Cloud computing in south africa reality or fantasy

Cloud computing in South AfricaReality or Fantasy?

AIGS Conference18th June 2012

Chantel Lindeman

2

Agenda

Evolution of cloud computing

Platform as a Service: Next Hot Cloud

Uptake of cloud computing: The Reality

South African Cloud Computing Market

Data Centre Uptake: Virtualised Environment

Where is your Business?

3

Generational shift of computing platform over the past 40 years

Technology Economic Business

Centralised compute & storage,

thin clients

Optimised for efficiency due to

high cost

High upfront costs for hardware and

software

PCs and servers for distributed

compute, storage, etc.

Optimised for agility due to low cost

Perpetual licence for OS and

application software

Large DCs, commodity HW,

scale-out, devices

Order of magnitude better efficiency and

agility

Pay as you go, and only for what you

use

4

• Public cloud offers the opportunity to fully exploit the cost savings inherent in cloud computing services

‒ Company relies on the service provider for security and data backup

• Private cloud ensures more security as data and applications are stored internally

‒ Some companies use it initially to gain insights and confidence into Cloud computing services

‒ It still requires upfront costs and hands-on management, therefore it does not fully exploit the cost-reduction potential

• Hybrid cloud enjoys ‘the best of both worlds’, as it offers the flexibility to have SaaS and the discretion on managing the security and data ‒ Costly to keep resources on a private

cloud while the resources on the public cloud pose a security risk

Three deployment models available for cloud computing

5

Agenda







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The integration between IaaS and SaaS which leads to PaaS

• Public cloud IaaS is driven by cost efficiency and scalable storage

• Private clouds embrace the platform = PaaS

‒ Increases efficiency and productivity of Enterprise Development Organisations

• Public SaaS cloud moves towards PaaS

‒ Customer demands for isolation and customerization

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The broken promise of cloud - enterprises restrict cloud usage to non critical apps (e-mail and web hosting)

• Costs reduction: Do not eliminate IT workers or shut down data centres

• Scalability: multiple management environment

• On-premises and hosted; dedicated and shared; public, private and hybrid cloud

• Streamline IT: little impact to burdensome challenges

• Examples: maintain critical legacy systems

Robust and integrated PaaS solution can achieve the efficiency of a shared cloud environment while extending the benefits beyond hosting of isolated apps

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Most PaaS services are available to users on demand, with the provider managing the hardware and software

Reduce risk in cloud

environment

Manage mission critical

systems

IntegrationSafely test

environments separately

Increase quality

and control

Decrease development

time

• Easily replicable images enables developers in minimizing coding

• Application can be deployed immediately

• Co-ordinate alignment of applications with corporate requirements for security

• Applications can be tested at same scale as production environment

• Bringing together of new and legacy applications together with minimal coding

• Manage SAP and Web applications

• Enterprise IT department is able to specify performance specs

• Leverage cloud with higher degree of confidence

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Agenda







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Global Cloud Market Takes Off: This what is what the market is saying including Frost & Sullivan …

The global cloud market is predicted to increase fro $41 billion in 2011 to more than $241 billion by 2020

2008 2010 2012 2014 2016 2018 20200

50

100

150

200

250

300

Predicted Global Cloud Market

Years

Re

ve

nu

e (

Bill

ion

do

llars

)

Predicted

Source: 2011 Forrester Research

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… yet, adoption remains slow due to multitude of factors

Unfamiliar

Believers

Unconvinced

Familiarity and adoption of IaaS

Have never heard of IaaS

11%

Not very familiar with IaaS

29%Familiar with and currently using IaaS

9%

Familiar and planning to implement IaaS within 2 years

13%

Familiar with or have considered IaaS, but no plans to implement

37%

• Providers have captured the earlier adopters

• Believers are convinced of the benefits of cloud computing‒ However, they are concerned with

cloud security

• The Unconvinced are less likely to recognise the benefits of cloud computing‒ Lack of cost reductions

‒ Private data centres are at low risk of incurring securing breach

• The Unfamiliar perceptions of the cloud were negative or undecided‒ Concerned about performance

and reliabilitySource: Frost & Sullivan, 2011N = 301

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Agenda







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• Adoption rates in South Africa are low‒ Even though cloud dominates IT

discussions ‒ Simplicity in implementing the

technology and cost savings• IaaS is showing steady growth

‒ Understanding of the product offering

‒ Visibly see the cost benefits on P&L with reduction in infrastructure spend

• SaaS is in development phase‒ Niche players are building traction

in the market• PaaS is new to the market but is

expected to rapidly increase over next 5 years

Cloud Services Market: Market Cycle (South Africa), 2011

PaaS

MaturityDevelopment Growth Decline

Time

Mar

ket

Va

lue

Source: Frost & Sullivan

IaaS

SaaS

In South Africa, the uptake of cloud computing is still in the development phase

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A combination of the on-premises and virtualised data centre allows companies to retain its core services on-site and move non-critical offerings off-site

On premises Cloud Computing

Traditional Datacenter

Virtualised Datacenter

Off premisesOn-premises/

Hosted

Well- known, stable,secure

Utilisation < 15%

Management Costs Decrease

Utilisation increases to > 50%

Deliver IT as a Service Control

Shared cloud-like agility and economics

Global reach

Capacity on demand

Service standardization

High agility

Scale economics

Key driver in South Africa has been the evolution of the data centre environment

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Agenda







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As traditional products mature, newer products are being introduced

Source: Frost & SullivanBubble size represents revenue/subscriber size of service area

Data Centre Adoption Trends

Ad

op

tio

n R

ate

Low

HighIntroduction Growth Maturity Decline

LAN

WANWeb Hosting

SaaS

Hosted Enterprise Security

DR

Remote Backup

Managed servers

Cloud storage

Virtual Desktop

Basic Hosting

Hosted Managed Backup

Virtual Server

Cloud storage, virtual server and desktop, remote backup

and hosted exchange are promising service segments as

traditional product lines are maturing

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Basic Hosting

Cloud Storage

Disaster Recovery

Hosted Enterprise Security

Hosted Managed Back up

LAN

Managed Servers

Remote Backup

SaaS

Virtual desktop

Virtual server

Web-Hosting

0 100 200 300 400 500 600 700 800 900

Virtualisation solutions and cloud-based services will drive data centre revenues in future

Source: Frost & Sullivan analysis

CAGR Virtualisation solutions are a key technology trend as they offer significant efficiencies and cost savings to companies of all sizes

As a result SaaS, virtual desktop and virtual server are expected to have the highest growth rates to 2016

The importance of core services to overall data centre revenues will decline by 2016, as these services also become more commoditised

SaaS uptake will be driven by hosted

exchange, CRM and UC

Cloud storage is a small sub-product

of cloud-based services

8%

13%

30%

23%

10%

8%

2%

8%

10%

5%

12%

5%20102016

Growth forecasts per product sector, 2010 – 2016

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Virtualisation at the heart of the cloud business model

Cost avoidance

Expand capacity at minimal cost,

by maximising the use of existing

resources

Saves energy costs; and, by decreasing the overall footprint,

avoids or defers build out of the data

centre

Application Mobility

High availability, "always on" applications

Easy to implement business

continuity plans

Ease of Implementation

VM can be built in a matter of hours

or even less

Frost & Sullivan expects virtualised

offerings to overtake the uptake of

managed services

Source: Frost & Sullivan analysis

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Financial (7)

Mining (5)

Tourism (3)

0.9 9 90 900 9000

Log of Sum of Expenditure (ZAR Million))

Expenditure on data centres can comprise as much as 85% of total ICT spend as for banks

= 4000 PC’s

Data Centre SpendICT SpendProportion of staff With access to a PCWithout access

Retail and mining represent opportunities for virtualised desktops

Financial services spend on data centres is high, but a large proportion is in-house

Note: Data is presented for the sample of 50 companies selected in conjunction with Telkom

Number of potential PC’s for desktop management

Total spend per sector in the sample

78%

22%

66%

34%

60%40%

45%55%

55%45%

44%56%

82%

18%

Average PC Access

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Security will always be a concern but the financial sector consistently are looking for ways to cut costs

Key solutions for the financial sector

Managed ServersThe safety of data is critical in the financial sector. Regulation is a barrier to moving data off site, however. The management of servers on site can be outsourced

SaaSSoftware as a Service (SaaS) allows the user to effectively rent the use of select software which saves on licensing fees

VirtualisationVirtualisation has been used as a means to reduce hardware requirements within the financial sector. However, most virtualisation has been restricted in house

High Barrier

Medium Barrier

Low Barrier

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Most retailers continue to keep data centres in-house, but larger retailers are considering virtualisation

Key solutions for retail sector

WANConnectivity is important in the retail sector as information must be shared and consolidated from different branches

Managed ServersMany retailers choose to outsource data centre management services and these are often lucrative contracts

VirtualisationThis includes virtual desktop, virtual server and cloud storage, and addresses cost sensitivities in the sector

High Barrier

Medium Barrier

Low Barrier

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Due to the nature of the manufacturing sector, it is not always conducive to build sophisticated data centres

Key solutions for the manufacturing sector

Basic HostingManufacturing companies process large amounts of data and often have sites all across the country, the servers need to be hosted in a satisfactory manner

VirtualisationVirtualisation is a popular adoption trend within the manufacturing sector. Companies see the value in it and are taking steps to prepare for it

WANConnectivity is essential for the manufacturing sector as various branches are scattered around the country

High Barrier

Medium Barrier

Low Barrier

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Agenda







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Source: UN-Habitat, 2010, Frost & Sullivan analysis.

DYNAMIC INFRASTRUCTURE

Automate

Aggregate

Consolidate

Separate Liberate

Test & Development

Self-Managing Datacenters

Capacity On Demand

Server Consolidation

Enterprise Computing

Clouds On & Off Premise

Emerging TechVirtualization

maturity

Server standardization & services-

based compute

Network standardization & services-

based infrastructure

Cloud framework & application

standardization promoting

full stack interoperabilit

y & portability

Private

Public

ICT is an enabler, therefore the decision must match the need required by the company

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Where is your Business on the Journey?

Source: Frost & Sullivan Analysis

Hybrid Cloud

Automation

Private Cloud

Public Cloud

Virtualisation

Consolidation

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http://www.frost.com

Your Contact For Additional Information

Chantel LindemanBusiness Unit Leader – ICT Africa

Tel: +27 21 680 3205Mobile: +27 82 555 3851E mail: [email protected]

For additional information

http://www.frost.com/

mailto:[email protected]