Cloud Vista
Market Report: October 2012 – Preview Deck
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Background and scope of the research
Background of the research:
Cloud delivery models are disrupting the infrastructure outsourcing market. Remote Infrastructure
Management (RIM) providers are realizing the significant shortcomings in their offerings to tap the evolving
buyer demand
Everest Group Research analyzed the impact of cloud delivery models on RIM players as well as
developed roadmap for a holistic infrastructure outsourcing service strategy
This report will be useful for the providers to understand the evolving infrastructure outsourcing market and
the impact of cloud models. It will also be useful to them to strategize around creating an integrated
infrastructure outsourcing service
Buyers will find this report useful to understand the importance of cloud delivery models to their enterprises,
key developments in the RIM market, challenges faced by their traditional outsourcing providers,
benchmarking of their RIM adoption against competition, etc.
The scope of analysis includes:
Analysis of the growing convergence between RIM and traditional outsourcing providers
Crisis of genre faced by the RIM players
Impact of cloud on asset-light RIM providers
Table of contents
Summary of key messages
5
Evolution of Infrastructure Outsourcing (IO)
9
Different models in IO
10
Growth of RIMO
13
Crisis of genre for offshore service providers
19
The cloud disruption and the need for a holistic IO strategy
25
Implications for key stakeholders
37
Appendix
40
Glossary of terms
41
Cloud Vista research calendar
42
References
43
Summary of key messages
(page 1 of 2)
Evolution of IO strategies
Normally the infrastructure service deals of traditional providers were significantly
different than RIM players. However, over a period of time there is a growing convergence in terms of pricing, deal constructs, buyer expectations etc.
RIM players selectively created a secondary strategy to offer asset based services to
win transformational engagements. Their growing aspirations and decline in traditional infrastructure deals, is further bringing these models closer
Cloud impact on IO With the acceptance of cloud delivery models, buyers are demanding more integrated
transformational infrastructure solutions preferably hosted by the provider
Cloud delivery models are allowing RIM providers to offer typical datacenter and cloud
infrastructure services with significantly lesser asset footprint
These providers have a unique opportunity to move beyond simple global delivery
model based infrastructure service and integrate this competence with a secondary strategy of datacenter ownership
Cloud delivery models are making remote infrastructure management providers develop a holistic infrastructure outsourcing strategy and serve the evolving market demand. The increasing buyer demand for integrated end-to-end solutions coupled with growing convergence of RIM providers with traditional players is making asset-light providers look beyond labor driven pure management services.
This research by Everest Group analyzes the impact of cloud delivery models on infrastructure outsourcing market. It also contains a case study on Cognizant’s datacenter strategy for cloud and other infrastructure services.
Summary of key messages
(page 2 of 2)
Case for datacenter strategy
For asset-light players, multiple models of datacenter ownership emerged such as
partnership, buyer asset acquisition, and organic build-up. Providers may also “white-label” partner assets to create their own cloud infrastructure and typical datacenter services.
However, these providers need to ensure that despite offering datacenter based
RIM providers need to create a holistic infrastructure service
strategy to cater the evolving demand for cloud services
Increasing RIM adoption across large buyers Limited opportunity for pure cloud management
RIM player secondary datacenter strategy Datacenter service models for asset-light players
Cloud management not in deal scope
Cloud management and other roles of service providers
2011; Number of deals Includes host Includes consult/ design Includes third-party solution implementa-tion Excludes build/ customize/ host Cloud management in deal scope Includes build/ customize 100% = Offshore IO deal distribution by buyer size
Number of deals 2008 2009 2010 2011 >US$XX billion US$XX-XX billion US$XX-XX billion US$XX-XX billion <US$XX billion 100% =
Datacenter strategy evaluation matrix
Datacenter ownership strategy
A sset o w n er sh ip Buyer owns datacenter Partner owns datacenter Provider owns datacenter Provider owns assets Partner owns assets Buyer owns
assets Dominant strategy
Plugging the infrastructure gap – evolving strategies for asset-light IO players
Partnership
low high
Opportunistic buyer asset acquisition M&A
Cloud Vista research agenda
Topic Release date
May-2012
Enterprise Cloud Adoption: Role of Cloud in Global Services
January-2012
Value Creation in Cloud Infrastructure: It Varies, but mostly from Good to Excellent
June-2012
Enterprise Cloud: Where are the Investments?
August-2012
Enterprise Cloud Quarterly Review: Q2 2012
Published Current
August-2012
Enterprise Cloud Offerings: Do Buyers Really Want these?
October-2012
Serving the Cloud – Moving beyond Asset-light Strategies
Q4-2012 Enterprise Cloud Quarterly Review: Q3 2012
Q4-2012 Cloud Service and Solution Spotlight
Q1-2013 View from Clouds
Q1-2013 Enterprise Cloud Adoption – Cloud Deals Insights
Q1-2013 Enterprise Cloud Quarterly Review: Q4 2012
Q2-2013 Cloud Service and Solution Spotlight
Q2-2013 View from Clouds
Q2-2013 Enterprise Cloud Quarterly Review
May-2012
Enterprise Cloud Quarterly Review: Q1 2012
September-2012
Additional cloud related research references
The following documents are recommended for additional insight on the topic covered in this research report. The recommended documents either provide additional details on the topic or complementary content that may be of interest
1. Enterprise Cloud Adoption 2011 (EGR-2012-4-R-0682a); 2012: This report analyze cloud service engagements signed in
2011. The analysis is split across buyer regions, size, and cloud deployment models. The report also provides insights on the deployment trends in cloud infrastructure and application. It also analyzes the various roles solution service providers are playing in the market for cloud delivery models
2. Enterprise Cloud Offerings – What do the buyers really want? (EGR-2012-4-R-0730); 2012: This viewpoint report
analyzes over 160 market updates emanating from over 60 cloud solution and service providers. The viewpoint provides insights on various types of cloud offerings launched in Q2 2012 and analyzes the disconnect between the buyers
expectations and market offerings. It also provides guidance to the solution and service providers in terms of communicating their cloud offerings to the market.
For more information on this and other research published by the Everest Group, please contact us:
Ross Tisnovsky, Senior Vice President: Chirajeet Sengupta, Practice Director: Yugal Joshi, Senior Analyst:
ITO Team:
Phone: +1-214-451-3110
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Everest Group
Leading clients from insight to action
Everest Group is an advisor to business leaders on the next generation of global services with a worldwide reputation for helping Global 1000 firms dramatically improve their performance by optimizing their back- and middle-office business services. With a fact-based approach driving outcomes, Everest Group counsels organizations with complex challenges related to the use and delivery of global services in their pursuits to balance short-term needs with long-term goals. Through its practical consulting, original research, and industry resource services, Everest Group helps clients maximize value from delivery strategies, talent and sourcing models, technologies, and management approaches. Established in 1991, Everest Group serves users of global
services, providers of services, country organizations, and private equity firms in six continents across all industry categories. For
more information, please visit www.everestgrp.com and research.everestgrp.com.
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