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Everest Group and Cloud Connect conducted a first of its kind assessment of the major driving forces behind enterprise cloud adoption. This survey was unique in that it examined the perceived benefits and pain points among cloud buyers and compared the results with those of service providers and third party consultants. The results are surprising and indicate some shifting market drivers and surprising disconnects between cloud buyers and sellers.
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What’s Driving Enterprise Cloud Adoption? The Buyers Speak Out
January 10, 2013
Live Tweeting #ccevent
Proprietary & Confidential. © 2013, Everest Global, Inc. 2
Introductions
Scott Bils Partner & Next Generation IT Practice Leader [email protected]
Steve Wylie General Manager [email protected]
Proprietary & Confidential. © 2013, Everest Global, Inc. 3
Context setting
Sources for today’s webinar
Focus of this webinar Current and future adoption patterns across cloud layers - IaaS, PaaS, SaaS, BPaaS
Current and future adoption across cloud hosting models - Public, Private and Hybrid
Adoption trends by application workload
Stakeholder involvement in cloud investments
First of its kind enterprise cloud adoption tracking survey
Fact-based research focused on enterprise cloud market and all layers of the cloud stack
2012 Enterprise Cloud Adoption Survey
+
Proprietary & Confidential. © 2013, Everest Global, Inc. 4
Why do another enterprise cloud survey?
“Peel back the onion” on adoption patterns
Assess post-adoption reality vs. buyer expectations
Identify cloud market “disconnects”
Survey respondents
37%
32%
31%
Enterprise / Cloud Service Buyers
Cloud Service Providers Consultants/
Advisors
100% = 346
Proprietary & Confidential. © 2013, Everest Global, Inc. 5
Key findings from the survey
Cloud adoption is quickly moving beyond the “low hanging fruit”
1
Business agility and top-line growth are top cloud adoption drivers
2
Perceived security issues continue to be the biggest adoption barrier
3
While VMware leads today, many are leaning towards open source
4
Service providers need to adapt to new buying centers and drivers
5
Overall, buyers have been satisfied, with high expectations for the future
6
Proprietary & Confidential. © 2013, Everest Global, Inc. 6
How widely does your company use public cloud IaaS services like Amazon today?
4%
48%
28%
20%
Extensively
Experimenting
Not all all
Don't know
Source: Live polling conducted during the “What’s Driving Enterprise Cloud Adoption?” webinar on January 10, 2013
Proprietary & Confidential. © 2013, Everest Global, Inc. 7
SaaS has been adopted most widely; IaaS adoption is expected to grow fastest in the near future
Software as a Service (SaaS)
Platform as a Service (PaaS)
Public cloud (IaaS)
Private cloud (IaaS)
Business Process as a Service (BPaaS)
Hybrid cloud (IaaS)
57%
38%
31%
30%
28%
17%
28%
25%
26%
36%
27%
27%
10%
27%
26%
23%
22%
36%
5%
10%
18%
11%
23%
20%
Enterprise Cloud Adoption by Cloud Layer
48%
34%
18%
Plan to implement cloud infrastructure
Already have cloud infrastructure
No plans for cloud infrastructure
Enterprise IAAS Adoption Plans
Already adopted Adopt in distant future
Adopt in near future No plans to adopt
Proprietary & Confidential. © 2013, Everest Global, Inc. 8
34%
25%
14%
12%
9% 4% 3%
Amongst those planning IaaS implementation, VMware enjoys dominant mindshare
Preference for virtualization technology Buyer responses (cloud infrastructure implemented/planned)
47%
19%
18%
9% 6%
100% = 95 (number of mentions)
VMware
No preference
Microsoft Hyper-V
Xen
KVM
Preference for cloud platform Buyer responses (cloud infrastructure implemented/planned)
However, a significant proportion of the market professes to be platform agnostic, or prefer open source platforms
100% = 104 (number of mentions)
VMware
No preference
OpenStack
IBM SmartCloud
CloudStack
VCE Eucalyptus
Proprietary & Confidential. © 2013, Everest Global, Inc. 9
Email/collaboration, DR/storage, and BI/analytics being targeted for cloud migration as buyers think beyond custom applications and development platforms
29%
28%
25%
25%
22%
19%
18%
25%
17%
16%
20%
25%
16%
19%
28%
31%
46%
42%
32%
39%
25%
19%
24%
13%
14%
22%
26%
37%
Enterprise Cloud Adoption by Use Case
Application development/test environment
Custom business applications
Collaboration / email
Disaster recovery/storage/data archiving
E-commerce and on-line tools
Business intelligence/analytics
ERP
Already migrated Currently migrating Future migration planned No migration planned
Proprietary & Confidential. © 2013, Everest Global, Inc. 10
Vast majority of buyers met their “cloud objectives”; more than cost reduction, cloud enables flexible infrastructure and reduce time to market…
18% 23% 19% 16%
25%
38%
25% 27%
21%
21%
27% 24%
31%
14% 24% 27%
1% 2% 2% 1% 2% 2% 1% 2% 2% 1% 1% 2%
Strongly agree
Agree
Somewhat agree
Neither agree or disagree
Somewhat disagree
Disagree Strongly disagree
64%
82%
71% 67%
We met our objectives for cost savings
We met our objectives for flexible infrastructure
We met our objectives for quicker time to market
We met our objectives for higher satisfaction of business units
N = 88
XX% Overall agreement % Enterprise Cloud adoption – objective fulfillment Buyer responses
Proprietary & Confidential. © 2013, Everest Global, Inc. 11
…both of which are top adoption drivers for enterprise buyers; however, supply side constituents view cloud adoption to be driven primarily by cost reduction imperatives
N = 81
N = 84
N = 79
N = 82
N = 81
N = 82
Relative importance of adoption drivers Buyer responses
1 = not at all important; ………. 5 = very important
3.33
3.27
3.25
3.03
2.71
2.37 N = 184
N = 193
N = 186
N = 191
N = 193
N = 193
Relative importance of adoption drivers Service provider/advisory responses
1 = not at all important; ………. 5 = very important
Reduced time for provisioning application/infrastructure
Flexible infrastructure capacity
Limited in-house technical resources
Desire to "variabilize" cost
Reduction in TCO (Total Cost of Ownership)
Industry-specific reasons
Reduction in TCO (Total Cost of Ownership)
Flexible infrastructure capacity
Reduced time for provisioning
application/infrastructure
Desire to "variabilize" cost
Limited in-house technical resources
Industry specific reasons
3.21
3.21
3.13
2.63
2.56
2.49
Proprietary & Confidential. © 2013, Everest Global, Inc. 12
Adoption is by and large driven non-vertical solutions; however, industry-specific adoption patterns point towards significant impact on customer facing processes
Industry specific reasons for cloud adoption Buyer responses
“…make changes quickly to web hosted customer portal”
“… to serve the needs of our clients – through (dynamic) communication, and data analytics”
“…support with products and services, our customers who wish to operate within the public cloud.”
Buyerspeak: Industry specific cloud solutions enable us to…
General solution
Combination (industry-specific
and general solutions)
Industry-specific solutions
100% = 89
Industry specificity of cloud adoption Buyer responses
69%
17%
15%
Proprietary & Confidential. © 2013, Everest Global, Inc. 13
Security and integration issues are barriers to adoption; contrary to buyer perception, service providers cite lack of buy-in as a more significant barrier than budget issues Barriers to enterprise cloud adoption Buyer responses
N = 193
N = 191
N = 195
N = 193
N = 190
N = 196
N = 80
N = 83
N = 83
N = 81
N = 81
N = 83
N = 81
Barriers to enterprise cloud adoption Service provider/advisory responses
Service providers need support from stakeholder groups in order to generate buy-in across the enterprise
1 = not at all important; ………. 5 = very important
3.31
2.92
2.77
2.70
2.69
2.60
2.48
1 = not at all important; ………. 5 = very important
2.93
2.73
2.58
2.49
2.42
2.39
2.26
Security concerns
Integration of cloud solutions
Lack of budget for new initiatives
Lack of suitable cloud solutions
Lack of in-house capability to evaluate cloud solutions
Fear of vendor lock-in
Lack of management buy-in
Security concerns
Integration of cloud solutions
Lack of management buy-in
Lack of budget for new initiatives
Lack of in-house capability to evaluate cloud solutions
Lack of suitable cloud solutions
Fear of vendor lock-in
Proprietary & Confidential. © 2013, Everest Global, Inc. 14
Buyers are willing to change service providers for the right contract terms, while service providers believe the reputation and tenure of the provider is more important
N = 193
N = 194
N = 193
N = 192
N = 193
N = 83
N = 83
N = 84
N = 82
N = 82
Security features continue to be the top decision criteria
1 = not at all important; ………. 5 = very important 1 = not at all important; ………. 5 = very important
Cloud solution purchase – decision criterion Buyer responses
Cloud solution purchase – decision criterion Service provider/advisory responses
3.65
3.45
3.24
3.11
2.90
2.55
3.50
3.34
3.29
3.05
2.72
2.66
Security of the offering Security of the offering
Contract terms and SLAs Reputation and tenure of the provider
Contract terms and SLAs
Case studies / client referrals / track record
Low price
Physical location of facilities delivering cloud services Low price
Case studies / client referrals / track record
Reputation and tenure of the provider
Physical location of facilities delivering cloud services
N = 194 N = 84
Proprietary & Confidential. © 2013, Everest Global, Inc. 15
IT, in conjunction with business leadership, comprises the primary decision-making group for cloud adoption
Stakeholder involvement in cloud solution purchase Buyer responses
Compared to other IT purchase decisions, cloud investments attract higher involvement from CXOs
67
51
39
28
7
IT function C-level executives Business units Finance function No formal effort to develop enterprise
cloud strategy
N = 192 (number of mentions)
Proprietary & Confidential. © 2013, Everest Global, Inc. 16
Enterprise adopters express strong satisfaction and remain extremely optimistic about their ability to generate business value from cloud solutions Chart title Number of respondents
14% 13% 9%
34% 13% 19% 29%
42%
35% 23%
26%
12%
16% 22%
16%
12%
14% 7%
11%
5% 13%
6% 4% 4% 4% 1%
Strongly agree
Agree
Somewhat agree
Neither agree or disagree
Somewhat disagree
Disagree Strongly disagree
62% 55%
64%
88%
N = 86
XX% Overall agreement %
We have a robust strategy for managing our adoption of cloud solutions
In comparison to other organizations, we are more mature in our approach to cloud solutions
We are satisfied with the current results from our cloud initiatives
We expect to achieve greater benefits from cloud solutions in the future
Proprietary & Confidential. © 2013, Everest Global, Inc. 17
How confident are you that your organization is on the right path to the cloud?
47%
47%
6%
0%
Very
Somewhat
Not very
Not at all
Source: Live polling conducted during the “What’s Driving Enterprise Cloud Adoption?” webinar on January 10, 2013
Proprietary & Confidential. © 2013, Everest Global, Inc. 18
In Summary…
Cloud adoption is quickly moving beyond the “low hanging fruit”
1
Business agility and top-line growth are top cloud adoption drivers
2
Perceived security issues continue to be the biggest adoption barrier
3
While VMware leads today, many are leaning towards open source
4
Service providers need to adapt to new buying centers and drivers
5
Overall, buyers have been satisfied, with high expectations for the future
6
Proprietary & Confidential. © 2013, Everest Global, Inc. 19
Why is this survey important? The responses from the Enterprise Cloud Adoption Survey 2013 will define the current state of how and why organizations are utilizing cloud solutions within their industries, the most significant adoption drivers and challenges, future plans, and more. This year’s results will also include year-over-year comparisons with 2012, with noted areas of change. Why should you participate? In appreciation for your participation, you'll receive a copy of the survey findings and be entered for a chance to win a complimentary conference pass to Cloud Connect's next conference and expo in Silicon Valley, April 2-, 2013. Just be sure to complete your contact information at the end of the survey.
2nd Annual Enterprise Cloud Adoption Survey Coming soon
All webinar registrants will receive an email when the survey opens in the coming weeks. Stay tuned!
Registration now open! Silicon Valley, April 2-5
Proprietary & Confidential. © 2013, Everest Global, Inc. 20
Q&A
To ask a question during the Q&A session Click the question mark (Q&A) button located on right side of your screen. This opens Q&A
Be sure to keep the default set to “send to All Panelists”
Type your question in the box at the bottom of the Q&A box and click the send button
Attendees will receive an email with instructions for downloading today’s presentation
To contact the presenters: – Scott Bils, [email protected], @sbils – Steve Wylie, [email protected], @swylie650
Websites www.everestgrp.com research.everestgrp.com
Twitter @EverestGroup @Everest_Cloud
Blogs www.sherpasinblueshirts.com www.gainingaltitudeinthecloud.com
Stay connected
Proprietary & Confidential. © 2013, Everest Global, Inc. 21
About Everest Group
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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