Public, Private and Hybrid Clouds

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1 Public, Private and Hybrid Clouds When, Why and How They are Really Used Sponsored by: Research Summary 2013 Neovise, LLC. All Rights Reserved. [i]

2 Table of Contents Table of Contents... 1 i Executive Summary... 1 Thanks to our Research Sponsor, Virtustream...2 Background... 3 Cloud Usage Profile... 4 How Long Using Cloud...4 Types of Clouds in Use...4 How Many Clouds in Use...6 Public Cloud Preferences... 7 Private Cloud Preferences... 9 Hybrid Cloud Preferences Cloud Activities and Applications Current and Future IT Strategy Appendix A Respondent Demographics... 1 A Appendix B Notes on Research Process and Methodology... 1 B 2013 Neovise, LLC. All Rights Reserved. [i]

3 Executive Summary During February and March 2013, Neovise surveyed 161 U.S. based IT decision makers on the actual experiences their organizations have had with public, private and hybrid infrastructure-asa-service (IaaS) clouds. By first screening 822 IT leaders and decisions makers, Neovise found that 54% of organizations are using public or private clouds, still leaving plenty of room for industry growth. Among 161 organizations which completed in-depth surveys and that already use IaaS, 74% use more than one type of cloud. At the same time, 40 to 50% of these organizations using IaaS use more than one of the same type of cloud. The results clearly indicate that we have already entered the We have already entered multi-cloud world and there is no going back. What remains is the multi-cloud world and further maturity for hybrid clouds -- where organizations not there is no going back. only use multiple clouds, but also combine and integrate them to provide enhanced capabilities. Service providers and vendors that support multiple types of clouds have a competitive advantage here. Some of the other key findings include: On the great debate about commodity versus enterprise-class infrastructure components, 45% of public cloud users felt that the quality or grade of these components is highly important. Another 34% felt quality of infrastructure components was somewhat important. Based on economic analysis, one of the greatest potential benefits of cloud computing steams from elasticity. Yet less than half of cloud users have deployed elastic applications of any kind. Off-premise private clouds, such as hosted private clouds and virtual private clouds, are gaining a substantial following. Organizations with more than 1,000 employees are 46% more likely than smaller organizations to use hybrid clouds. Cloud users stand to benefit much more from cloud computing as the maturity of their usage increases, particularly with hybrid clouds. About half of the organizations surveyed, or 51%, began using cloud within the last year. As adoption continues, there is still quite a bit of room for winning and losing strategies to be decided and refined Neovise, LLC. All Rights Reserved. Page 1

4 Thanks to our Research Sponsor, Virtustream Virtustream is a leading cloud innovator offering enterprise class cloud software and IaaS for enterprises, governments and service providers. Virtustream simplifies moving complex IT to the cloud - whether private, public or hybrid while delivering the full economic and business benefits of the cloud. Virtustream offers xstream: a secure, high availability, enterprise-class hybrid cloud solution, delivering application level SLAs for mission critical applications (SAP, Oracle, Microsoft and thousands more). xstream is available as software for existing data centers and as a managed service from Virtustream's cloud all backed by professional services to design, migrate, and manage clouds. Virtustream offers xstream worldwide; owns data centers in the U.S. and EMEA; operates an international Cloud Exchange; has offices in San Francisco, New York, London, Washington D.C., Atlanta, Toronto, Dublin, Dubai and Saudi Arabia and has partners in Asia and China Neovise, LLC. All Rights Reserved. Page 2

5 Background During February and March 2013, Neovise surveyed over 800 U.S.-based IT decision makers. After screening these IT leaders and professionals based on the actual experiences their organizations have had with public, private and hybrid infrastructure-as-a-service (IaaS) clouds, a total of 161 were found to qualify for more in-depth questions about their cloud usage, preferences, challenges and more. This summary report presents the results and analysis from this research. For more details on the research process and methodology, please see Appendix B. Demographics Briefly, here are some of the key demographics to keep in mind while reading the report (for detailed demographics, please see Appendix A): All respondents are U.S.-based IT leaders and professionals (i.e. no other functions such as finance, marketing or R&D are represented). o The top five IT departments represented are office of the CIO with 23%, infrastructure services with 13%, infrastructure operations with 9%, network services with 9%, and database administration with 8%. o The top five roles of respondents are IT director with 19%, IT manager/supervisor with 19%, CIO/CTO/IT executive management with 14%, Computer Systems or Network Administrator with 12%, and consultant / integrator with 10%. All responses represent the experiences of organizations that were using public, private or hybrid IaaS at the time of the survey. Additional background on these organizations includes: o All organizations have headquarters in the U.S. o Some also have operations in other major world geographies o All sizes of organizations are represented both by number of employees and annual revenue For number of employees, 28% have less than 100 employees (other sizes, such as 10 to 20,000 and 20,000 plus, represent 7% to 14% each) For revenue, all size ranges are between 7% ($0 revenue for non-profit and government agencies) and 16% ($1 billion plus revenue) o A broad variety of industry verticals are represented. The five largest segments are non-computer manufacturing with 20%, finance and insurance with 11%, education and educational services with 9%, healthcare and social assistance with 8%, and professional and scientific services with 7% o Organizations involved directly with cloud services and products were disqualified 2013 Neovise, LLC. All Rights Reserved. Page 3

6 Cloud Usage Profile Beyond understanding the demographics highlighted in the introduction (and detailed in Appendix A), it is helpful to understand the backgrounds of the surveyed organizations with respect to cloud computing. The following subsections provide the background on cloud usage by the responding organizations. How Long Using Cloud The amount of time spent with cloud computing directly impacts experience and can also impact other factors reported in these results. In order to track this and in some cases compare results against different sub-populations we asked respondents how long their organizations have used cloud computing. n = 161 As shown in the pie chart, 85% of the organizations surveyed began using cloud computing in just the last two years. About half of the organizations surveyed, or 51%, began using cloud within the last year. Types of Clouds in Use Since this research covers multiple forms of IaaS, it was also important to understand which forms of cloud computing responding organizations used. Some of the results of this research will be segmented based on types of cloud used. Among All Organizations In order to get a perspective on how many organizations in general (of all types and sizes) are using IaaS, the following data points use all respondents (n = 822): 2013 Neovise, LLC. All Rights Reserved. Page 4

7 37% of organizations in general use public IaaS clouds 37% of organizations in general use private, on-premise IaaS 35% of organizations in general use private, off-premise IaaS Cloud computing is certainly popular, but not everyone is using it yet. With 46% of the organizations not using any of these forms of cloud computing, there is plenty of room for industry growth. As shown above, off-premise private cloud has gained a substantial following. Since that form of IaaS has been discussed somewhat less than the others during the initial years of cloud adoption, it will be interesting to see how its growth continues to evolve over the coming years. Among Organizations Using Cloud Computing When only considering organizations that already use cloud computing, the types of clouds they use is described as follows (n = 161, 100% use some form of IaaS). 75% of these organizations use public IaaS clouds 70% of these organizations use private, on-premise IaaS 65% of these organizations use private, off-premise IaaS These organizations are the primary focus of this research. Use of Hybrid Clouds Hybrid clouds have long been expected to become a popular form of cloud computing, particularly among large organizations. Those surveyed indicate that hybrid clouds are already gaining popularity and not just with large organizations: 71% of organizations using public or private IaaS, use hybrid clouds At the same time, larger organizations are more likely to use hybrid clouds. Among those using public or private IaaS: 86% of organizations with more than 1,000 employees, use hybrid clouds 59% of organizations with fewer than 1,000 employees, use hybrid clouds This means that larger organizations (with 1,001 or more employees) are 46% more likely to use hybrid clouds than smaller organizations. Note: Please keep in mind that the capabilities available in hybrid environments are still in their infancy. Other sections provide more details on how hybrid clouds are actually used Neovise, LLC. All Rights Reserved. Page 5

8 How Many Clouds in Use When organizations use any type of IaaS cloud, they often use more than one of them, as shown in the table: 45% of those that use at least one public IaaS cloud (n = 120) use two or more 50% of those that use at least one private, on-prem cloud (n = 113) use two or more 43% of those that use at least one private, off-prem cloud (n = 105) use two or more Simply put, 40-50% of users of each type of cloud use more than one of that same type Neovise, LLC. All Rights Reserved. Page 6

9 Public Cloud Preferences To better understand public cloud preferences, users of public cloud services (n = 120) were asked, Rate the importance of each of the following PUBLIC cloud characteristics for your organization. Respondents felt strongly about their top three public cloud preferences with about two thirds or more rating each of the following characteristics as highly important: 1. Reliability and availability, 67% 2. Consistency of performance, 64% 3. Performance, 63% While we already know security is a top requirement for public cloud users, the top results here indicate that users also want to know they can count on their public clouds in other very basic ways. Reliability, availability and performance (as well as security) all represent some of the most basic and necessary attributes of any IT service. Interestingly, as public cloud users gain experience, they are becoming aware that consistency of performance can be even more important than raw performance. Some public clouds lack performance consistency, even while delivering solid performance under normal conditions. Public cloud users rated the importance of support availability (from both the community and the provider) or robustness of SLAs lower than other characteristics. However, the vast majority still rates these characteristics as above average in importance Neovise, LLC. All Rights Reserved. Page 7

10 Users of public cloud services (n = 120) were also asked, Rate the importance of each of these ADDITIONAL public cloud characteristics for your organization. Neovise regularly hears about the desire of public cloud customers to have more flexible server configurations, with customizable choices for RAM and cores. Respondents have indicated that flexibility in network and storage configurations is even more important than flexibility in server configurations. Both network and storage flexibility will benefit from emerging technologies over the next couple years software defined network (SDN) for networks and solid state drives (SSD) for storage. One of the great debates for public cloud services has been about the use of commodity-grade infrastructure components versus higher-grade components. With 45% indicating they feel infrastructure quality is highly important, there is clearly a large segment of cloud users that want high-quality infrastructure. While component quality varies dramatically between providers, public cloud users can indeed find clouds built with enterprise-class infrastructures. Data-center-related characteristics were among the lowest importance among public cloud users. However, there is still a sizeable segment of users that feel strongly about access to multiple data centers, location of data centers and connectivity options for these data centers. Cloud architectures to not completely abstract these characteristics away and many applications depend on these characteristics to performance and quality of service objectives. So it is not surprising that a about a third or more rate these characteristics as highly important Neovise, LLC. All Rights Reserved. Page 8

11 Private Cloud Preferences To better understand private cloud preferences, users of on-premise private cloud services (n = 113) were asked, Rate the importance of each of the following PRIVATE cloud characteristics for your organization. The majority of on-prem private cloud users believe the following three characteristics are highly important for private clouds: 1. Additional security controls for sensitive data, 64% 2. Improves speed, flexibility or quality of resource provisioning relative to your existing on-premise capabilities, 59% 3. Allows use of your existing IT hardware to build the private cloud, 58% On-prem private cloud users had no trouble indicating that they prefer to leverage existing hardware investments while at the same time improving its value through more agile and higher quality resource provisioning. On a relative basis, fewer on-prem private cloud users value APIs or public cloud interoperability as much as they value improved resource provisioning. Among other things, this seems to indicate that private cloud users are not yet taking advantage of all the cloud-oriented attributes of private clouds Neovise, LLC. All Rights Reserved. Page 9

12 Users of on-premise private cloud services (n = 113) were also asked, Choose the type of company from which your organization would most prefer to purchase or obtain the software used to implement and manage your organization's on-premise private cloud(s). While diversified systems vendors, consultants and systems integrators led the field of choices, public cloud service providers made a very strong showing with 20% of respondents selecting them as their first choice for providing their private cloud software. On-prem private cloud users can gain significant benefit by deploying a cloud that interoperates well with a public cloud. With so many private cloud solutions from independent software vendors (ISV) on the market, it is surprising to see only about 14% of respondents select ISVs as their preferred provider. Private cloud users likely have strong bargaining power given the state of this market. It is great to see that very few on-prem private cloud users prefer to develop their own software. Very few IT organizations have the expertise or resources to follow this approach yet many have tried and failed, often moving to commercial solution as a replacement. Perhaps based on the same logic as above, on-prem private cloud users are also not that interested in starting with open source software. A huge amount of work is involved with taking a raw open source code drop and turning it into a production-ready cloud Neovise, LLC. All Rights Reserved. Page 10

13 Hybrid Cloud Preferences To better understand hybrid cloud preferences, users of hybrid clouds (n = 115) were asked, Rate the importance of each of the following HYBRID cloud capabilities for your organization. Hybrid clouds can potentially be used in many ways, leading to heated discussions about what is and what is not a hybrid cloud. In hopes of lending some facts to the debate, this rating table touched on quite a few hybrid cloud use cases. While it succeeded to some degree, there was a fairly narrow range from 41% to 57% for ratings of highly important. This relatively low spread is likely at least somewhat indicative of the still early stages of hybrid cloud adoption and use. We expect a higher spread, with some use cases gaining relative importance and others losing relative importance, over the next couple of years. In any, case there were three use cases that the majority or near majority felt were highly important: 1. Ability to easily move an entire application from one cloud to another, on either a short or long-term basis, with 57%. Some argue that this is not a hybrid cloud use case since the given application only runs in one cloud at a time. However, cloud users seem to have a broad perspective on how multiple clouds can serve their needs. They also care little about the exact terminology or for over-constrained definitions. 2. Ability for an application in one cloud to easily access data in another, with 52%. We expect this to become an extremely popular hybrid cloud use case over time Neovise, LLC. All Rights Reserved. Page 11

14 3. Ability to use or manage the resources of separate clouds as a single, combined pool of resources, with 49%. This should also become a more popular use case as the boundaries between on-premise private clouds and public clouds become blurred. Users of hybrid clouds (n = 115) were also asked, Rate the importance of each of the following architectural elements of a HYBRID cloud for your organization. As with the last rating table on hybrid cloud capabilities, the ratings for these architectural elements fall within a narrow range. In fact, the range is even narrower with ratings of highly important all falling between 43% and 50%. Recall that 71% of cloud users surveyed (n = 161) have indicated they use hybrid clouds. Additionally, the level of importance for all of these architectural elements of hybrid clouds is fairly high as shown above. The narrow range again supports the idea that we are at the early stages of hybrid cloud adoption and use. As hybrid clouds are used in increasingly advanced ways, their individual architectural elements are likely increase and decrease in relative importance Neovise, LLC. All Rights Reserved. Page 12

15 Cloud Activities and Applications You already know that all 161 primary respondents to this survey use public clouds, private clouds or both. You also know that 71 percent of them use private clouds. What you didn t know, until this section, is how organizations use each of these clouds for various activities. n = 161 As seen at a glance, the level of activity on each type of cloud is quite different with private clouds seeing more action than public or hybrid clouds. There will be more discussion about that on the next page. Beyond the variation in activities between clouds, there is also a lot of variation in the activities performed on each type of cloud. For public clouds, the greatest difference in usage is between mission critical production applications (at 25%) and average importance production applications (at 37%). Public cloud users are about 50% more likely to run average importance applications as compared to mission critical applications. Moving to private clouds, all activities are more likely to be performed on a private cloud than a public cloud. In fact, it is 2.5 times more likely for a mission critical application to run on a private cloud than a public cloud. Some might expect even less cloud users to run mission critical applications on a public cloud. However, some public clouds, such as that offered by Virtustream, are designed to support that scenario. Still, with so many commodity-oriented clouds on the market, it is not surprising that private clouds are the more popular overall choice. Also seen is the relatively lower overall use of hybrid clouds. While 74% of respondents use hybrid clouds, much less is actually done with them. This should change in the next few years Neovise, LLC. All Rights Reserved. Page 13

16 Getting back to the differences in activity between the different types of clouds, the following chart illustrates the situation graphically: n = 161 To summarize: On average, public clouds are used more often than hybrid clouds (by 69%) On average, private clouds are used more often than public clouds (by 88%) Rather than just considering activities that are performed on these clouds, we also looked at more specific types of applications. The chart below summarizes this: n = 161 At a glance, the results are similar to the previous chart with private cloud seeing more of the action. Notably, elastic / scale out web applications on public clouds are within 10% of the rate on private clouds compared to an 88% difference for the average activity Neovise, LLC. All Rights Reserved. Page 14

17 Current and Future IT Strategy As cloud computing becomes more popular and widely adopted, it is changing overall IT strategies, putting more emphasis on pay-as-you-go spending and relying more on just-in-time resources. To better understand how the use of different types of IaaS clouds will change over time, we asked questions about priorities for each both now and one to two years from now: The most important approach for current overall IT strategy for the 161 organizations is private, on-premise clouds. The least important overall IT approach for current overall IT strategy is traditional IT. These are clear. Since the middle choices were less clear, a weighted average was then used to get at the overall ratings (weighting of 5 assigned to first choice votes, 4 to second choice votes, 3 to third choice, 2 to fourth choice and 1 to fifth choice). Then we can see that the order of preference for current strategy is: 1. Private on-premise 2. Private off-premise 3. Hybrid 4. Public 5. Traditional However, please keep in mind that the middle three do not have high confidence associated with their order. They remain too close to call Neovise, LLC. All Rights Reserved. Page 15

18 The next chart shows the order of preference for IT strategy one to two years from now. While some slight changes can be seen, none of them show any statistical significance. The most important approach for future overall IT strategy remains private, on-premise clouds. The least important overall IT approach for future IT strategy remains traditional IT. The middle three remain too close to call with sufficient significance. Based on all these results, the respondents have already largely adjusted their current strategies to match what they know about cloud computing and how the different forms of cloud support their requirements. While respondents did not or could not articulate a further change in strategy one to two years from now, we fully expect strategies to continue changing in this timeframe. This will likely be driven by increased experience with the middle three choices discussed above. It will also likely result in clearer preferences on those cloud models. Note: Strategy and implementation are two different things. While it is relatively easy to change a strategy, implementation takes much longer. This suggests, in part, that since strategies are already forward looking and ahead of implementation, it may be difficult for IT leaders and professionals to foretell future strategies. The responding organizations have already embraced cloud computing and adjusted IT strategies accordingly. Asking how strategy has actually changed over the last year or two would more likely show differences Neovise, LLC. All Rights Reserved. Page 16

19 Appendix A Respondent Demographics n = 161 n = 161 n = Neovise, LLC. All Rights Reserved. Appendix A, Page 1

20 n = 161 n = 161 n = Neovise, LLC. All Rights Reserved. Appendix A, Page 2

21 Appendix B Notes on Research Process and Methodology Over 1,000 potential respondents were invited to participate in this research. They came from a pre-screened and validated pool of U.S. based IT decision makers that represent organizations of all size ranges and across all industry verticals. A total of 822 of these IT leaders and professionals were screened on the actual experiences their organizations have had with public, private and hybrid clouds. Qualification: In order to qualify to complete the full survey, respondents had to work for organizations that use public and/or private cloud computing. They also had to have a solid working knowledge of their organization s cloud activities. Disqualification: Respondents were disqualified from continuing with the full survey if they work for organizations that sell any of the following: Public hosting services such as shared, dedicated or cloud hosting Cloud-related management or consulting services Products designed specifically for building or operating IaaS clouds In the end, 161 valid surveys from qualified respondents were completed. The results from these surveys form the basis of the results in this report. Thus, unless otherwise indicated, the number of respondents for each result is 161, sometimes marked as n = 161. When specifically indicated, some results are presented from subsets of the 161 surveys. For example, results may be shown for organizations with $1 billion or more in revenue. Since there were 26 of those organizations represented, the number of respondents would be indicated with n = 26. Some of the 161 qualified respondents also participated in telephone interviews to provide additional depth and color to the results. The information from these interviews is provided through written quotes and is not summarized statistically. Definitions All survey respondents were instructed to use the following definitions and explanations for the terminology used in the survey: 2013 Neovise, LLC. All Rights Reserved. Appendix B, Page 1

22 For this survey, "cloud computing" and "IaaS" only refer to cloud-based infrastructureas-a-service (IaaS). They do not refer to platform-as-a-service (PaaS) or software-as-aservice (SaaS). For any IT environment to be considered "cloud computing" or "infrastructure-as-aservice (IaaS)" for this survey, it must go beyond basic virtualization. For example, it should offer additional capabilities such as pooled compute resources, self-service provisioning, automated control of the environment or application programming interfaces. In this survey, "your organization" refers to the overall company, government agency, university, non-profit or other type of entity for which you work -- not just your department. Note that off-premise private clouds may include virtual private clouds (virtually partitioned from a larger cloud) and hosted private clouds (physically separated from other clouds; a distinct private cloud in a on-premise hosted environment) Neovise, LLC. All Rights Reserved. Appendix B, Page 2

23 About Neovise Based on independent research and analysis, Neovise delivers essential knowledge and guidance to cloud-related technology vendors, service providers and systems integrators, as well as business and IT organizations that purchase and use cloud-related services and technology. Our offerings include research, advisory and collateral development services that help our customers and their customers make optimal decisions and formulate winning strategies. Research. Analyze. Neovise. For more information, visit Neovise, LLC. All Rights Reserved.

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