IDC 1262
I D C S P O T L I G H T
S e r v i c e T r a n s p a r e n c y : A d o p t i n g a S t a n d a r d
A p p r o a c h f o r E v a l u a t i n g C l o u d S e r v i c e s
March 2012
Adapted from Worldwide and Regional Public IT Cloud Services 2011–2015 Forecast by Frank Gens,
Robert P. Mahowald, et al., IDC #228485 and Lessons from IDC's Cloud Leadership Forum 2011: Future-Proofing
The Cloud by Frank Gens, Robert P. Mahowald, et al., IDC #229249
Sponsored by Open Data Center Alliance
Cloud services represent an emerging model for online delivery of many different technology offerings, including compute and storage, application and middleware, and even professional services.
The cloud model goes well beyond prior online delivery approaches — combining efficient use of multitenant (shared) resources, self-service provisioning, highly elastic and granular scaling, flexible pricing, and broad leverage of Internet-standard technologies — to make offerings dramatically easier to acquire and consume and to provide value for buyers.
As a result, IDC forecasts significant growth in cloud services. Worldwide revenue from public IT cloud services exceeded $21.5 billion in 2010 and will reach $72.9 billion in 2015, representing a compound annual growth rate (CAGR) of 27.6%. This rapid growth rate is over four times the projected growth for the worldwide IT market as a whole. By 2015, one of every seven dollars spent on packaged software, server, and storage offerings will be through the public cloud model.
As cloud services gain momentum, however, both cloud providers and cloud subscribers can benefit from service transparency, which can allow providers to differentiate custom services while allowing subscribers to compare standard service offerings among providers. This IDC Spotlight examines the need for an industry-accepted service catalog of cloud offerings and discusses the role that the Open Data Center Alliance (ODCA) will play in the increasingly important cloud services market.
Introduction
Public cloud services are a huge driver of the IT industry. In 2015, public cloud services will account for 46% of net-new growth in overall IT product spending in five important categories of IT — applications, application development and deployment, systems infrastructure software, basic storage, and server infrastructure. For vendors, establishing a strong position in the public cloud right now is critically important.
For organizations, the cloud is about much more than the cloud. Cloud computing can be sufficiently understood not as a standalone phenomenon in the IT market but as a core ingredient of a larger transformation of the IT industry — and many other industries using IT to transform themselves. Other ingredients enabled by cloud — and, in turn, accelerating cloud adoption — include the proliferation of mobile devices, the explosion of mobile apps, the growing availability of wireless broadband, and the explosion of big data tools.
Three broad categories of cloud services are:
Software as a service (SaaS). Applications include collaborative applications (such as
Platform as a service (PaaS). Application development and deployment includes application development software, application life-cycle management software, enterprise mashup and portal software, information management and data integration software, and middleware and business process management software delivered via the cloud services model.
Infrastructure as a service (IaaS). Systems infrastructure software includes system and network management software, security software, storage management software, and system software delivered via the cloud services model. Basic storage includes raw storage capacity delivered via the cloud services model. Advanced storage cloud services includes backup, archiving, and so forth. Servers include server computing capacity delivered via the cloud services model. SaaS accounts for 57.4% of spending, middleware, database, and application life-cycle services in the PaaS segment account for 19.2% of spending; and infrastructure-oriented cloud services (mostly system management, security, server/compute and storage clouds) account for 22.8% of spending, which includes a significant portion of spending by SaaS providers on cloud infrastructure from other providers.
Advantages of the Cloud
For both vendors and end-user organizations, the cloud offers significant advantages compared with traditional on-premise computing. For end users, the cloud does not require significant up-front investments in infrastructure, and therefore, it leads to capex reductions. In addition, organizations can get up and running on applications much more quickly. Typically, they pay for only what they use, and ongoing maintenance and management tasks can be offloaded to a third party. As a result, cloud computing can enable organizations to be more flexible and more agile — IT is an enabler of
business innovation rather than an inhibitor.
For providers offering services, the cloud can mitigate barriers to new markets. Offering applications or infrastructure services in a one-to-many model means that providers can expand their target market significantly. It is less expensive to develop and distribute cloud-based software than packaged applications, and support costs can be reduced because customers are on the same version of software.
Toward Transparency
Cloud services are impacting vendors and end-user organizations alike. According to IDC's spring 2011 CloudTrack survey of 603 North American IT organizations, one-third of respondents expect to be providers of cloud services. Specifically, internal IT organizations anticipate providing cloud services in three different ways: by acting as service centers internally, brokering external services for use internally, or building services internally that have cloud characteristics (dynamic service
scaling/flexing, self-service provisioning, use metering, some level of chargeback/responsibility to users, etc.). Further, IDC estimates that in 2012, more than 80% of net-new software products will be designed to be sold and provisioned as services, not as packaged software, and 76% of the largest IT vendors on a revenue basis will earn some percentage of their revenue from delivering a cloud service. Clearly, supply is meeting up with demand for deployment choice and quick access to new functionality.
But in the same survey, 32% of respondents said they were wary of using technology from start-ups whose offerings they didn't understand, and in multiple surveys in the 2010–2012 period,
FDA didn't exist. The same logic can be applied to cloud services products and delivery. In the world of cloud, customers no longer license physical products and install CDs locally; therefore, having trust in the system of searching for, comparing, buying, deploying, and relying on more and more cloud services for the continued running of businesses requires a standard taxonomy of services, broad vendor buy-in to a standard service catalog, and overall far greater transparency about the quality, speed, attributes, and user experiences of cloud-based services.
IT departments are increasingly multisource, hybrid organizations taking on the role of "services brokers." In this capacity, IT departments want to manage internal and external services as a unified portfolio: costing, service quality, utilization, and asset prioritization. Hybrid asset management, granular service metering, and chargeback are critical to this new shape of IT as a service center. In this changing role as brokers, or guarantors, of externally sourced services, IT organizations have a much broader charter — and greater responsibility — for choosing services, supporting their users' ongoing value from these services, and supporting the users with break-fix, integration, and other life-cycle management tasks. There is more at stake than ever in providing a means for a transparent and consistent view of cloud services.
Benefits of a Standard Service Catalog
A service catalog is essentially a list of IT services, including descriptors for functionality and configurations, that are offered to business buyers and end users. Typically, the service catalog offerings are tailored based on a user's role within the organization or based on the service agreement. As cloud services proliferate, service catalogs become increasingly important for a number of reasons. For one, cloud services can be quickly self-provisioned, so parameters of various offerings need to be accurately described to ensure that expectations and requirements are met. The service catalog is not intended to stand in for a salesperson or for product literature, but as a decision support mechanism, it must be standardized (i.e., what constitutes base-level functionality in an email service, for example, or what is an acceptable response time to a support request as part of an SLA) so that buyers feel it is "safe" to buy and other vendors know that their products are fairly and accurately categorized alongside products that are truly functionally the same and not mostly hype and advertising. Because cloud itself represents a fundamental shift for IT — architecture moves beyond the firewall, internal IT sources complex cloud services, and vendors build digital supply chains to offer services — both buyers and sellers benefit from that "normalization" of familiar product categories, configurations, and functional capabilities.
Another important component of the service catalog is that the available offerings are universally defined among the vendors in the cloud ecosystem — some will be well known to buyers, and others will be start-ups. This standard definition provides transparency and is important for cloud subscribers that want to accurately compare services among providers as well as against their internal IT
department. A standard service catalog can enable providers to truly differentiate their services through the offering of add-on services. Inclusion in a service catalog means that small providers are fairly represented as viable choices alongside their larger competitors. Large, incumbent providers are recognized for their adherence to taxonomies and a high degree of functionality and are not unfairly grouped alongside "fly by night" providers with subpar offerings. Adherence to and inclusion in a standards organization in effect puts all providers on a level of trust above the "Wild West" of the Web, with its specious claims of service quality, low price, etc., and in the realm of trusted provider.
Market Trends
and, in turn, accelerating cloud adoption — include the expanding "species" of mobile devices, the explosion of mobile apps, the growing availability of wireless broadband, and the explosion of big data tools. Maximizing success in cloud services will require "mashing up" cloud services with one or more of these other 3rd Platform technologies, often in the context of a new, vertically focused solution.
The entry of "traditional" IT vendors and the maturing of pure-plays are evolving the market to "enterprise grade." Over the past 6–12 months, the more aggressive push of established enterprise IT leaders with "trusted brands" into the cloud services market has begun to change the market significantly. At the same time, the first-generation pure-play cloud leaders are not standing still; they have evolved and expanded their offerings to include more enterprise-friendly capabilities. This maturing of cloud offerings — moving beyond "good enough" to "enterprise grade" — sets the stage for many organizations to migrate a broader range of their workloads to the cloud during the 2011– 2015 period.
Organization Profile
The Open Data Center Alliance (ODCA) is an independent organization with the mission of providing stakeholders a voice in shaping the future of cloud computing. The ODCA is developing a unified vision for cloud requirements focusing on open, interoperable solutions for secure cloud federation, automation of cloud infrastructure, common management, and transparency of cloud service delivery. Currently, the ODCA has more than 300 member companies worldwide. Membership is aimed at both enterprise IT cloud customers and cloud service providers.
To further its goal to develop a unified vision for cloud requirements, the ODCA recently published eight Open Data Center Usage Models. These member-defined requirements document the most pressing challenges and needed solutions for cloud deployment in four categories: Secure Federation, Automation, Common Management & Policy, and Transparency.
In the area of transparency, the ODCA has created a Service Catalog Usage Model that encourages the creation of consistent ways to describe standard cloud services. The Service Catalog Usage Model is geared to help cloud providers offer value-added custom solutions and to enable cloud subscribers to evaluate and select cloud services based on standard criteria. In addition, the model is designed to help subscribers better negotiate price and service extensions.
In the ODCA's usage model, there are three essential components to the service catalog that providers should use to describe their cloud services:
A data model (in a format such as XML or a specific markup language) that includes the
information for the service catalog to describe standard and extended attributes of providers and service offerings
A standard set of structures to describe the provider and that provider's products and services
An API to interact with the service catalog
Challenges
Another related challenge among buyer organizations is the trust that ODCA has attracted the significant "market maker" vendors, provided mechanisms that reward adherence to service
transparency and punish rules infractions, and generally provided an objective basis for trust. Without the feeling that ODCA is essentially a "gold standard" for ensuring service transparency, both buyers and vendors will revert to the ungoverned atmosphere of the broader Web, where fear, uncertainty, and doubt about service claims and product capabilities prevail.
Conclusion
The market for cloud services is growing and represents a fundamental shift in the way that service providers deliver IT and how organizations consume IT. As the number of cloud services options proliferates, both providers and subscribers can benefit from a standard service catalog that defines industry-accepted cloud services. With a standard catalog, providers can better differentiate their services while subscribers can compare various cloud offerings.
As IT organizations shift from being single-source builders and providers of technology for their "users" to being brokers, or guarantors, of externally sourced services, they have a much broader charter — and greater responsibility — for choosing services and supporting their users' ongoing value from these services. There is more at stake than ever in providing a means for a transparent and consistent view of cloud services.
To deliver on the promise that buyers can transparently discover, compare, acquire, and consume cloud solutions with assurance, service catalogs, which include rules of transparency, taxonomy, and service quality, must be agreed upon by key vendors and must be accepted by buyers.
With its Service Catalog Usage Model, the ODCA is working to establish this standardized service catalog for providers and subscribers. If the ODCA addresses the challenges outlined in this paper, IDC believes that the organization can play a key role in enabling the cloud services market to continue its growth.
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