Cloud Computing An IDC Update

(1)

Cloud Computing 2010

An IDC Update

Frank Gens, Senior Vice President & Chief Analyst

Robert Mahowald, Research Director, SaaS & Cloud Services

Richard L. Villars, Vice President, Storage Systems & Executive Strategies David Bradshaw, Research Manager, Applications and Solutions, EMEA Chris Morris, Research Director, Services Research, Asia/Pacific

IDC Executive Telebriefing 29 September 2009

(2)

Description:

Cloud Services: Global Overview is IDC’s unique program that gives the "rolled-up" view of

the entire opportunity for IT Cloud Service provision. This program will provide the complete Cloud services opportunity segmentation by 3 regions and by technology segment (7-10 Black Book segment level). For further drill down please see specific market programs. It will provide survey data on:

 How quickly Cloud Services will be adopted and by which customer segments

 How Cloud will impact vendor business models and service offerings

 Will examine the customer benefits and challenges surrounding Cloud Services

Coverage:

 An IT Cloud Services Forecast, consisting of 7-10 Black Book-level categories

(Servers, Storage, Apps, etc), with a 3-region split (EMEA, Americas, Asia Pacific), and an enterprise size split (large, medium, small)

 IDC’s Cloud definition and taxonomy

 Cloud user survey findings and spending intentions

 Vendor Cloud strategy briefs driven by events, announcements

 Industry structure/model scenarios, predictions - focused on mega-shifts IDC sees in industry structure, strategies and other topics

Lead Analysts: Frank Gens, Robert Mahowald, Rick Villars

Regional Associates: Chris Morris (AP), Satoshi Matsumoto (Japan), Vladimir Kroa (CEE), David Bradshaw & Chris Ingle (W. Europe), Lidice Fernandez (Latin America)

Cloud Services

Global Overview

(3)

Cloud Services

Definition

- updated

Consumer and Business products, services and solutions

delivered and consumed in real-time over the Internet

Cloud Services

“casual description”

 Shared, standard service – built for a market (public), not a single customer  Solution-packaged – a “turnkey” offering, integrates required resources

 Self-service – admin, provisioning; may require some “on-boarding” support  Elastic scaling – dynamic and fine-grained

 Use-based pricing – supported by service metering

 Accessible via the Internet/IP – ubiquitous (authorized) network access

 Standard UI technologies – browsers, RIA clients and underlying technologies

 Published service interface/API – e.g., web services APIs

Key

Attributes

(4)

Cloud Services

Definition

- updated

Consumer and Business products, services and solutions

delivered and consumed in real-time over the Internet

Cloud Services

Public - open to a largely unrestricted universe of potential users; designed for a market, not a single enterprise

Private - designed for, and access restricted to, a single enterprise (or

extended enterprise); an internal shared resource, not a commercial offering; IT Org is the “vendor” of the shared/std service to its users

Deployment

Models

[Note: large gray zones between these two broad categories]

 Shared, standard service – built for a market (public), not a single customer  Solution-packaged – a “turnkey” offering, integrates required resources

 Self-service – admin, provisioning; may require some “on-boarding” support  Elastic scaling – dynamic and fine-grained

 Use-based pricing – supported by service metering

 Accessible via the Internet/IP – ubiquitous (authorized) network access

 Standard UI technologies – browsers, RIA clients and underlying technologies

 Published service interface/API – e.g., web services APIs

Key

Attributes

(5)

IT Cloud Services Taxonomy

Cloud

Applications

(Apps-as-a-service)

Cloud

(Application)

Platforms

(Platform-as-a-Service)

Cloud

Infrastructure

(Infrastructure-as-a-Service) App Deploy

IT Cloud Services

App Dev/Test

(6)

All Types

of IT Software & Hardware

Are or Will Be Offered as Cloud Services…

Application Development Software Application Server Middleware Data Access, Analysis, and Delivery Information & Data Management

Integration & Process Automation Middleware Other Application Dev and Deployment

Quality & Life-Cycle Tools Enterprise Portals

Servers Storage Networks Clients

System and Network Management Software Security Software

Storage Software System Software

Collaborative Applications Content Applications

Enterprise Resource Management Applications Supply Chain Management Applications

Operations and Manufacturing Applications Engineering Applications

Customer Relationship Management Applications

Cloud

Applications

Cloud

(Application)

Platforms

(Platform-as-a-Service)

Cloud

Infrastructure

(Infrastructure-as-a-Service) App Deploy

IT Cloud Services

App Dev/Test

App Dev & Deployment Systems Infrastructure Software Systems Storage (Sof tw are -as -a -Ser v ice) Applications Corresponding Primary Market IDC IT Product Taxonomy …many IT and Network Services will also be transformed and extended to support

the cloud service delivery model…

(7)

Cloud Services

Beyond

the IT Industry

Cloud

Applications

Cloud

(Application)

Platforms

Cloud

Infrastructure

(Infrastructure-as-a-Service)

App Dev/Test App Deploy

The IT Industry’s

Cloud Services

Cloud

Business

(Process-as-a-service)

Every

Other

Industries’

Cloud Services

(8)

IT’s Cloud

Opportunities

Landscape

Provide IT Products/Services to enable (public & private) Cloud SPs

“arms dealer”

Provide Services around IT Cloud Services Provide IT as Cloud Services S e rv e rs S to ra g e Net wo rk E q u ip m e n t IT /Ne two rk M a n a g e m e n t S o ft wa re Net wo rk S e rv ic e s A p p Dev e lo p m e n t/ Dep lo y m e n t S o ft wa re IT S e rv ic e s – Co n s u lt in g , In te g ra tio n , etc.

IT &

Network

Svcs

Telcos

Pureplay

Cloud

HW & SW

Vendors

(9)

Cloud User Surveys -

Benefits

Q: Rate the

benefits

commonly ascribed to the 'cloud'/on-demand model

Source: IDC Enterprise Panel, 3Q09, n = 263, September 2009

(Scale: 1 = Not at all important 5 = Very Important)

54.0% 63.9% 64.6% 67.0% 68.5% 75.3% 77.7% 77.9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Seems like the way of the future Sharing systems with partners simpler Always offers latest functionality Requires less in-house IT staff, costs

Encourages standard systems Monthly payments Easy/fast to deploy to end-users

(10)

Cloud User Surveys -

Challenges

Q: Rate the

challenges/issues

of the 'cloud'/on-demand model

(Scale: 1 = Not at all concerned 5 = Very concerned)

76.0% 76.8% 79.8% 80.2% 81.0% 82.9% 83.3% 87.5% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Not enough ability to customize Hard to integrate with in-house IT Bringing back in-house may be difficult Lack of interoperability standards On-demand paym’t model may cost more Performance Availability

(11)

Cloud User Surveys –

Adoption

Areas

(Scale: 1 = Very Unlikely 5 = Very Likely)

Q: Rate your

likelihood to pursue

the cloud model for the following

48.6% 49.1% 49.8% 50.6% 51.3% 52.9% 54.8% 55.1% 55.6% 59.4% 66.9% 67.3% 0% 10% 20% 30% 40% 50% 60% 70% 80% IT/Information Security Application dev/test/deploy platform

Business Intelligence/Analytics Server capacity on demand

IT Management software Storage capacity on demand Data/Content Distribution services

Personal productivity apps Business apps (CRM, HR, ERP) Data Back-up or Archive services

Web applications/Web serving Collaboration applications

(12)

Cloud User Surveys –

Vendor Requirements

(Scale: 1 = Not at all important 5 = Very Important)

Q: How important is it that

cloud service providers

…

72.9% 78.3% 79.2% 81.0% 82.1% 84.5% 86.0% 87.8% 88.6% 91.6% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Have local presence, can come to my offices

Are a technology and business model innovator Offer both on-premise and public cloud services

Support many of my IT needs Allow managing on-premise & cloud together

Understand my business and industry Provide a complete solution Option to move 'cloud' offerings back on premise

Offer Service Level Agreements (SLAs) Offer competitive pricing

(13)

IT Cloud Services Forecast

Update

(preliminary)

Applications

49%

App

Dev/Deploy

10%

Storage

9%

Servers

12%

Infra-structure

Software

20%

Applications

38%

App

Dev/Deploy

13%

Storage

14%

Servers

15%

Infra-structure

Software

20%

**Worldwide IT Cloud Services Revenue* by Product/Service Type**

* Includes revenue from delivery of Applications, Application Development & Deployment Software, Systems Infrastructure Software, Server capacity and Disk Storage capacity via the Cloud Services model; AD&D excludes online B2B messaging

2009

$17.4 billion

2013

$44.2 billion

(14)

Cloud Services as a

% of IT

Worldwide IT Spending by Consumption Model

IT Cloud Services On-Premise IT

5%

10%

CAGR 26% 4% 44 17 0 100 200 300 400 500 600 2009 2013 W orldw ide IT Spending ($ billion) 359 416

(15)

Cloud Services

Growth

Impact

460.4 433.1 430 435 440 445 450 455 460 465 470 475 480 485 2012 2013 W orldw ide IT Spending ($ billion)

Net new IT growth = $27.3 billion

IT Cloud

IT Cloud Services growth Traditional IT product growth

27%

73%

Source: IDC, September 2009

Sources of Incremental IT Spending Growth in 2013

(16)

Cloud’s Position in

Asia/Pacific

8% 18% 22% 25% 17% 10%

What is your opinion of the current

state of cloud computing?

It is mostly vendor hype

Just renaming of an old concept

Too immature at this point to judge

Interesting concept but would be resisted by my company

Very promising but not enough services available A very exciting

opportunity

• Familiarity is high

• But opinion is low!

(17)

Cloud’s Position in

Europe

Survey: % of respondents in country/region using 7 or more IT cloud services*

Source: IDC European Enterprise Services Survey 2009, n = 533

* Survey list of cloud services included: email/calendar, financials, app dev, collaboration, CRM, HRM, security, office productivity, storage/backup, app platform

0% 2% 4% 6% 8% 10% 12% 14%

(18)

Upcoming IDC Cloud

Research Plans

Cloud Landscape

Cloud Services: Global Overview - NEW

Asia/Pacific Cloud Services and Technologies - NEW

Central and Eastern European Cloud, Hosting and Outsourcing Services

United States SaaS and Cloud Services Spending by Vertical 2009 (special report) - NEW

Cloud Software/Apps

SaaS and Cloud Services

European SaaS and Cloud Services

Le Marché du Software as a Service (report - France) Japan SaaS and Cloud Services

Business Analytics Solutions

European Business Analytics Markets & Strategies Software Pricing & Licensing

Cloud (application) Platform

Application Development & Deployment and Cloud Services Application Life-Cycle Management

(19)

Upcoming IDC Cloud

Research Plans

Cloud Infrastructure

Enterprise System Management Security Services

Security Products

Storage Solutions: Storage and the Cloud (report series) - NEW Servers in the Cloud (special report) - NEW

Services around Cloud Services

SOA and Cloud Services: The Professional Services Opportunity WW Consulting & System Integration Services

IT Education & Certification

ICT Offerings for Cloud SPs

Datacenter Networks NGN Operations

Storage Solutions: Storage and the Cloud - NEW Servers in the Cloud (special report) - NEW