The Continuing Enterprise Cloud Computing Evolution A Market Overview based on Primary Research Benchmarking, November 2012

Transcription

1 The Continuing Enterprise Cloud Computing Evolution A Market Overview based on Primary Research Benchmarking, November

2 Agenda Key Findings Goals and key questions What is the cloud market from a vendor or provider perspective? What is the study s big picture of the enterprise cloud? What are the enterprise cloud market segments? What is the near-term future of enterprise cloud? Summing Up Appendix: Goals and methods

3 Five key study findings on enterprise cloud computing migration among 97 medium to large enterprise IT buyers Cloud computing adoption among medium to large enterprises is now widespread Cloud segments have demographic trends Cloud model preferences and vendors vary by segment Project priorities vary by segment Enterprises will rapidly deploy more cloud solution in coming year Nearly 90% of responding enterprises use of plan to use some type of cloud computing solution; the market is comprise d of 19% Cloud Pros who have multiple clouds, 59% Pioneers who use or test a cloud, 12% Planners who intend to deploy and 10% Stragglers who have no plans. Cloud Pros and Pioneers tend to be very large enterprises in banking/finance, manufacturing, higher education, or business services; while Planners and Stragglers are smaller and in government, healthcare and heavy industries. Pros use every type of cloud, with most common being public cloud (91%) & least common is hybrid (45%); Pioneers use internal private cloud (56%) & PaaS (46%); 83% of Pros use AWS data center, contrasted with 28% of Pioneers, who mostly use traditional IBM & Verizon. Cloud Pros implement network-related projects to prepare for Cloud and Pioneers improve storage and security. About or greater than 70% of Pros add LAN bandwidth, WAN bandwidth and WAN optimization, while about 70% of Pioneers add SANs, NAS and encryption. Percentage of IT in the cloud estimates are slightly higher in 2012 than in Pros expect to increase cloud as a percentage of IT from about 28% to 38% in the next 3 years, while Pioneers hope to more than doubles its percent of IT in the cloud from nearly 15% to 33%.

4 Goal and key questions What s the current market for cloud solutions? How has the market changed in the last 18 months? What are market segments and who are they? Help IT and telecom marketers better understand medium and large enterprise cloud prospects and customers How does enterprise IT vary by segment? How do cloud solutions vary by segment? How do future cloud plans vary by segment?

5 How s the cloud market from a vendor or provider perspective? In a challenging macroeconomic environment, cloud has a profound impact.

6 Enabling technologies prosper Virtualize everything continues Nicira s network virtualization has high-profile user in ebay, and a buyer in VMware VMware s Monster VMs grow from 32 to 64 virtual CPUs Zerto s cloud-based disaster recovery services for enterprises and service providers include virtual replication Object storage takes root Cloudian launched free, object-based storage platform, storing up to 100TB Scality grew 120% year-over-year and signed agreements supporting over 50 million users Cleversafe launched Object-based Dispersed Storage System for Big Data, promising to reduce required storage and network bottlenecks supporting exabyte and beyond storage WAN optimization and content delivery importance renews Aryaka, a cloud-based WAN optimization and app acceleration service provider partners with AWS Akamai buys FastSoft to improve website and web application performance across the first and last miles, as well as through the cloud, without requiring client software or browser plug-ins Sources: Company Press Releases

7 Many tech segments benefit Telco & CDN providers renew grow Enterprise customer segment is finally seeing revenue increases even without any lift from the economy its first in more than four years. The growth was small, but still a positive trend. AT&T, July 24, 2012 Legacy Savvis year-over-year increases of 11.5% in managed hosting and cloud services revenues and a modest increase in network services revenues. CenturyLink, Aug. 10, 2012 Cloud infrastructure solutions growth, accelerated to 22% yearover-year, made up 58% of our total revenue. And in terms of brand-new customers to Akamai, over 75% purchased a cloud infrastructure solution. Akamai, July 25, 2012 Large integrators & outsourcers see gains We doubled last year s revenue, with contribution from all areas, private cloud, public cloud and our industry-based solutions. IBM, July 18, 2012 Demand continues to grow for cloud solutions, for application replatforming and also for new software-as-a-service solutions from both the established technology players, as well as from newer SaaS providers. Accenture, June 28, 2012 Pure-play cloud vendors grow unabated Revenue was up 34% over last year, for the 6th consecutive quarter of year-over-year revenue growth in the mid-30% range. There's no other enterprise software company of our scale growing at this rate. Salesforce.com, July 24, 2012 Overall, the Data Center & Cloud business had a strong first half of 2012, up 25% through midyear. Within our SaaS business, revenue was up 18% from last year. Our collaboration and data sharing products, which account for over half of the total SaaS revenue, increased 33%. Citrix, July 25, 2012 Dedicated cloud revenue increased representing 4.1% sequential growth & 21% growth on a year-over-year basis. Public revenue cloud 12.1% sequential growth & 69% growth on a year-over-year basis.. Rackspace, August 7, 2012 Cloud platforms find market acceptance With more than 100 large enterprise customers, Cloudstack was contributed to the Apache software foundation which runs some of most successful open-source cloud projects. ebay announced they use OpenStack to manage a high-volume dev, test and experimentation environment where apps are created for ebay marketplaces. Neustar ported its UltraDNS to AWS. Sources: Company earnings calls, press releases

8 Hardware landscape changing, but data center and storage provide bright spots Overall switching revenues flat this quarter with fixed switching up 3% and modular switching down 7%...Routing growing revenues 4% year-over-year while many of our peers are experiencing negative growth... Data center business had strong growth with revenues up 87%. HP, August 15 th, 2012 Cisco, August 15 th, 2012 On a less positive note, the mainstream server market continues to show weakness. Turning to Enterprise Servers, Storage and Networking. Revenue of $5.1 billion was down 4% year-over-year. Storage, the continued strong performance of 3PAR, with more than 60% growth, and StoreOnce, with double-digit growth, did not offset the decline in EVA and Tape revenue. Sources: Company Earnings Calls

9 What about enterprises? How do they benefit?

10 Cloud brings increased agility, cost savings, new functionality and competitive advantage Cloud computing growth

11 Turning to the study, what s the big picture of enterprise cloud? Understanding cloud services first requires looking through a wider lens of where the journey to the cloud begins-- virtualization and outsourcing.

12 Among all respondents, disaster recovery is outsourced the most Storage Perimeter Security Disaster Recovery Biggest growth for outsourcing is storage-related where levels are twice last year s levels. Security is also up about 80% and network management stayed neutral. Network Management Data backups Q. Yes or no, do you outsource any of the following functions? (n=97) 12

13 Nearly half of all servers are virtualized, along with about a third of storage and workloads Q. Regarding storage/servers/tier 1 workloads/tier 2 workloads, what percentage is virtualized? (n=96)

14 Respondents most use IBM and Verizon data centers In addition to any internal data center, most respondents avoid single vendor dependencies by using an average of 2.1 data center companies The minimum was 1 and the maximum was 9 vendors

15 Cloud use hits nearly 80% of respondents, and like last year, most common deployment models are still PaaS and private clouds Up from 58% of medium to large organizations in just 18 months, most now test or use some type of cloud solution. Penetration of PaaS and hosted private clouds are about the same as last year, while public clouds more than doubled. Internal private clouds and IaaS grew about 60%. Q: For each of the following types of cloud deployment, we d like to know if it s currently in production, in trial, planned in 24 months? N=97 15

16 With nearly half of all respondents using an HR cloud app, it surpasses CRM as the top enterprise app in the cloud Human Resources 48.2% Customer Relationship Management 34.6% Desktop Apps 25.6% Accounting/Finance 18% Business Intelligence 17.9% Supply Chain/Enterprise Resource Management 9.4% Q. Again for apps, is a cloud computing architecture in production, in trial, planned, or not planned? N=78 16

17 No surprise that accounting is most often a private cloud and CRM is most likely public Private Public Hybrid Accounting/Finance 68% 11% 21% Supply Chain/Enterprise Resource Management 64% 25% 12% Human Resources 64% 24% 10% Desktop Apps 62% 31% 7% Business Intelligence 67% 27% 12% Customer Relationship Management 47% 44% 9% Q. Again for apps, is a cloud computing architecture in production, in trial, planned, or not planned? N=42 17

18 and backup/data recovery remain top infrastructure-related app in the cloud Backup storage/ disaster recovery 39% 38.1% Remote desktop management Tier 1 storage 26.2% 30% Collaboration Communications Portals *Not Included in 2011 Q. Again for apps, is a cloud computing architecture in production, in trial, planned, or not planned? N=78 18

19 Most infrastructure-related apps use private clouds, but remote desktop & collaboration have more even split Private Public Hybrid Tier 1 storage 77% 11% 11% Remote desktop management Backup storage/ disaster recovery 73% 17% 71% 21% 10% 9% Communications 70% 14% 16% Portals 67% 28% 5% Collaboration 58% 31% 11% 74% 26% 16% Q. Again for apps, is a cloud computing architecture in production, in trial, planned, or not planned? N=42 19

20 What are the enterprise cloud market segments?

21 The medium to large enterprise market evolved into four broad segments Cloud Planners: Planning for cloud Cloud Stragglers: No plans Cloud Pros: Using multiple clouds In 2012, multi-cloud users emerged as a segment called the Cloud Pros. Accounting for about 19% of the sample, Cloud Pros truly lead the way by using four or more cloud solutions. Cloud Pioneers: Using cloud computing S: For each type of cloud deployment, we d like to know if it s currently in production, in trial, is planned in 24 months? N=96 21

22 Pros and Pioneers tend to be larger organizations, while Planners and Stragglers are smaller Emerging segment Cloud Pros, like Pioneers, are Cloud Pros Cloud Pioneers Cloud Planners mostly very large organizations. Planners tend to be medium-sized and Stragglers are all medium; all suggesting that cloud is no longer new technology. Cloud Stragglers S: How many employees does your organization have? N=96

23 Each segment contains the range of verticals, but some industries more prevalent than others Cloud Pros Financial services/banking, business services and manufacturing Cloud Pioneers Business services, manufacturing and higher education Cloud Planners Financial services/banking, media, healthcare and government Cloud Stragglers Utilities, construction, mining and education

24 Pros virtualize more than Pioneers and Pioneers virtualize more than Planners Enterprises that use virtualization continue to increase. Last year, 73% of Pioneers used server virtualization, compared to this year s 95%. Q. Regarding storage/servers/tier 1 workloads/tier 2 workloads, what percentage is virtualized? (n=96)

25 Each segment outsources different functions Storage Perimeter Security Disaster Recovery Across all IT functions, Stragglers outsource more, while Pioneers outsource storage and security significantly more than last year. Network Management Data Backups Q. Yes or no, do you outsource any of the following functions? (n=96) 25

26 Stragglers manage their own data centers, while other segments outsource more Cloud Pros Cloud Pioneers Cloud Planners Data center trends mirror overall outsourcing trends. Last year, 68% of Pioneers internally hosted and managed their own data centers, compared to 47% now. Cloud Stragglers Q: Which best describes your data center operations? (n=96) 26

27 Turning to cloud, nearly all Cloud Pros use a public cloud while half of Cloud Pioneers use an internal private cloud Changes from last year are 1) Use of public clouds has doubled, and 2) use of internal private clouds surpassed hosted private clouds. Q: For each of the following types of cloud deployment, we d like to know if it s currently in production, in trial, is planned in 24 months? N=

28 Pros and Pioneers use multiple data centers with AWS serving nearly all, while Pioneers use IBM, Verizon, and Rackspace The open standards divide? AWS lags among Cloud Pioneers suggesting increased competition from other proprietary solutions as well as open standards. Q: Which of the following data centers does your organization use? (n=90)

29 Pros expand existing data centers, while most Pioneers finished their data center consolidation & expansion Pros Pioneers Planners Planned within 24 months Completed /In Process Q: For each of the following we d like to know if it s currently in production, in trial, being planned in the next 24 months, no plans? N=76 29

30 Most already finished or don t expect to add 10G switching for increased capacity or new management tools Pros Pioneers Planners Planned within 24 months Completed /In Process Q: For each of the following we d like to know if it s currently in production, in trial, being planned in the next 24 months, no plans? N=76 30

31 Experience is a powerful teacher: network is top project priority for Pros while security, storage & virtualization for Pioneers Last year, security projects got top priority in pre-cloud prep work while network-related projects were in the bottom half of the list. This year s results show cloud s strains on the network. Q: For each of the following were they necessary before cloud computing, during initial deployment, follow-on, future plans, or no plans? N=78 31

32 What about future enterprise IT plans?

33 Expect even more outsourcing in coming years Percentage that strongly agree that they will increase outsourcing in the next 24 months: Cloud Pros Cloud Pioneers Expectations for IT outsourcing increases are even stronger this year than last year; nearly 46% of Pioneers this year compared to 32% of them last year expect to outsource more. Cloud Planners Cloud Stragglers Q: On a 1 to 10 scale, how much do you agree with the following statements? N=96 33

34 Pioneers aim for hybrids, private clouds and increased use of IaaS - while Pros look to add more PaaS-based apps and hybrid clouds The 24-Month Plan Results for Pioneers rank similarly to last year s results. Given the increased experience, knowledge and sophistication of newly-emerged Pros, rankings are about what we d expect to see. Q: For each of the following types of cloud deployment, we d like to know if it s currently in production, in trial, is planned in 24 months? N=

35 Close to last year s levels, by 2015 Pros expect 38% and Pioneers expect 33% of IT to be in cloud For cloud users, an average of 4.4% of IT is cloud-based Q. What percentage of your IT is currently cloud-based? (n=74) Q: What percentage of your IT will be outsourced to a cloud provider by 2012? 2015? N=96 35

36 Summing Up

37 Five key study findings on enterprise cloud computing migration among 97 medium to large enterprise IT buyers Cloud computing adoption among medium to large enterprises is widespread Cloud segments have demographic trends Cloud model preferences and vendors vary by segment Project priorities vary by segment Enterprises will rapidly deploy more cloud solution in coming year Nearly 90% of responding enterprises use of plan to use some type of cloud computing solution; the market is comprise d of 19% Cloud Pros who have multiple clouds, 59% Pioneers who use or test a cloud, 12% Planners who intend to deploy and 10% Stragglers who have no plans. Cloud Pros and Pioneers tend to be very large enterprises in banking/finance, manufacturing, higher education, or business services; while Planners and Stragglers are smaller and in government, healthcare and heavy industries. Pros use every type of cloud, with most common being public cloud (91%) & least common is hybrid (45%); Pioneers use internal private cloud (56%) & PaaS (46%); 83% of Pros use AWS data center, contrasted with 28% of Pioneers, who mostly use traditional IBM & Verizon. Cloud Pros implement network-related projects to prepare for Cloud and Pioneers improve storage and security. About or greater than 70% of Pros add LAN bandwidth, WAN bandwidth and WAN optimization, while about 70% of Pioneers add SANs, NAS and encryption. Percentage of IT in the cloud estimates are slightly higher this year than last. Pros expect to increase cloud as a percentage of IT from about 28% to 38% in the next 3 years, while Pioneers hope to more than doubles its percent of IT in the cloud from nearly 15% to 33%.

38 The market has evolved as manageability improved, but performance is the new barrier We are here Current offerings very similar; no sustainable differentiation More Enduring Differentiation 38

39 How will the near-term enterprise cloud market evolve? Read two upcoming reports and learn more about the four cloud segments and their preferences for 1) Service packaging and marketing, and 2) Sales channels and buying WaveLength Market Analytics LLC ( Winn Technology Group, Inc. (

40 Appendix: Goals and Methods Goal: Understand broad enterprise migration-to-the cloud trends and the channel to customer Random sample drawn from Winn Enterprise/mid Market DB that included high-level IT decision-makers (Senior Managers, Directors, and VPs) Primary research data collection methodology collected by Winn Q2/Q by using a telephone survey, supplemented by e-survey, landing page provided to provide respondents the ability to answer via Web, and incentives to increase response rates Sample size = 96; weighted to present distribution of US companies greater than 500 employees Using only SaaS alone not considered a cloud user or planner; they had to use another cloud service model and must actually have IT staff working on it Update from 2011 Five Key Themes on Enterprise Cloud Migration