there, I&O teams can determine the best technical and business fit from among the four groups of cloud-based vendors. table of Contents 2 Interest In Cloud-Based Is Growing Rapidly 3 Three Categories Of Criteria Help Differentiate The Providers The Provider s Service Catalog Determines Where It Can Help The Provider s Operational Details Determine How Well It Can Integrate Market Characteristics Determine If The Provider Is A Fit For Your Business 7 Cloud-Based Vendors Fall Into Four Groups Competition Will Heat Up As Everyone Attacks The Platform Players Dominance recommendations 14 Take These Steps To Build The Right Cloud Plan 15 Supplemental Material NOTES & RESOURCES Forrester interviewed 15 vendors and spoke with hundreds of end user companies via inquiry and consulting engagements. Related Research Documents Learn From Those Who Have Made The Leap To Cloud-Based Four Giants Compete For Your Cloud Business August 13, 2010 Tier Your Workforce To Save Money With Cloud- Based Corporate August 13, 2009 Should Your Live In The Cloud? An Infrastructure And Operations Analysis January 5, Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, TechRankings, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective owners. Reproduction or sharing of this content in any form without prior written permission is strictly prohibited. To purchase reprints of this document, please clientsupport@ forrester.com. For additional reproduction and usage information, see Forrester s Citation Policy located at Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.

3 2 Market Overview: Cloud-Based Vendors IntereST in cloud-based is growing rapidly Since we began our Should Your Live In The Cloud? series of documents, Forrester s infrastructure and operations (I&O) clients have shown a tremendous interest in how cloud-based services affect and collaboration service provisioning. 1 It s certainly not just an SMB trend anymore either organizations of all sizes show interest. One question that comes up often is How real is this trend? On the surface, the answer is simple: It s real. AT&T, Google, IBM, Microsoft, Verizon, and VMware are making heavy investments in cloud . That many major players just don t throw billions of dollars at a fad. To understand why vendors are making these investments, it s important to note that companies are increasing investments in collaboration tools (see Figure 1). Our research shows there can be significant strategic and cost benefits for enterprises that can make the leap. 2 Of course, a move to a cloud or hosted service is not for every organization out there, and the decision requires significant internal investigation. 3 Organizations seeking help from the cloud are looking to: Trim upfront and ongoing costs. isn t cheap, and it s only getting worse for most companies as business and technical factors combine to drive costs higher and higher. Employees are demanding larger inboxes as sending larger files becomes more commonplace. Regulation and litigation drive investments in archiving and ediscovery platforms. Increasing use of mobile devices to access also drives investments to manage access. Cloud-based providers have practically untouchable economies of skill and scale that translate into attractive pricing for companies spending far more than they d like on today. Free up resources for strategic initiatives and increase flexibility. Running your own platform better than your competitor isn t going to send quarterly profits sailing, but providing employees with the secure, scalable tools they need to better serve customers and win new ones can. Forrester s book Empowered outlines how equipping highly effective and resourceful operatives (HEROes) with cloud services empowers these employees to solve customer challenges. 4 In a recent Forrester survey, when asked what their motivation was for investing in managed services for telecommunications, interviewees cited refocusing on the business rather than pure cost savings for the first time in years. 5 Have quicker and easier access to new features and services. The complexity of upgrading your existing platform can be daunting, disruptive, and expensive. Yet employees are looking for newer features and capabilities in the tools they use to get their job done. In a cloud world, the majority of the upgrade burden shifts to the service provider, who must keep customers current on their software. 2011, Forrester Research, Inc. Reproduction Prohibited

4 Market Overview: Cloud-Based Vendors 3 Figure 1 Companies Continue To Prioritize Collaboration How important is improving collaboration and information exchange to your internal IT organization when making software decisions? Not at all important 2% Slightly important 11% Somewhat important 26% Important 36% Very important 24% Don t know 1% Base: 1,900 decision-makers at North American and European enterprises and small businesses Source: Enterprise And SMB Software Survey, North America And Europe, Q Source: Forrester Research, Inc. Three Categories of criteria help differentiate the providers This market overview focuses on vendors that can host mailboxes along with other services, although there are several providers that can help offload responsibility for filtering, archiving, and disaster recovery. 6 Previously, we looked at four core platforms Cisco, Google, IBM, and Microsoft but they re not the only vendors you should consider to deliver and its associated services. 7 There are several other larger third-party hosting companies and telecoms that offer hosted platforms from IBM Lotus, Microsoft, and others that can be a better fit for your business. Why? Because the platform vendors themselves may be able to serve a broad base, but they can t cater to every industry, geography, and company size. With the myriad of players in the market, how do you determine which is best for your organization? 8 Of course, cost is always going to be a top concern and should be part of your evaluation. We have grouped the additional factors into three categories: service catalog, operational details, and market characteristics. The Provider s Service Catalog Determines Where It Can Help Determining the right vendor for you depends on the breadth of its offering and if that offering meets your current and future needs. Many companies aren t looking at moving just their ; they re considering other collaboration applications and services, such as team workspaces, that are required to support them in their environments (see Figure 2). Because of the integration between , business applications, supporting services, and other collaboration tools, there can be significant cost savings when they re bundled together. Thus, from a service catalog perspective, the core criteria include: 2011, Forrester Research, Inc. Reproduction Prohibited

5 4 Market Overview: Cloud-Based Vendors platform. This is the staple of any service, but it s not necessarily as clear-cut as it might seem. Price and mailbox size are usually the two biggest elements to focus on, but there s more to consider. A provider may offer just one tier of service based on mailbox size, while others may offer multiple mailbox size options. Multiple price points allow you to tier your workforce so that you can tailor the offering for your company. 9 In addition, whether or not the vendor provides dedicated infrastructure or a multitenant service affects your performance and reliability. Supporting services. These services include archiving and ediscovery, filtering, and disaster recovery. Your organization s broader archiving and ediscovery needs can heavily influence your decisions. may be but one data type that is discoverable, so whatever the solution is, it has to fit in with your broader compliance initiatives. Supporting services are often resold solutions from focused providers like Iron Mountain or LiveOffice. Mobile options. BlackBerry support for executives used to be sufficient. But now mobile options are exploding as iphones, ipads, Windows Phone 7, and Android-based devices increase in popularity and the number of employees using them expands. BlackBerry support has been a pricey option to date, usually hovering around $10 per employee per month, but RIM has been working with providers to help drive down these costs. 10 Picking a vendor that fits into your short- and long-term mobile strategy requires doing a mobile needs assessment. 11 Additional collaboration tools. You should consider team workspaces, instant messaging, and other collaboration tools along with . Instant messaging and presence is becoming an increasingly important component of collaboration, as it helps set the right context for how two employees should communicate. Unified communications and Web conferencing integration may also be a high priority for you. If you re working with a mix of on-premises and cloudbased tools, you ll have to investigate whether or not there are compatibility issues. Bottom line: You need to weave together a cohesive collaboration strategy , Forrester Research, Inc. Reproduction Prohibited

6 Market Overview: Cloud-Based Vendors 5 Figure 2 Is Nearly Ubiquitous, But Other Tools Are Increasingly Common What percentage of your firm s employees use each of the following collaboration tools for work purposes? 83% Employee portal 46% Audioconferencing 33% Instant messaging 28% Team workspaces Videoconferencing Web conferencing 22% 22% 20% Social networks Wikis 12% 11% Blogs 7% Base: 483 decision-makers at North American and European enterprises Source: Enterprise And SMB Software Survey, North America And Europe, Q Source: Forrester Research, Inc. The Provider s Operational Details Determine How Well It Can Integrate In addition to the scope of the services a provider offers, there s a set of criteria that exposes how well potential providers can fit into your operations. Forrester refers to these as the operational details of a provider. These considerations determine whether a vendor can meet technical and business requirements your company might have. Providers need to demonstrate that they can integrate with your existing applications and meet the bar for your security requirements. The operational characteristics to focus on include: Data center locations. The location of a provider s data centers can have both technical and regulatory implications for your company. It s important to note that although a provider may have data centers in regions around the world, it might only be able to host the entire organization s mailboxes from one location. Integration methods. Your employees aren t the only ones who use ; some of your CRM, finance, HR, and other applications also leverage your mail servers to send messages. Some of these applications might use proprietary integration methods like MAPI to talk to the mail servers. Providers vary on what protocols and methods they expose to customers. In addition, you ll need to investigate how the provider integrates with your enterprise directories. 2011, Forrester Research, Inc. Reproduction Prohibited

7 6 Market Overview: Cloud-Based Vendors Security certifications. Security rises to the top as one of the, if not the, top concerns of companies looking to shift responsibilities to their providers. Certifications like SAS 70 v2 certify a provider s operations to a standard. SAS 70 v2 is being replaced by SSAE 16, so it s important to ask candidates about their plans to meet this new certification. 13 Also, vendors vary on what other regulatory standards they meet, like the Federal Information Security Management Act (FISMA) or the Health Insurance Portability and Accountability Act (HIPAA). Service-level agreements. Most providers offer 99.9% uptime. Make sure you understand what constitutes downtime and how much notice you re given before service windows, which are typically excluded from the uptime SLA. But uptime is just a starting point. You ll also need to find out what the recovery point and recovery time objectives are. To do so, focus on additional elements like support SLAs that define the window for a support response. 14 Migration services. The effort required to perform the migration may exceed what your staff has the time or the experience to handle. Some vendors have their own professional services, and others rely on partners to assist. Either way, I&O teams will want to push prospective vendors for relevant experience with customers of their size and complexity. Market Characteristics Determine If The Provider Is A Fit For Your Business The last category of criteria is market characteristics, which point to the kinds of customers a vendor is tooled to serve effectively. Not many companies are comfortable being the first to adopt a solution, nor are they happy to be a provider s largest or smallest customer. Some of the elements to focus on include: Company history. Newer entrants have a learning curve. When Google first entered the corporate market, customers initially wondered whether Google would understand how to support an enterprise customer. In addition to history, it s important to focus on where the provider will continue to take their offering. Customer footprint. Most vendors will claim a global customer base but might not have local data centers. The result? Employees experiences may vary. Slowdowns when sending large attachments and sharing free/busy calendaring are two of the more common issues. Don t be shy about asking how they plan on scaling to meet their growing customer base either. Target market. Vendors are often optimized to meet just one organization size or industry. Focusing on a vendor s target market, you ll want to answer questions like: Is my business too small to get the attention my environment requires? ; Is my company so large that I ll test the limits of what the vendor can manage and offer support for? ; or Do they understand my industry? 2011, Forrester Research, Inc. Reproduction Prohibited

8 Market Overview: Cloud-Based Vendors 7 Cloud-based vendors FALL INTO Four groups There s no shortage of vendors that provide cloud , and these providers come from very different backgrounds (see Figure 3). Forrester sees them falling into four high-level groups: Incumbent platform vendors: Microsoft, IBM/Lotus, and VMware/Zimbra. Microsoft and IBM have long histories of offering their products as on-premises solutions and continue to offer both. Microsoft owns the majority of the market today. Microsoft s Exchange Online is often paired with some components in its Business Productivity Online Suite (BPOS), and the soon-to-be-released Office It offers Exchange Online in two different fashions: standard a multitenant offering for companies of all sizes, and dedicated a single-tenant offering for customers with more than 5,000 seats and requirements that prevent them from using the multitenant offering. IBM initially offered a dedicated infrastructure solution with LotusLive Notes in 2008 and followed with a multitenant version in August IBM released LotusLive inotes in early 2010, which is based on the platform it received from the Outblaze acquisition. VMware entered the fray when it acquired Zimbra from Yahoo and offers Zimbra via its partners. Newer cloud pure plays: Google and Cisco. These vendors don t offer products that can be deployed on-premises today. In a relatively short time, Google grew its successful ad-supported consumer platform into an ad-free enterprise product. Doubts that Google is serious about the enterprise are fading as the company continues to win new customers and enhance its offering. Google sets itself apart by also including its hosted office authoring tools in its package. Cisco briefly entered the market in 2009 with its 2008 PostPath acquisition but recently ceased development to focus on the remaining pieces of its collaboration portfolio. 16 Collaboration service providers: Apptix, Intermedia, and USA.NET. Why not go directly to Microsoft and other platform providers? They just might not be a good fit for your company. As mentioned, Microsoft offers two flavors of Exchange Online: standard and dedicated. The dedicated version is only offered to companies with more than 5,000 seats, but technical integration or regulatory requirements might dictate greater segmentation or control than Microsoft can offer smaller companies looking to deploy Exchange. That s where collaboration service providers step in. They are experts at running and tailoring Exchange and other and collaboration services for customers. Other significant vendors in this category targeting companies of all sizes include CenterBeam, which provides sophisticated integration with Active Directory, and Ceryx. 2011, Forrester Research, Inc. Reproduction Prohibited

9 8 Market Overview: Cloud-Based Vendors Diversified hosting and telecoms: several providers. These include AT&T, Connectria, NaviSite, Rackspace, Verio, and Verizon. These larger telecommunications and hosting companies carry benefits and considerations similar to the collaboration service providers, but they offer a wider variety of services and often have a broader data center footprint for global customers. As mentioned, VMware has also positioned Zimbra to be an appliance offered by its vcloud partners. Many companies often overlook the collaboration service providers and diversified hosting and telecoms that can offer the flexibility and control they might need. Most provide Microsoft Exchange as their core offering, and others offer IBM Lotus Notes and Domino as well. 2011, Forrester Research, Inc. Reproduction Prohibited

10 Market Overview: Cloud-Based Vendors 9 Figure 3 Comparing Today s Cloud Providers Service catalog platform(s) supported Mailbox size limit Dedicated or multitenant deployment Archiving services ( and other services) DR and continuity services Filtering (antispam, antivirus) Team site/workspace Instant messaging Mobile device support Operational details Data center locations (number, if disclosed) Integrates with your affiliated applications SAS 70 Type II compliant? Uptime SLA Migration services Market characteristics Years in -hosting business Target market (enterprise: 5,000+; midmarket: 1,000-5,000; SMB: <1,000) Regional focus Largest corporate customer (by number of mailboxes) Apptix Microsoft Exchange 5 Gb Microsoft SharePoint Microsoft Office Communication Server BlackBerry, ActiveSync, Palm AT&T Microsoft Exchange 5Gb Dedicated Microsoft SharePoint Microsoft Office Communication Server BlackBerry, ActiveSync, Palm US (5) (38) 100% 99.9% standard, customizable SMB, midmarket,, enterprise US, EMEA Enterprise 100,000+ Cannot disclose, more than 20,000 Connectria IBM Lotus Notes, Microsoft Exchange, VMware/Zimbra Vendor does not disclose Microsoft SharePoint, IBM LotusLive Connections Microsoft OCS and IBM Lotus Sametime BlackBerry, ActiveSync US (3) Varies per customer requirements, through partners 14 SMB, midmarket, enterprise 12,000 Source: Forrester Research, Inc. 2011, Forrester Research, Inc. Reproduction Prohibited

11 10 Market Overview: Cloud-Based Vendors Figure 3 Comparing Today s Cloud Providers (Cont.) Service catalog platform(s) supported Google Google Apps for Business IBM/Lotus LotusLive Notes, LotusLive inotes Intermedia Microsoft Exchange Mailbox size limit Dedicated or multitenant deployment Archiving services ( and other services) DR and continuity services 25 Gb Multitenant 25 Gb 25 Gb Filtering (antispam, antivirus) Team site/workspace Instant messaging Mobile device support Google Apps for Business Google Sites Google Apps for Business Google On-premises BlackBerry support through a connector; ActiveSync devices, Android LotusLive Connections Lotus Sametime Blackberry, ActiveSync Microsoft Windows SharePoint Services (WSS) Microsoft Office Communication Server BlackBerry, ActiveSync, Palm Operational details Data center locations (number, if disclosed) ( dozens ) (40) US (4) UK (1) Integrates with your affiliated applications, via Gears SAS 70 Type II compliant? Uptime SLA 99.9% 99.9% % Migration services Market characteristics Years in -hosting business, through partners Target market (enterprise: 5,000+; midmarket: 1,000-5,000; SMB: <1,000) SMB, midmarket, enterprise SMB, midmarket, enterprise SMB Regional focus Largest corporate customer (by number of mailboxes) 30,000 Does not disclose, more than 100,000 2, Source: Forrester Research, Inc. 2011, Forrester Research, Inc. Reproduction Prohibited

12 Market Overview: Cloud-Based Vendors 11 Figure 3 Comparing Today s Cloud Providers (Cont.) Microsoft Navisite Rackspace Service catalog platform(s) supported Microsoft Exchange IBM Lotus Notes, Microsoft Exchange Microsoft Exchange, Rackspace Mailbox size limit 25 Gb 4 Gb 2 Gb and 10 Gb Dedicated or multitenant deployment Archiving services ( and other services) DR and continuity services Filtering (antispam, antivirus) Team site/workspace Microsoft SharePoint Microsoft SharePoint, IBM Lotus Quickr Microsoft SharePoint Instant messaging Microsoft Lync Microsoft OCS and IBM Lotus Sametime None Mobile device support BlackBerry, ActiveSync BlackBerry, ActiveSync, Palm, LotusConnect BlackBerry, ActiveSync, iphone Operational details Data center locations (number, if disclosed) (16) US (3) Integrates with your affiliated applications SAS 70 Type II compliant? Uptime SLA 99.9% Varies per customer requirements 100% Migration services Market characteristics, via Microsoft and partners Years in -hosting business Target market (enterprise: 5,000+; midmarket: 1,000-5,000; SMB: <1,000) SMB, midmarket, enterprise Midmarket, enterprise SMB Regional focus Largest corporate customer (by number of mailboxes) 100, ,000 US and Europe 20, Source: Forrester Research, Inc. 2011, Forrester Research, Inc. Reproduction Prohibited

13 12 Market Overview: Cloud-Based Vendors Figure 3 Comparing Today s Cloud Providers (Cont.) Service catalog platform(s) supported Mailbox size limit Dedicated or multitenant deployment Archiving services ( and other services) DR and continuity services Filtering (antispam, antivirus) Team site/wsorkspace Instant messaging Mobile device support Operational details Data center locations (number, if disclosed) Integrates with your affiliated applications SAS 70 Type II compliant? Uptime SLA Migration services Market characteristics Years in -hosting business Target market (enterprise: 5,000+; midmarket: 1,000-5,000; SMB: <1,000) Regional focus Largest corporate customer (by number of mailboxes) USA.NET Verio Microsoft Exchange Microsoft Exchange, VMware/Zimbra Vendor does not disclose 2 Gb Microsoft SharePoint None Microsoft OCS None BlackBerry, ActiveSync BlackBerry, ActiveSync US, APAC (5) North America, Europe, Asia Pacific 100% 99.9% SMB, midmarket, enterprise SMB 300,000+ Vendor does not disclose Source: Forrester Research, Inc. 2011, Forrester Research, Inc. Reproduction Prohibited

14 Market Overview: Cloud-Based Vendors 13 Figure 3 Comparing Today s Cloud Providers (Cont.) Service catalog platform(s) supported Mailbox size limit Dedicated or multitenant deployment Archiving services ( and other services) DR and continuity services Filtering (antispam, antivirus) Team site/workspace Instant messaging Mobile device support Operational details Data center locations (number, if disclosed) Integrates with your affiliated applications SAS 70 Type II compliant? Uptime SLA Migration services Market characteristics Years in -hosting business Target market (enterprise: 5,000+; midmarket: 1,000-5,000; SMB: <1,000) Regional focus Largest corporate customer (by number of mailboxes) Verizon Microsoft Exchange, Google Apps (reseller for SMBs/midmarket) 25Gb Microsoft SharePoint Microsoft OCS BlackBerry, ActiveSync Operates in 200 global data centers 99.9% standard, customizable VMware/Zimbra Zimbra hosted and via vsphere hosting partners Varies by partner Zimbra Zimbra BlackBerry, ActiveSync (varies by partner) Partners available globally, offers Zimlets Vary per provider, and via partners 10 6 Midmarket, enterprise SMB, midmarket 30, ,000 + Source: Forrester Research, Inc. 2011, Forrester Research, Inc. Reproduction Prohibited

15 14 Market Overview: Cloud-Based Vendors Competition Will Heat Up As Everyone Attacks The Platform Players Dominance Out of these players, who s going to win? As we ve previously said, it s still early in the game. 17 Microsoft s Exchange platform is a formidable force, whether it s delivered on-premises by Microsoft or by one of its partners. Google has made some high-profile wins and always seems to be in the conversation. IBM will fight hard at keeping its existing customers and going after new business. The other third-party telecoms, hosting companies, and providers will continually have to go after these platform vendors and expand their existing customer relationships with value-added and collaboration. Their biggest threat comes from the platform vendors themselves as they continue to enhance their own hosted variants. Cisco faced an uphill battle against the other established players, and its vision for its future collaboration and communication solutions no longer includes homegrown . It will build off its success with IP telephony, telepresence, and WebEx and attempt to extend into newer areas where it feels it can differentiate, and it will integrate with other mail platforms. Recommendations Take These Steps to Build the Right Cloud Plan There are many factors that point to the skyrocketing interest and deployment of cloud-based not the least of which was a down economy that forced the need for thrifty thinking. Whatever the reasons, this is a complex system that has many moving parts. Cloud-based is real but by no means a simple decision. To wade your way through, Forrester recommends that you: Assess your workforce needs, app and business integration requirements, and costs. We ve discussed the evaluation process in earlier research, and it s important to note that you can glean valuable information from the process, even if your company isn t looking to push to the cloud right now. 18 The exercise will illuminate what aspects about the cloud aren t ready today so that you can make the move when vendors have cleared the hurdles currently in your way. You ll also learn how to optimize provisioning for the organization, such as tiering your employees. This ensures they get exactly what they need without overprovisioning software and storage. Look within your existing relationships for help. Your existing relationships with vendors are often the best place to start. Do you have a broader relationship with a hosting company? It might be able to cut you a better deal based on your overall relationship, and you won t have to expand your provider portfolio and manage yet another vendor relationship. Time a move with an upgrade. If you ve recently upgraded your platform, there s little fiscal sense in making an investment in a migration to the cloud. Wait for a time when you would have to make a capital investment in an upgrade or platform migration. 2011, Forrester Research, Inc. Reproduction Prohibited

16 Market Overview: Cloud-Based Vendors 15 Explore a split-domain hybrid option, combining on-premises and cloud-based . The cloud might offer you the opportunity to provision to people who don t currently have mailboxes. Two good examples include: 1) insurance companies extending accounts to agents who depended on their own accounts previously, and 2) manufacturing companies looking to cut costs and improve communication with employees without corporate for things like HR communications and work scheduling. Microsoft offers the Deskless Worker plan, and companies like USA.NET and Rackspace offer cheaper mail platforms that they can combine with their Exchange offering to help customers tier service to their users offering cheap mailboxes that meet the more modest needs of part of their company. IBM also offers the ability to extend their on-premises environment into the cloud as part of their current offering. Consider carving out supporting services instead. The cloud isn t ready for everyone s mailboxes. Integration requirements as well as security or regulatory issues can make you shy away from throwing it all over the wall now but that doesn t mean you can t take advantage of cloud-based providers like LiveOffice, Mimecast, Iron Mountain, Dell MessageOne, and Symantec that offer filtering, archiving, and ediscovery. Even productized disaster recovery offerings can be attractive alternatives to doing it yourself. Companies like Azaleos can also offload management and support of your Exchange environment, giving you some of the benefits of the cloud. It also works with companies like Verizon to deliver this same service in a hosted environment. Expand the membership of the evaluation team. The implications of transitioning to the cloud reach farther than infrastructure and operations. Your content and collaboration colleagues will integrate the cloud service into their information workplace plans, help with employee change management, and assist choosing the right vendor based on the service catalog. Sourcing professionals can weigh in on how to construct a best-fit relationship for your company with the provider and how this affects your broader licensing relationship with companies like Microsoft and IBM. Application owners that integrate with your platform will have to examine the required change management or implications of a shift. Even finance might need to be involved if your organization has been traditionally geared toward capital expenditure (capex) rather than operating expenditure (opex). Forrester s book Empowered also outlines how to build a HERO compact between business, IT, and your empowered employees. Consider tapping this cross-functional team to vet cloud for customer-facing business functions. 19 Supplemental MATERIAL Companies Interviewed For This Document Apptix AT&T BT Cisco Connectria Google 2011, Forrester Research, Inc. Reproduction Prohibited

17 16 Market Overview: Cloud-Based Vendors IBM/Lotus Intermedia LiveOffice Microsoft USA.NET Verio Verizon VMware/Zimbra NaviSite Endnotes 1 Interest in cloud-based is rapidly rising. The promise of reducing operational costs and refocusing on their core competencies has many Forrester customers asking about the cloud. Cloud-based services like those of Google and Microsoft are more than just an SMB solution large organizations like GlaxoSmithKline are moving essential services to the cloud. In the past year, Forrester has fielded more than 100 inquiries about the impact of the cloud on and collaboration. See the July 31, 2009, Inquiry Spotlight: Cloud-Based , Q report. 2 While firms with fewer than 15,000 employees can almost always save money by moving all mailboxes to the cloud, every firm can save money by moving their occasional users workers that can get away with a web-based client to a cloud-based provider. How much money? For these occasional users, as much as $63 per user per year. See the August 13, 2009, Tier Your Workforce To Save Money With Cloud-Based Corporate report. 3 The process of choosing the right architecture for your organization starts with a discovery project to better understand the opportunities, risks, and implications of making a change. There is a large ecosystem of partners that can help. But before you start, you have to roll up your sleeves to do a detailed risk and impact analysis lest you come across a surprise that blows up your migration effort. See the January 5, 2009, Should Your Live In The Cloud? An Infrastructure And Operations Analysis report. 4 Source: Josh Bernoff and Ted Schadler, Empowered: Unleash Your Employees, Energize Your Customers, Transform Your Business, Harvard Business Review Press, 2010 ( 5 Unlike in past years, the top reason isn t cost savings although it is still high on the list. Instead, firms are opting for managed services to enable them to focus on their core business competencies not just keeping the network running. See the August 7, 2009, The State Of Enterprise Networks And Telecommunications: 2009 report. 6 Supporting services can take up more space, power, and resources than they need to. Traditional onpremises software vendors like Trend Micro are taking their solutions and offering them as a service. While circumstances such as a broader corporate strategy involving an archiving service might limit options, there is a clear opportunity for many to offload the cost and responsibility associated with filtering, archiving, and disaster recover. See the January 5, 2009, Should Your Live In The Cloud? A Comparative Cost Analysis report. 7 Where was once a sleepy market for Microsoft, IBM, Novell, and a long tail of alternatives, it is now a tumultuous battleground for the big three collaboration vendors: Google, IBM, and Microsoft, with Cisco recently having exited the market. See the August 13, 2010, Four Giants Compete For Your Cloud Business report. 2011, Forrester Research, Inc. Reproduction Prohibited

18 Market Overview: Cloud-Based Vendors 17 8 Infrastructure and operations chiefs at companies large and small are beginning to entrust their to Google, IBM, Microsoft, and other hosters. Migrating this important resource to the cloud is a big step, and it s not always an easy journey. With a few years of migration experience now under the market s belt, best practices and pitfalls begin to show themselves. To ease the pain of your migration, follow best practices such as cleaning up your Active Directory environment prior to the migration and assembling a diverse pilot group. See the, Learn From Those Who Have Made The Leap To Cloud-Based report. 9 Forrester has begun surveying information workers to help firms benchmark their own employees technology adoption and satisfaction. This work has led us to make three suggestions on how best to tier your workforce. See the August 13, 2009, Tier Your Workforce To Save Money With Cloud-Based Corporate report. 10 Until it exited the market, Cisco offered BlackBerry support for $1 per month, per employee. 11 Progressive firms are conducting workforce technology needs assessments as the first step among other technology initiatives in defining their next-generation mobile computing strategy. This fact-based segmentation initiative helps firms understand which workforce technologies map to which user segments. See the October 28, 2010, The Mobile Operating System Wars Escalate report. 12 To get work done, distributed and B2B teams need real-time collaboration tools that replicate the power and experience of face-to-face meetings and support pervasive interactions. Fortunately, real-time tools are getting better. Presence shows team members context; instant messaging (IM) moves the dialog to mobile devices; Web conferencing allows video and document sharing; and telepresence delivers facetime quality. For an IT shop weary of installing yet another software application, it s important to see that real-time collaboration can and sometimes should be delivered with a cloud-based service. See the September 4, 2008, Distributed Teams Need Real-Time Collaboration Tools report. 13 More detail can be found on the American Institute of Certified Public Accountants website: aicpa.org/interestareas/accountingandauditing/resources/soc/pages/users.aspx. 14 Firms should find out where their SaaS solution is hosted, where and how it is backed up. They should ask their provider about recovery time objective (RTO) the time to get data back after a failure and recovery point objective (RPO) time between backups, which translates into risk of data loss. Firms should also find out if there are partners that can offer additional backup and recovery options if they are not satisfied with what their provider offers. See the February 22, 2010, SaaS Valuation Criteria report. 15 As part of an upcoming upgrade to its online offering, Microsoft is also rebranding its Business Productivity Online Suite (BPOS) as Office 365. Office 365 is currently in beta at the publishing of this report. The Office 365 suite includes updated cloud-based versions of Microsoft Exchange, SharePoint, and Office Communications Server (recently renamed Lync ). It will add Office web apps as well as a subscription to Office Pro Plus for certain plans. 16 Prior to the publishing of this report, Cisco announced it is exiting the cloud-based market to focus on its broader communication and collaboration portfolio. was just one prong of Cisco s collaboration platform strategy, which includes WebEx conferencing, instant messaging, telepresence, social 2011, Forrester Research, Inc. Reproduction Prohibited

19 18 Market Overview: Cloud-Based Vendors software, and video streaming. Forrester believes Cisco will look to integrate with and wrap its solutions around its former competitors platforms. Infrastructure and operations professionals must work with their content and collaboration colleagues to determine if their solutions meet the needs of the workforce and how they ll integrate with corporate and other applications. Source: Christopher Voce, Cisco Sends A Recall On Its Cloud Strategy, Christopher Voce s Blog, February 23, 2011 ( forrester.com/christopher_voce/ cisco_sends_a_recall_on_its_cloud_ _strategy). 17 Already there is a battle raging to win your business. You will win as vendors compete on price, features, innovation, bundles, and service. But for vendors, it will be a tough five years as companies pick a messaging and collaboration partner for the next decade. It s a little early to make the call on the endgame for the cloud and collaboration market, but we will make a few predictions even at this early stage. See the August 13, 2010, Four Giants Compete For Your Cloud Business report. 18 After performing an impact analysis, you may run into organizational resistance to moving off-premises. Google, IBM, Microsoft, and other vendors are rapidly improving their services to make them more digestible, but maybe your organization faces too many hurdles to make a shift within the next two years. See the January 5, 2009, Should Your Live In The Cloud? A Comparative Cost Analysis report. 19 Source: Josh Bernoff and Ted Schadler, Empowered: Unleash Your Employees, Energize Your Customers, Transform Your Business, Harvard Business Review Press, 2010 ( 2011, Forrester Research, Inc. Reproduction Prohibited

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