Cloud Computing in the Czech Republic

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1 Cloud Computing in the Czech Republic George Feuerlicht, Lukas Burkon and Nikos Margaris Cloud Computing Research Group Prague University of Economics

2 Cloud Computing Research Group l Objectives l Improve understanding of cloud computing issues l Development of adoption guidelines l Study of Enterprise Architectures for cloud computing l Research Projects l Cloud computing adoption and governance: Models and Guidelines - IG (2010) l Enterprise Architecture for Cloud Computing Environments, GACR P403/11/0574 ( ) Copyright CCRG Cloud Computing in the Czech Republic 2

3 Outline l Cloud Computing Predictions l Cloud Computing Benefits and Challenges l Results of Cloud Computing Surveys l Conclusions Copyright CCRG Cloud Computing in the Czech Republic 3

4 What are the Analysts Saying? l Cloud computing is becoming a strategic priority for most executives [Ovum 2011] l 38% of business executives make cloud computing a high or critical priority and 18% have budget allocation for cloud computing services [CIO Magazine] l Worldwide SaaS revenues in 2011 to reach $10.7 billion, a 16% increase from 2010 [Gartner] Copyright CCRG Cloud Computing in the Czech Republic 4

5 Cloud Computing Predictions l Worldwide revenue from public IT cloud services to reach $55.5 billion in 2014, representing a compound annual growth rate of 27% [IDC] l Global cloud computing market to grow from $37.8 billion in 2010 to $121.1 billion in 2015 at a compound annual growth rate of 26% with SaaS accounting for 73% of the market s revenues 2010 [MarketsandMarkets.com] Copyright CCRG Cloud Computing in the Czech Republic 5

6 Cloud Computing Predictions.. l 59% of surveyed organizations regard cloud computing as the future of IT and 45% of organizations are already using cloud computing services [KPMG] l Most organizations (39%) are using application hosting services, followed by data storage (32%) and and messaging services (29%) [KPMG] Copyright CCRG Cloud Computing in the Czech Republic 6

7 Cloud Computing Benefits [A View of Cloud Computing, Armbrust et al., 2010] l Reduced cost minimal up-front cost l Predictability of costs pay-as-you-use l Rapid Implementation l Elasticity up and down scalability l Short-term renting of computing resources l Responsibility for operation and upgrades transferred to the provider l Reduced demand on skills and IT staff l Enables new innovative solutions Copyright CCRG Cloud Computing in the Czech Republic 7

8 User Concerns [IDC, 2010] l Security (87% of respondents) l Service availability (83% of respondents) l Performance (83% of respondents) l Higher costs (when compared to on-premise implementation) (81% of respondents) l Lack of interoperability standards (80% of respondents) l Data lock-in (80% of respondents) l Difficult integration (77% of respondents) l Limited customization (76% of respondents) Copyright CCRG Cloud Computing in the Czech Republic 8

9 Some Issues with Surveys l Cloud computing encompasses a wide spectrum of solutions and is difficult to define (data storage and hosting services vs multitenant SaaS applications) l Results of different surveys are difficult to compare and sometimes not easy to interpret l Private and public clouds are associated with different benefits and have different adoption characteristics Copyright CCRG Cloud Computing in the Czech Republic 9

10 Cloud Computing Definition Cloud Computing involves the delivery virtualized IT resources as services over the Internet. Cloud Computing services are delivered in a scalable and secure manner from a remote data center on a pay as you use basis, and are categorized into infrastructure services (IaaS), platform services (PaaS) and software services (SaaS). [public clouds only] Copyright CCRG Cloud Computing in the Czech Republic 10

11 CCRG Surveys in 2011 June (97 respondents) [N. Margaris DP] November (105 respondents) [CSSI/CW/CACIO] Copyright CCRG Cloud Computing in the Czech Republic 11

12 June 2011 survey [N. Margaris DP] l 97 respondents l Mainly SMEs ( employees) l > 5 years of operation l Mostly local Czech organizations l Mainly manufacturing and construction l Only about 7% use cloud computing services Copyright CCRG Cloud Computing in the Czech Republic 12

13 Barriers to adoption legal issues slow response rate service availability possible lost of control over IT resources IT governance issues data security and privacy issues high cost 0% 10% 20% 30% 40% 50% 60% Copyright CCRG Cloud Computing in the Czech Republic 13

14 November 2011 survey [CSSI, CW and CACIO] l 105 respondents l 50% of large organizations (>250 employees) l > 5 years of operation l About 50% international organizations l 30% ICT and 25% manufacturing and construction l Almost 60% use some type of cloud service Copyright CCRG Cloud Computing in the Czech Republic 14

15 Size of organizations 250 and more employees employees 1 49 employees 0% 10% 20% 30% 40% 50% 60% Copyright CCRG Cloud Computing in the Czech Republic 15

16 Years of operation 5 years and more 2-5 years less than 2 years 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Copyright CCRG Cloud Computing in the Czech Republic 16

17 Industry sector 35% 30% 25% 20% 15% 10% 5% 0% agriculture, forestry, fishing mining industry production, manufacturing, construction business travel services transport and logistics ICT financial services real estate governement education healtchcare other Copyright CCRG Cloud Computing in the Czech Republic 17

18 Size of IT department 25 and more employees employees 1-9 employees IT services are provided by third party (outsourcing) 0/no IT departement 0% 10% 20% 30% 40% 50% 60% 70% Copyright CCRG Cloud Computing in the Czech Republic 18

19 International vs local branch of international company domestic (Czech) company with branches abroad domestic (Czech) company 0% 20% 40% 60% 80% 100% Copyright CCRG Cloud Computing in the Czech Republic 19

20 Cloud Computing Adoption don't use cloud services use cloud services 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Copyright CCRG Cloud Computing in the Czech Republic 20

21 Motivations for adoption other security rapid deployment flexibility IT business alignment IaaS Paas SaaS elasticity and scalability cost reduction 0% 5% 10% 15% 20% 25% 30% 35% 40% Copyright CCRG Cloud Computing in the Czech Republic 21

22 Adoption Issues Before adoption After adoption lack of suitable services lack of suitable services limited integration options limited integration options limited customization options limited customization options legal issues legal issues possible dependence on provider slow response rate IaaS Paas possible dependence on provider slow response rate IaaS Paas service availability SaaS service availability SaaS possible lost of control over IT resources possible lost of control over IT resources IT governance issues IT governance issues data security and privacy issues data security and privacy issues high cost high cost 0% 10% 20% 30% 0% 10% 20% 30% Copyright CCRG Cloud Computing in the Czech Republic 22

23 SaaS adoption trends 25% 20% 15% used during last 12 months 10% currently using planing to use over next 12 months 5% 0% Copyright CCRG Cloud Computing in the Czech Republic 23

24 PaaS adoption trends 14% 12% 10% 8% 6% 4% used during last 12 months currently using planing to use over next 12 months 2% 0% Force.com Microsoft Azure Google App Engine AWS Elastic Beanstalk ZOHO Creator Heroku PHP Fog Copyright CCRG Cloud Computing in the Czech Republic 24

25 IaaS adoption trends database storage planing to use over next 12 months currently using used during last 12 months virtual servers 0% 5% 10% 15% 20% 25% Copyright CCRG Cloud Computing in the Czech Republic 25

26 Cloud Computing adoption trend SaaS IaaS PaaS used during last 12 months currently using planing to use over next 12 months Copyright CCRG Cloud Computing in the Czech Republic 26

27 Barriers to adoption lack of suitable services limited integration options limited customization options legal issues slow response rate service availability possible lost of control over IT resources IT governance issues data security and privacy issues high cost 0% 10% 20% 30% 40% 50% 60% 70% 80% Copyright CCRG Cloud Computing in the Czech Republic 27

28 Conclusions l Major shift in enterprise computing paradigm is taking place at present leading to redistribution of responsibilities over IT infrastructure and services l New innovative applications are available only as cloud services l Cloud computing presents significant opportunities and challenges for organizations Copyright CCRG Cloud Computing in the Czech Republic 28

29 Conclusions l SaaS, IaaS and PaaS have different adoption rates and business benefits l Adoption rates vary according to l company type l company size l industry sector l territory Copyright GF2011 Systems Integration

30 Conclusions l Adoption of cloud services in CR is growing steadily l Need to improve awareness of available cloud computing services l Need for adoption guidelines for organizations of different size and industry sector l Collaboration opportunities between universities and industry practitioners Copyright CCRG Cloud Computing in the Czech Republic 30

31 Copyright CCRG Cloud Computing in the Czech Republic 31

32 Cloud Computing Definition (NIST) Cloud computing is a pay-per-use model for enabling available, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. [The National Institute of Standards and Technology (NIST), Information Technology Laboratory] Copyright CCRG Cloud Computing in the Czech Republic 32

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