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THINKstrategies

Strategic Consulting Services

Cloud Computing:

Destiny or Dis-Intermediation

Presented by,

Jeffrey M. Kaplan

Managing Director

THINKstrategies

[email protected]

781-431-2690

(2)

Agenda

Changing Customer Requirements

Shifting Competitive Landscape

Defining Terms, Dispelling Myths

Business Implications

(3)

Today‟s Perfect Storm

Macro-Market

Trends

Enabling

(4)

Key Macro-Market

Challenges

Economic Uncertainty

Key Challenges

Escalating Expectations

Changing

(5)

Deployment Challenges

31.1% of SW projects cancelled before completed.

52.7% of projects cost nearly 190% of original

estimates.

Operational Costs

Maintenance & management costs=>10x license fee.

Escalating hardware & staff support costs.

Over provisioning and under-utilization of SW licenses

Economic/Budgetary Pressures

Need to reduce IT costs and increase business benefits.

Need to increase utilization to gain greater ROI.

The Shortcomings of

(6)

On-Demand Has Become

Mainstream

(7)

The New Generation Thinks &

Communicates Differently

(8)

Changing Customer

Expectations

Old,

Fixed, Capital Investment

Complexity, Customization

High TCO, Uncertain ROI

Internal Support

Limited Visibility

Outsourcing Alternatives

New,

Flexible, Operating Expense

Simplicity, Utilization

Rapid Time-to-Value

Vendor Management

More Analytics

(9)

SaaS

Cloud

Computing

Managed

Services

Out-Tasking

Alternatives

Inter-Related

Out-Tasking Alternatives

(10)

An Historical Perspective

Facilities

Mgmt

Outsourcing

ASPs/MSPs

SaaS/Cloud

Computing

Market

Penetration

Year

1970

1980

1990

2000

2010

(11)

Defining SaaS

Services-Oriented Applications

One-to-Many Software Design

Network-Based Delivery

User-Centric Process Orientation

Rapid Deployment/Self-Provisioning

Built-In, Real-Time Analytics

Continuous Enhancements

Subscription-Pricing

(12)

How SaaS & ASP/Hosting

Differ

Customer

Application

ASP/Hosting

Company

Same legacy applications

Upfront perpetual license

Still inflexible architecture

Limited accessibility

(13)

Enabling Technologies

Broadband networks

Grid computing

Blade technology

Virtualization

Security

Web services & APIs

Service management

(14)

Multi-tenant SaaS Uses

Common, Scalable Code

SaaS

Vendor

(15)

SaaS Adoption

Beyond a Tipping Point

2007

32%

2008

62%

% of

Respondents

Using SaaS

(16)

Customer Satisfaction,

Renewal & Referral Rates

(17)

Shifting Adoption Patterns

Unilateral End-User,

SBU Adoption of

SaaS Solutions

Enterprise-Wide

Acceptance and

Adoption of SaaS

(18)

Recent Mega-Deals

= 500,000 suppliers

= 420,000 end-users

“We evaluated a number of alternatives, but Aravo SIM was the best commercially-available solution

capable of meeting our complex, global needs” - SVP and CIO of GE

"The Enterprise Cloud Computing business model is a strategic direction for

us. It not only lowers IT costs, and creates faster end to end processes, but

can also grow with our requirements both globally and locally.“

(19)

New Government View

“I’m all about the cloud computing notion. I look at my lifestyle,

and I want access to information wherever I am. I am killing

projects that don’t investigate SaaS first.”

(20)

RightNow Secure Cloud

DoD, GSA, and the Agency for Healthcare Research and Quality

(AHRQ) using RightNow’s Secure Government Cloud.

DoD deployments include,

U.S. Air Force Personnel Center (AFPC)

Medical Education and Training Campus (METC)

AHRQ can:

Support 30 web resources and Health IT projects

Manage incoming web inquiries, reducing demand on agents

Provide constituents with a central, self-learning knowledge base

Encourage dialogue with consumers, researchers, clinicians,

educators, employers, and providers on health care issues

Facilitate technical assistance questions

Quickly add content, resources or the latest research on website

(21)

LA-Google Story

$7.25 million deal

Google Apps serving 34k employees

Replaces Novell GroupWise

Deployment and support provided by CSC

Privacy clause,

Includes provision providing the city with unlimited damages

if its nondisclosure agreement (NDA) is breached by Google.

>50 state county/local agencies in CA have asked Los

Angeles for information about its agreements

> 20 government agencies outside of CA have sought

(22)

Market Adoption Forecast

Market

Penetration

2012

2010

2008

2006

Innovators

Early Adopters

Mainstream Buyers

Laggards

(23)

SaaS Expands from Front- to

Back- to Inter-Office Apps

BUSINESS APPLICATIONS

Collaboration

CRM/SFA

Procurement

Supply-Chain

ERP

Finance

Front Office

Inter-Enterprise

Back Office

(24)

Top Ten Showplace

Application Categories

Customer Relationship Management

103

Collaboration

80

Accounting/Financial

78

Document Management

67

Project Management

62

Enterprise Resource Planning (ERP)

55

Marketing

49

Human Resource Management (HRM)

47

eCommerce

46

Messaging

44

Source:

SaaS

Showplace

(25)

SaaS Expands from Business

Apps to IT Management

BUSINESS APPLICATIONS

Collaboration

CRM/SFA

Procurement

Supply-Chain

ERP

Finance

Front Office

Inter-Enterprise

Back Office

Security

Systems Mgmt

Network Mgmt

Remote Access

Data Protection

Storage

IT Management

(26)

Why IT Is Attracted to SaaS

Most IT organizations spend 75-80% of their time reacting to

problems, keeping systems and software up and running.

They would prefer to focus on more strategic business

initiatives.

(27)

Traditional NSM = ERP of the IT World

Too complicated

Too expensive

Too time-consuming

Too ineffective

>100 IT/Application Mgmt solutions on the SaaS Showplace.

SaaS Penetrating IT

Management Market

(28)

Managed Services/SaaS

Convergence

(29)

Managed Services vs. SaaS

Managed Services

Provider assumes

management responsibility

Sold on an per device basis

Focus on network/system

availability & performance

SaaS

Provider delivers software

functionality

Sold on a per user basis

Focus on application

availability & performance

Quicker Time-to-Value

Lower TCO/Higher ROI

(30)

Moving from SaaS Apps to

Cloud Computing

Cloud Computing

Services

SaaS Apps

“Top Strategic

Technology for

2010”

But what

does “cloud

computing”

mean?

(31)
(32)

Where are the Channel

Opportunities in the

(33)

Traditional Role of

Channel Partners

Satisfy specific user requirements and

vertical market needs

Address technical complexities & provide

specialized skills,

Planning, Design, Integration, Management,

Training & Support Skills

Extend sales reach/functional capabilities

Expand addressable market opportunities

(34)

Does SaaS/Cloud =

Disintermediation?

Direct Sales/Delivery Model

Focus on Simplification/Ease-of-Use

Automated, Self-Provisioning Capabilities

Ease of Deployment/Configuration

Emphasis on Time-to-Value

Business vs. Tech Support Requirements

Lower Price Points/Tighter Margins

(35)

Good News

SaaS vendors seeking channel partners to,

Extend reach

Create industry-specific solutions

Cloud computing is creating confusion

Vendors need help packaging raw capabilities

Users need help understanding and

(36)

Why the time is right for the

Channel in SaaS

SaaS has gained mainstream acceptance, less education required.

SaaS vendors perfecting direct selling strategies/techniques.

Continued growth requires greater vertical market penetration.

Expanding market penetration requires industry-specific skills.

Economically extending market reach requires third-party channel

partners w/‘trusted’ relationships.

Establishing new channel relationships accelerates market growth.

Existing and emerging players hungry for new channels to market.

(37)

SaaS Expands from Business

Apps to Industry Solutions

BUSINESS APPLICATIONS

Collaboration

CRM/SFA

Procurement

Supply-Chain

ERP

Finance

Front Office

Inter-Enterprise

Back Office

Financial Services

Retail

Manufacturing

(38)

Key Customer Concerns

Concerns,

Reliability

Security

Customization

Compliance

Integration

Customer Support

(39)

Clouds Come

In Many Forms

Public Clouds

Private Clouds

Hybrid Clouds

Internal Clouds

(40)

Users Must Solve

Cloud Complexities

(41)

Channel Opportunities

Geography-Specific

Relationships

Consulting Opportunities

Customer Support

Training

Industry-Specific

Solutions

(42)

Helping Customers Find

the Right Balance

Help make cloud computing

location-independent.

Help select the right choices.

Help integrate on-demand/

on-premise solutions.

(43)

Design, Deliver & Manage

Private Clouds

Benchmark Market Leaders

Amazon

Facebook

Google

Salesforce.com

Adopt Industry Best Practices

Standardization

Simplification

Automation

Agility

(44)

Benefits of

SaaS/Cloud-Enabled Channel Companies

Lower Upfront Costs

Easier Deployment

Quicker Time-to-Value

Lower Total Cost Of Ownership (TCO)

Higher Return on Investment (ROI)

Greater Flexibility and Agility

(45)

Customer

Experience

Added Dimension of SaaS

and Cloud Computing

Communications

Collaboration

(46)

A New Level of Value

in the SaaS Market

Dynamic clearinghouse of solutions

Continuous updates, new ideas

Real-time, aggregated data

Meaningful benchmark studies

Practical best practices forums

Build a “club”, gain a competitive

(47)

How You Can

Capitalize on the Cloud

Augment internal operations

Test new applications/services

Handle spikes in demand

Expand service portfolio

Broaden partner relationships/

(48)

Platforms-as-a-Service

(PaaS)

Social

Applications

Enterprise

Applications

Web

Applications

App Engine

S3 & EC2

CPU and

Storage

(49)

New Breed of VARs

and Consultants

(50)

New Channels

to Market

Banks

Insurance Companies

Retailers

Web companies

PS Firms

(51)

On-Demand Services &

The IT Industry Inversion

Services

Technologies

Past

Future

The

IT Industry

Inversion

(52)

Key Challenges Facing

Established Vendors

Re-architecting applications

Re-structuring revenue models

Repositioning marketing

Re-orienting sales/support staff

Surviving market shakeout

(53)

Common Pitfalls

Balancing,

Multiple Offerings

Various Delivery Models

Competing Buyers

Conflicting Sales Channels

Varying Compensation Plans

Differing Revenue Recognition

(54)

Shift from Selling Boxes to

Business-Oriented Services

(55)
(56)

Transform Firefighters

to Business Consultants

(57)

Provide Insight,

Not Data

(58)

Building Proper Target

Market Segmentation

Size

of

Accounts

Network Infrastructure

Data Centers

Desktop Computing

Mobility

Business Applications

Functional

Layer

Service

Levels

Deployment & Integration

Maintenance & Refresh

Monitoring & Management

Planning & Design

Security

Vertical

Markets

(59)

The Circles of Success

Core Functionality

Platform

Specialized Skills

Ecosystem

Community

Platform

Specialized Skills

Ecosystem

Community

(60)

Change Your Business

IT

Services

Business

Services

Information

Services

(61)

Implementation/Maintenance Services

Multivendor Integration Services

Managed Services

Consulting Services

IT/BPO

Tactical

Strategic

Supplier

Transformer

Raising Your Value

(62)

Goal: Changing the

Vendor/Customer Relationship

Direct vendor/user connection

Greater customer insight

Ongoing feedback

Real-time analytics

Aggregated user data

Operational benchmarks

Continuous enhancements

(63)

The Key to Success

Selling and Retaining Trust Is Your

Strongest Competitive Advantage!

(64)
(65)

For More Information…

www.SaaS-Showplace.com

www.thinkstrategies.com

[email protected]

References

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