IT as a Service Determining Application Workload Best Execution Venues
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1 IT as a Service Determining Application Workload Best Execution Venues JULY 17, 2014 Carl Brooks, Analyst, Infrastructure Services Steve Carter, VP, 451 Advisors
2 Company Overview 290+ Staff Syndicated research, certification, accreditation, and advisory services Global Events 1,500+ client organizations: enterprises, vendors, service providers, and investment firms Organic and growth through acquisition 2
3 Independent Trusted Digital Infrastructure Advisors to World Class organizations Experts in Infrastructure Planning including Data Center Capacity Planning and Cloud Transformation Services delivered via Digital Infrastructure Road Map and Workshop products 3
4 Digital Infrastructure for the Digital Enterprise Business, technology and facilities are converging towards an integrated value delivery 4
5 Digital Infrastructure Venue Decisions Data, Decisions and Disruptive Trends Fixed vs. Variable Cost Requirements Effectiveness Impact of Disruptive Technology (Cloud) CAPEX Datacenter Owned vs. Third Party Modular Design Availability Everything as a Service Third Party Return on Investment Cost of Stranded Capacity Disaster Recovery OPEX Optimization Planning 5
6 IT as a Service: Best Execution Venues Thought Leadership Every Application has a best execution venue Some are mature, others are evolving All of it is headed toward the cloud Cloud computing is mainstream This means choice, access and diversity for IT Benefits are material- business drives choice of venue There are ways to systematically make the best choice of venue for each workload Enterprises are making these choices already Providers are/should be targeting these workloads and creating the venues This is a snowball effect across the IT landscape as cloud begets automation and automation begets growth 6
7 Best Execution Venue: Where is the best place to run a workload? External Public Cloud Servers and storage on demand (AWS, Rackspace) SaaS Applications on demand (Salesforce, Google Docs) Private Cloud We own(or pretend we own) the servers and storage (Cloudstack, OpenStack) Hybrid Private and public resources managed together as needed (RightScale, Dell) 7
8 Best Workload Execution Venue by Cloud Type BATCH COMPUTING A PPLICA TIONS 68% 14% 14% 4% BACK-OFFICE ENTERPRISE A PPLICA TIONS 53% 18% 9% 20% CUSTOMER -FACING ENTERPRISE A PPLICATIONS 53% 26% 13% 8% TEST AND DEVELOPMENT OF A PPLICA TIONS 42% 27% 27% 4% COLLABORATIVE A PPLICA TIONS 35% 17% 27% 19% E-BUSINESS HOSTING 18% 43% 25% 14% CLOUD-NA TIVE APPLICATIONS 11% 23% 37% 29% Private Cloud Hybrid Cloud External Public Cloud SaaS Q. For each of the following categories of workload/business functions, what is your primary deployment method likely to be in the next two years (internal private cloud, external public cloud, hybrid cloud, or SaaS)? n = 28 to 53 Source: Cloud Computing Wave 6
9 Cloud is disproportionately used for Servicing Consumer and Business Customers, Not Employees Cloud enables organizations to directly connect to customers Cloud-based environments are more likely to service users outside the company paywall Public and SaaS environments are more likely used for servicing consumer-driven apps The need for robust security around external users MATCHES the requirement that an internal IT department would deploy Who are the primary users of your applications? 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0% 1% 0% 0% 0% 13% 10% 15% 17% 14% 17% 20% 49% Overall n= % 13% 61% 13% 23% 48% 22% 25% 35% Traditional Hosted Public w/hoster Private Cloud n=675 n=360 n=359 18% 22% 45% SaaS n=621 Employees Businesses Consumers Business Partners Other C O M M I S I O N E D B Y M I C R O S O F T 9
10 The Growth for Hosting is Private Cloud IT Budget Allocations Today On-Premises, 41% Off-Premises, 59% 2 years On-Premises, 38% Off-Premises, 62% On Premises Infrastructure Deployment Off-Premises Deployment Hosted Deployment 100% 80% 60% 40% 20% 0% 26% 28% 31% 43% 37% Today 35% 2 Years Standalone Virtualized Private Cloud 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 32% 29% 30% 12% 17% 25% 14% 21% 9% 10% Today Colocation PaaS IaaS 2 Years Outsourcing SaaS 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 24% 25% 28% 32% 48% 42% Today Public Cloud Hosted Private Cloud Trad. Dedicated 2 Years 10
11 Hybrid Cloud What are the enablers of transformation? Best execution venue Dynamically orchestrated AND measured Costs, capabilities and capacities clearly understood 11
12 Worldwide Hosting & Cloud Market Size, Cloud Share Increases from 6.9% to 24.6% $US Millions $90,000 $80,000 $70,000 $60,000 CAGR 16% $50,000 $40,000 $30,000 $20,000 $10,000 $ Dedicated Hosting $3,078 $3,257 $3,468 $3,690 $3,922 $4,166 $4,421 Shared Hosting $8,584 $9,385 $10,455 $11,621 $12,888 $14,244 $15,689 Managed Hosting $12,808 $15,524 $18,931 $22,958 $27,655 $33,179 $39,648 Infrastructure as a Service $680 $1,572 $2,872 $4,475 $6,211 $8,152 $10,232 Platform as a Service $316 $618 $1,358 $2,232 $3,177 $4,244 $5,347 Infrastructure Software as a Service $695 $1,003 $1,422 $1,926 $2,536 $3,203 $3,914 Total Hosting + Cloud $26,162 $31,358 $38,507 $46,901 $56,389 $67,189 $79,251 CAGR 50% CAGR % 11% 21% 57% 60% 33% 20% 12
13 Business Demand Alignment to Digital Infrastructure Venues 13
14 Physical/Cost Impact on Digital Infrastructure Planning $16,500,000 per mw datacenter build cost (US average) 150 kw IT load miss = $2,475,000 ERROR Build = $360,000 / year ERROR COLO 14
15 Impact of Stranded Capacities and $ How do you currently deal with variable resource requirements due to randomness, time of day, and/or seasonal demand? Leverage Disaster Recovery 1% Outsource 2% External Cloud 2% No Variability 13% Hire Contractors 1% Other 5% Overprovision 61% Capacity Mgmt Tools Virtualization Load Balancing 26% Source: 451 Research 15
16 The Digital Infrastructure Journey: Deciphering, Defining and Measuring Success End State Goal is IT as a Service Delivery Model 16
17 Digital Infrastructure Metrics 17
18 Business Transactions per DI Dollar Comparison 18
19 Digital Infrastructure Roadmap 19
20 Complementary 451 Advisors Workshop 451 Research cordially invites you to a complimentary Digital Infrastructure for the Digital Enterprise workshop: Infrastructure as a Service: Determining Application and Best Execution Venues Date: Wednesday, August 13, 2014 Time: 9am - 12pm Location: Omni Parker House, 60 School St, Boston, MA RSVP Required. This is an exclusive workshop with very limited capacity. First come/first served. Send RSVP via to: Chris Hill, CMO, The 451 Group Chris.Hill@The451Group.com 20
21 Contacts Steve Carter Carl Brooks
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