The Cloud Value Chain Exposed

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1 The Cloud Value Chain Exposed Swiss View on Cloud Market 1

2 Early Adoption Dynamics open the door to Enterprise Cloud Computing Early Adoption Dynamics Led by Simple Business Process Bottlenecks Development Agile Infrastructure Requirements Next Gen Workplace Desktop, UC&C, Office Apps Web Presence Launch, Campaign, Market Big Data & Simulations Improve Data Analysis IT Efficiency Manage Workloads & Regain Control over IT Transformational CIO led Source: Cisco IBSG Hypothesis

3 Industry Value Chain Complex Variety of Cloud Delivery Models Cloud enablers (BMC, Red Hat, Joyent, Vmware) IDE (JBoss), databases, web, app servers s (Microsoft, SAP, Oracle, others) SaaS PaaS SaaS End user (Enterprise) IaaS SaaS Hosted AM Colo IaaS PaaS Source: Cisco IBSG 2011; 3

4 Industry Value Chain Cloud will Disrupt on Six Battlefields Cloud enablers (BMC, Red Hat, Joyent, Vmware) 2. Development Platforms SaaS at the Core of the Cloud PaaS is Winning Hearts of Web Developers PaaS 1. SaaS will Further Disrupt the ISV Landscape Mobile Accelerates SaaS Adoption IDE (JBoss), databases, web, app servers s (Microsoft, SAP, Oracle, others) SaaS End user (Enterprise) IaaS 3. IaaS: Web Grade vs. Enterprise Grade Battle Rages across Hosted & Internal IaaS SaaS Synaptic Hosting Dynamic Computing Hosted AM Colo IaaS 4. & Infra Trends: Often Forgotten Fundamentals Mega PaaS Exchanges & On-Net Clouds 5. Commercial Services Everybody wants to be a Cloud Broker 6. Professional Services Will move to Services with Higher Value Add Source: Cisco IBSG 2011; 4

5 1 SaaS will Further Disrupt ISV Landscape Mobile Accelerates SaaS Adoption SaaS Disruptive in 25% of S/W Markets Tablets Will Accelerate Adoption Previous mobile limitations Notebook complexities Small screens Previous tablet offerings failed Tablets change the rules Ease of use Visually appealing Comprehensive development platform Mobile will become the new platform for business intelligence. Howard Dresner, Dresner Advisory Services Source: Forrester Source: OCO Business Analytics OCO and Mobile BI When we assess new SaaS applications, our first and most important filter is mobility. My end users demand application access from mobile devices. CTO of IT, Large Car Manufacturer Source: Cisco IBSG 2011; 5

6 3 IaaS: Web Grade vs. Enterprise Grade Battle Rages across Hosted & Internal IaaS Internal Enterprise-grade cloud Enterprise-grade IaaS (Virtual) private cloud Enterprise-grade Contract VMware Commercial ITSM SAN / NAS IaaS-type / architecture Internal commodity cloud Public IaaS Web-grade Credit card Xen / KVM Open Source DAS Internal (Owned & managed in house) IaaS model / ownership Hosted (Owned & managed by third-party) Source: Cisco IBSG 2011, IDC, Tier 1; 6

7 3 IaaS: Web Grade vs. Enterprise Grade Enterprise Grade in Pursuit of Web Grade IaaS Internal Enterprise-grade cloud 3 Enterprise-grade IaaS (Virtual) private cloud 2 2 Enterprise Grade Cloud will attract increasingly critical workloads 3 Internal commodity cloud Public IaaS 1 3 Standardization of IaaS Platforms will enable Hybrid Cloud Computing 1 Maturing IaaS Enablement Platforms accelerate cloud entry of 30k+ Web Hosting companies Deploy workloads across internal and public cloud Open source has momentum Acquisitions drive standards Investments: raising funds $21M $26M $85M Note: *Forrester definitions do not map 1-to-1 to our Public and Internal Cloud definition Private Cloud only includes Infrastructure Virtualization Software Source: Cisco IBSG 2011; Morgan Stanley 2011 Cloud Computing Takes Off; IDC 2010; Forrester 2011 Sizing the Cloud 7

8 6 Professional Services Will Move to Services with Higher Value-Add Professional Services Business services IT services Ops. process consulting Enterprise architecture design / transformation IT strategy consulting Consult / Plan Positive Professional IT services will move toward higher value-add services Business process design / transformation services App development App testing services Architect / Plan Short-term positive, long-term negative integration App integration Implement / Integrate Negative Business process management Standard BPO App management App hosting Risk / compliance Security services Run / Manage Neutral It takes a lot of expertise to be successful with vertical workloads. We aim to become the cloud provider of choice for energy companies, because we know the industry and we know Smart Grid. CTO, Large Manufacturer Source: IT Services Taxonomy from Forrester, Assumptions about impact by IBSG 2011; 8

9 Main Takeaways / Discussion Network Service Providers have different ways of attacking the Cloud Market NSP GTM Approach Telco-Centric SaaS incl. Comms, Collaboration, Security, VDI Main Takeaways from The Cloud Value Chain Exposed Mobile access accelerates SaaS Adoption Focus on quality to differentiate against over-the-top plays Cloud Aggregation & Brokerage linked to Telco-centric Managed Svcs Use commercial brokerage platforms to launch quickly Use unique NSP assets (QoS, channels, Telco, Billing) Commodity Infrastructure Services with Platform-as-a-Service Support Enterprise Grade Infra Services with Developer Enablement Vertical Business Process Svcs with platform ready for BPaaS Standardization will drive Hybrid Cloud: don t be niche Build PaaS partnerships to attract developers Build or acquire IT Services & Sales capabilities Provide tools to enable developers Differentiate through end-to-end WAN-IT: On-Net Cloud Consider partnerships with SI s Embedding communications can add value: CEBP Network as a Service Enrich network to better serve cloud Unclear monetization models, the market opportunity is hard to size Focus on standards across geographies Source: Cisco IBSG

10 Thank you. Additional Resources IBSG Whitepaper: The Cloud Value Chain Exposed IBSG SP Cisco Web Page with Whitepaper and Cloud Insights Cisco Cloud Pages

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