The Real Score of Cloud

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1 The Real Score of Cloud Mayur Sahni Sr. Research Manger IDC

2 Digital Transformation Changing Role of IT Innova&on Informa&on Business agility Changing role of the CIO Technical Chief of Infrastructure Chief of Integra1on Business Chief of Intelligence Chief of Innova1on Leadership Chief of Influence Chief of Inspira1on IT agility Services Technical Business Leadership Systems Technical Manager Source: Refer in document as Technology and web-based giants will move into adjacent business areas signaling a new wave of business disruption 2

3 Decision Framework High Low Strategic Value High Priority High Strategic Value High Priority Priority Low File Print Retain Redirect Outsourced AP/AR Low Strategic Value Low Priority Public Cloud Social Biz HR apps Payroll Collab- ora&on Web Decision Support Converged Systems Reengineer High Strategic Value Financial Analy&cs Repriori&ze Private Cloud Database Low Priority In- house IT Engineering ERP CRM Data analy&cs Supply Chain High Business Value 3 Confidential 3

4 Different Paths Yet End Goal is Managing a Hybrid Environment Different paths, yet, end-goal is managing hybrid environment Implementation Effort Implementa1on Effort Limited production: Enterprise application, private cloud Pilot Project: Private Cloud Experimental: Public cloud SaaS Private cloud: Enterprise applications, self service, chargeback Enterprise-wide: Horizontal service (eg HRM) Public cloud Workload specific: Infrastructure replacement Public IaaS or vpc LOB-specific: Business process (eg field service agent management Public cloud Cloud Orchestration Limited production: Enterprise application, virtual private cloud Business Impact Business Impact

5 Workload Distribution indicates Hybrid IT 100 China Korea Hong Kong Vietnam Indonesia Taiwan APEJ Malaysia New Zealand Philippines Australia Singapore India Thailand Public Cloud Virtual Private Cloud Hosted Private Cloud 50 On-premises Private Cloud On-premises Legacy Do not use any external services Trend 0 Resource alloca1on op1ons will change significantly with nearly 50% of resource being sought externally Poor preparedness on ITSM and EAM will create boklenecks SOURCE IDC AP Cloud Survey, n =

6 Asia/Pacific Cloud Maturity by Country IDC Cloud MaturityScape (Tech-Buyer Benchmark Tool) 27% 26% 20% 20% 6% Ad Hoc Opportunistic Repeatable Managed Optimized Australia Malaysia 2% of respondents were not using any cloud services Philippines Indonesia S. Korea New Zealand Singapore China Vietnam Hong Kong India Taiwan SOURCE IDC s APEJ 2014 End-user cloud survey (N=2300) Thailand 6

7 Migration to Cloud will be Mostly From On-Prem Private 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Business Applica&ons Decision Support and analy&cs collabora&on Unified Comms App. Dev & test App dev & Mgmt. IT infrastructure security On- premises legacy On- premises private cloud Outsourced Managed service New workload 7

8 Philippines: Workload Priority is for Operations Not considered High priority Security Infrastrcuture App deploy and management App dev and tes1ng Unified Communica1on and Collabora1on Decision Support and Analy1cs Business Applica1ons 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 8

9 Chapter Two of Cloud 9

10 Welcome to Chapter 2 of Cloud Chapter One: Vendor, Technology Driven Chapter Two: User, Solu1on Driven Innovators Early Adopters Early Majority Late Majority Laggards 1. Cloud adop1on is already beginning to shi] into a Chapter Two Phase 2. In Chapter Two, the scale of cloud adop1on is much larger and less vendor and technology driven and more use and solu1on driven 3. Cloud is no longer a stand alone technology

11 Comparing Chapter 1 and 2 Hardware So]ware Services Hardware/So]ware OEM So]ware Services Business Process Provider Service Provider Consumer of Services Role of IT Build resilient systems for high performance and low change Build standardized workflows Manage rate of change Support business with flexible and agile systems with consumer grade experience Manage mul&ple partners Lead the transforma&on agenda by ensuring IT has people and process capabili&es to adopt and manage technology Role of LoB Execute on tradi&onal business processes Drive innova&on to compete beber and leverage technology intensively Accelerate innova&on on the digital agenda, strengthen business performance through partner share, product and feature enhancements.

12 WW Cloud 2015 Top 10 Decision Imperatives Business Drivers Diversity increases enterprise flexibility and risk Reach & real 1me need foster new go to market and sourcing strategies Cloud plaborm gravity akracts IT energy and ac1vity Connected culture drives expecta1ons of self service Social Drivers Tech Drivers Pervasive government scru1ny of personal data and IP protec1on Everything as a Service creates liquid IT markets Industry digi1za1on drives structural transforma1on Source: IDC, IDC FutureScape: Worldwide Cloud 2015 Predictions, #253476

13 2015 Cloud Predictions Two classes of cloud partners 2017 Containerized apps accelerate hybridiza&on Management APIs a cri&cal differen&ator Hybrid cloud the dominant delivery model % of workloads delivered from off- premises 2015 Hybrid cloud exposes service management deficiencies 25% of ISVs fail OpenStack a standard SKU for private cloud Channel partner ecosystems fracture and reform 13

14 Reality Check 14

15 Case Studies

16 Messages from the Adopters 1. Cloud is an opportunity to learn 2. Pace of enablement 3. Agnostic to how things are provisioned & deployed 4. Automate everything 5. Computing in different datacenters based on spot pricing Cloud does save money Cloud isn t just about cheaper IT infrastructure anymore Plan before acting Need an experienced partner Don t make excuses for inaction 16

17 Real Issues Transforma&on and Impact on Sourcing Strategies Services Expecta&ons Op1mizing sourcing strategy across tradi1onal and services firms as firms transform to a cloud services model of delivery Defining the impact of changing SLAs and business outcome requirements Financial Impacts Understanding impact on capex, opex, taxes, budget requirements, etc. Supplier Structure and Ecosystem Organiza1onal Structures and Governance Understanding impacts of the changing structure of providers and associated ecosystem structure on sourcing strategies Determining the op1mal mixture of management skills (IT versus business) and developing an effec1ve procurement strategy Contractual Factors Addressing changes in contract structure (e.g., from mul1ple to single SLAs; ability to repatriate services) and understanding the differences, strengths, and weaknesses of different pricing models 17

18 IT Service Delivery 2017 (Out)sourcing 3.0 Externally sourced IT and business services, including Cloud- based business services Enterprise IT becomes synonymous with service sourcing Enterprise IT Hybrid IT and business service delivery using internally and externally sourced services Broad and deep range of IT and business services, from commodity to mission- cri1cal Delivery based on cloud technologies and pricing models Shorter term contracts compared to tradi1onal ITO and BPO Mul1- level SLAs to match business requirements Service delivery efficiency achieved by use of core cloud compu1ng elements: virtualiza1on, automa1on and service management Service innova1on and effec1veness achieved by sourcing and integra1on of external cloud applica1ons to match opportunis1c business needs Hybrid environment of legacy on- premises, on- premises cloud and outsourced services. IT workforce must be rebalanced to manage greatly increased number of service providers ITSM focus expanded from IT systems management to include full service lifecycle of service procurement and business process management

19 The new Skills Mix for IT 19

20 Deciding on Your Journey Right Architecture Service Management Scaling Out/Scaling Up Self Service ITaaS Innova&on 20

21 What is the Impact of this Change for the CIO? 90% of IT Investments Will Be Evaluated in Terms of Strategic Goals 70% of IT Departments Will Embrace a "Cloud First" Strategy IT Will Deliver 3rd Plaborm Mashups as Compe11ve Differen1ators and 1 in 3 new applica1on development will target a mobile form factor. Line- of- Business (LOB) Directly Involved in 80% of New IT Investments 50% of Business Execu1ves Will View the IT as a Business Innovator Source: IDC Cloud Services Research 21

22 Ques&ons? Please me at:

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