Frost&Sullivan_ Cloud computing

Cloud Computing Trends End User Perspective

A Clear Look Throught the Cloud

Presentation developed for:

2

Agenda

1 - What is going on?

2 - Understanding the Cloud

3 - Cloud Computing: the real scenario

4 - Cloud Computing: a look ahead

5 - Competitive Landscape

6 - Final Words

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1 - What is going on?

4

Economical stability in some countries will leverage IT investments in the region

• IT Investments are direct

linked with external

factors.

• Those same external

factors are direct linked

between them.

• The same holistic

overview is more and

more moving towards a

global perspective, getting

out of the local landscape.

• Technology is key for

short, medium and long

term growth!

Economic

Landscape

IT

Investments

Competitiv

e

Environme

nt

Governmen

t

Incentives

Regulation

Demand

Source: Frost & Sullivan

5

After a slow year, the horizon is promising to the region

The macroeconomic consistency presented by some countries in the region before the

global economic downturn in 2009, was an important factor that decreased the impact in

the region.

GDP 2010 GDP 2011

5.2%

Latin America – GPD Growth GPD Forecast - 2011

7.6%

6.8%

6.7%

4.5%

USD 3.97

Trillion

USD 4.17

Trillion

Source: Frost & Sullivan, World Bank, Cepal

6

And the IT department is always facing the same challenges

• Constant pressure to reduce costs.

• Increase operational efficiency.

• Fastness in solutions implementations.

• Optmize the use of IT to leverage business.

• IT aligned with the core business of the company.

7

Technology was a fundamental piece in the cost saving objectives of companies in 2010 ( Not Raking)

• It is evident that company's Chief Financial Officers (CFOs) will have greater control

over IT investments. Hence, there will be a clear predilection over investments in IT

areas that have direct consequence in reducing costs and increasing revenues and profit

margins.

• Virtualization• IT Infrastructure Outsourcing• Software as a Service• Unified Communication• Cloud Computing

• Adecuacy on long term contracts• Reduction on ITbudgets• Postopone of someIT projects• Strong impact on small and medium business.

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2 – Understanding the

Cloud

9

Software as a Service (SaaS)Consists in the software distribution whereas a company provides maintenance, support and client’s operation during the service contracted period.

Platform as a Service (PaaS)Its primary use is focused on providing a complete solution for application development and launching and Web services that are fully available online.

S3S3

Infrastructure as a Service (IaaS)It provides to the customer a computing infrastructure as a service, using mostly virtualization. The client attains resources from an outside vendor such as hosting, computing capacity, maintenance and network management

Market Definitions

10

Cloud computing is a flexible and scalable shared and/or private environment in which third-party suppliers or in-house architectures use virtualization technologies to create

and distribute computing resources to customers on an as-needed basis, via the Internet browser.

Cloud Computing encompasses major advantages from other past IT architectures and services

Cloud Computing Characteristics

Distributed computing

Pay per UseBrowser-

based client

√

IT Architectures

√ √

√

√

√

√

√

Cloud Computing

Utility Computing

Grid Computing

Virtualization Tecnologies

Software as a Service

Platform as a Service

√Web Services

• More than a technological

revolution, Cloud Computing

is the ultimate evolution of

a series of environments

and technologies.

• However, due to its

emergent stage and current

retsraints, the original

concept of cloud computing

suffered adaptations by

providers to addreess

clients’ needs.

11

An impressive 20% of the companies in Latam had an excellent understanding of the Cloud Computing concept

Market Knowledge and Awareness – Latin America

Excellent21%

Good48%

Fair28%

Low3%

N = 110. Source: Frost & Sullivan

• IT executives in Mexico have a higher understanding regarding the cloud computing

concept in comparison to the rest of Latin America.

• Some top reasons for that is the general maturity level regarding IT and some early

adoptions leveraged by multinational companies established in the country.

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3 – Cloud Computing: the real

scenario

13

The economic unrest experienced in 2009 made CIOs want to know more about Cloud Computing

Already Adopted

47%Not Adopted yet53%

Current Market Adoption – Latin America

N = 110. Source: Frost & Sullivan

• Cloud computing highest adoption rate mainly in Mexico and Brazil. Nevertheless, large

enterprises in Latin America are strongly engaging into the cloud computing concept and

adoption rate for the short term is likely to increase 30%.

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Current Market Adoption

The concept of cloud computing encompasses significant promises

• Cloud Computing adoption is still very fragmented among verticals. Nevertheless, there

is a clear current adoption acceptability from three main verticals: Industry and

Manufacturing, Banking and Finance, and IT and Telecom.

• The government sector still has some security and privacy issues that restraints the

adoption of cloud computing toward further solutions and services.

Companies without any type of cloud

computing solutions46.0%

Companies that use cloud computing

solutions54.0%

Brazil

Companies without any type of cloud

computing solutions50.0%

Companies that use cloud computing

solutions50.0%

Mexico Companies that already

adopted the cloud computing concept

25%

Companies without any type of cloud computing solution

75%

Colombia

15


N = 110, Source: Frost & Sullivan

Private Clouds65%

Hybrid Clouds30%

Public Clouds5%

Whilst public clouds suit small and medium companies’, enterprises demand private environments

• Due to the emerging stage of the cloud computing trend in the region and also globally,

the majority of enterprises that already adopted the model, preferred the private one

(either outsourced or developed in-house).

• The hybrid and public models are expected to gain share in the near future as companies

start to trust more in this new technology business model and more local successful case

studies are released.

Not Adopted yet53%

Already Adopted

47%

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Enterprises in Latam are starting the cloud adoption in the application level

• Driven by marketing efforts and also available offers, enterprises in Latam have started

the cloud computing adoption by the application level ( CRM, ERP; BI, Email etc)

• Platform utilization ( Web Site Hosting, E-commerce) is still low and very punctual. Within

the infrastructure level, companies are expected to increase the cloud adoption in the

short term.

60%

30%

85%

Infrastructure

Platform

Application

Not Adopted yet53%

Already Adopted

47%

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Top Cloud Computing Solutions and

Services - 2010

Database solutions was by far the most participative with an 82.4 percent penetration

Application

Platform

Infrastructure

85%

30%

60%

• Database

• Email

• BI (Business Intelligence)

• Application Testing

• Storage

• Website Hosting

• Intranet Hosting

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4 – Cloud Computing: a look ahead

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Cloud Computing is clearly going to witness significant growth in the short-term in Latam

Already Adopted

65%

Not Adopted yet35%

Frost & Sullivan

Future Market Adoption (2011 and 2012) – Latam

• With 65 percent of companies planning to adopt or expand their Cloud Computing

architectures in 2011 and 2012, this IT trend is clearly going to witness significant growth

in the short-term in Latam.

• Noteworthy highlights to the intent of adopting Hybrid Clouds, with 30.8 percent

penetration, where companies can reap the advantages of public Clouds for some

processes, while maximizing the security and privacy of their operations by also having

private Clouds in place.

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Security is King to the enterprise segment

Market Drivers – Cloud Computing – Latam

Top mentions in order of importance

IT cost reductions

Business Continuity

Operational elasticity

Faster “time-to-market”

Market Restraints – Cloud Computing – Latam

Top mentions in order of importance

Security & Privacy

Lack of Knowledge and Awareness

Internet Constraints

Loss of Control

Source: Frost & Sullivan

• Most of the major factors driving adoption of the Cloud Computing concept by companies in Latin America & Caribbean are the same ones that boost more mature markets such as the USA and Western Europe.

• Security is the top reason cited by enterprises for avoiding Cloud solutions. In some cases, the concerns are legitimate: clearly, anytime a resource is shared, there is greater risk of unauthorized access and contaminated data. Specifically in “public clouds”, when access is via the Internet, the possibility of unauthorized access increases and so does the risk of digital crimes.

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Cloud Computing providers still have key challenges to overcome in this market

Lack of clear

regulations

No clear pricing

structures

Lack of

knowledge on

offers

Government

participation

Standardize

offers

Strong

marketing and

comm. strategy

22

Potential Verticals for Cloud Computing Providers in the Region

Oil & Gas

Mining

EnergyUtilities

23

5 – Competitive Landscape

24

Quality is already an integral part of the offer and decision making is beyond the IT department

• For enterprise segment, security is

king. With 77.5 percent penetration,

security is the most important

characteristic considered in the process

of selecting a Cloud Computing

provider.

• Growing importance of the chief

financial officer (CFO) over IT strategic

plans and short-term investments. Most

IT service providers and vendors have

been trying extremely hard to

customize their go-to-market strategies

in order to address the CFOs and

creating tools to show return on

investment (ROI).

Key Attributes Considered in the Selection of a Cloud Computing Provider –Latin

America

Others

Technological Partners

Brand

Services Portfolio

Technological Infrastructure

Market Referrals

Local Presence

Market Experience

Price

Security 77.5%

65.0%

42.5%

40.0%

27.5%

25.0%

20.0%

12.5%

7.5%

20.0%


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Global players are the major participants within the cloud computing market

• Partnerships among IT service

providers and application developers

are expected to keep growing within

the cloud computing landscape. This is

key to build up an integral cloud

computing solution.

• Telecom service providers are still not

perceived as cloud computing players

by end-users in most part of Latin

America. This scenario is likely to

change in the short term.

10%

10%

10%

15%

20%

45%

50%

65%

70%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

SAP

Amazon

Unisys

Oracle

Salesforce

HP

Google

Microsoft

IBM

Cloud Computing Providers Preferred by Respondents (Latam), 2010

26

Telcos have huge opportunity to attend SMB segment in the region

Broadband

+

• Perfect ICT solution

for SMB segment.

Specially Saas.

• Solution to antipiracy

Software

• More productive

• 95% of enterprises

structure in Latam are

SMB

• One stop shopping

concept All ICT

solutions with one

provider) With IT Partner

27

6 – Final Words

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1 – Understand your client’s business!

The CFO wants to see the return over

the investment.

2 – Security, Price, and Market

Experience. Those are key attributes to

focus on. Quality is already default.

3 – Focus are on: e-commerce and

storage (infrastructure), ERP, CRM, and

BI (applications), application testing

(platform).

IT Service Players have to Shift from Providers to Partners

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CIO: Strategic Role within Organization

Rol de IT/Telecomunicaciones en las Empresas Align IT

area to

Bussiness

Customer Focus

Loyalty

More Wallet ShareMarket Share

Support to increase

productivity

Support to reduce costs and reduce

risks

CIO, CTO: More strategic role within Organization

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Frost & Sullivan

Marcelo RuizIT & Communications Global Consulting Directorand Country Manager Colombia Frost & Sullivan Tel: 571 [email protected]