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“What the hell is cloud computing?” After a year, those infamous words of Oracle CEO Larry Ellison still resonate. The definition of cloud computing is hazy at best, and many companies remain wary of the technology over concerns about infrastructure, security and regulation.Cloud computing has unique potential to save the enterprise cost, reduce complexity and provide highly available service to the end-user or client. With such compelling benefits, companies should look to understand cloud better—what it is, what it isn’t and what it will be. In this webinar, Yankee Group analysts Agatha Poon and Camille Mendler define cloud computing and explore the capabilities and challenges of the technology.
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© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 1Pinning Down the Cloud September 2009© Copyright 2009. Yankee Group Research, Inc. All rights reserved. www.yankeegroup.com
Pinning Down Cloud Computing
Agatha PoonSenior Analyst
Camille Mendler Vice President
September 29, 2009
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 2Pinning Down the Cloud September 2009
Agenda
• What is cloud computing?
• Who is investing?
• Why it’s immature
• How you need to respond
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 3Pinning Down the Cloud September 2009
Enterprise IT needs a new operating model
Capacity management is more challenging than ever.
Businesses are striving to execute green initiatives.
Distributed enterprises drive a collaborative culture.
Line-of-business executives want better control over IT.
Speed to market remains a top business priority.
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 4Pinning Down the Cloud September 2009
Poll 1
To connect the dots of many clouds, what should come first?
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 5Pinning Down the Cloud September 2009
Cloud computing may provide an answer
But make no mistake, cloud services are still evolving.
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 6Pinning Down the Cloud September 2009
Cloud computing: Key characteristics
Characteristics Pay as you go
Scalable
Instant provisioning
Virtualized information
Multi-tenanted
Service-level agreements
Dynamically
scalable
virtualized
information
services delivered
on-demand
over the Internet
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 7Pinning Down the Cloud September 2009
Cloud computing: Welcome to another stack
Software as a Service (SaaS)
Platform as a Service (PaaS)
Infrastructure as a Service (IaaS) Se
curi
ty a
nd
Co
mp
lian
ce
Virtualization layer
Pool of computing resources (servers, storage) helps IT and developers to scale computingand storage requirements in real-time on a per-usage basis (e.g., Amazon, GoGrid, AT&T Synaptic Hosting, Verizon Business CaaS, Rackspace)
Middle layer provides key management tools to deploy cloud-based apps and facilitates platform integration (e.g., Force.com, Microsoft’s Azure, LongJump, Elastra, rPath, RightScale).
Application layer offers productivity, collaboration and business applications on a subscription basis (e.g., Salesforce, NetSuite, IBM LotusLive, Google Apps, Workday, SugarCRM).
Further reading: “Pinning Down Cloud,” Aug. 2009
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 8Pinning Down the Cloud September 2009
What’s in it for enterprises?
Top 5 motivations to use Infrastructure as a Service (IaaS)
43%
29%
23%
19%
15%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Ability to access newskills/capabilities
Cost savings on ITstaffing/administration
Disasterrecovery/business
continuity
Capacity management
Cost savings onhardware/infrastructure
Percent of respondents
Source: Yankee Group Anywhere Enterprise--Large: 2009 U.S. Transforming Infrastructure and Transforming Applications Survey, Wave 1-6
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 9Pinning Down the Cloud September 2009
Status check: IT budget is shifting to the cloud
Next 12 months Next 24 months
A third to a half of IT budget spent on cloud services
Source: Yankee Group Anywhere Enterprise: 2009 U.S. Transforming Infrastructure and Transforming Applications Survey, Wave 1-6, Large and SMB
8% of enterprises8% of SMBs
16% of enterprises16% of SMBs
91% of enterprises84% of SMBs
75% of enterprises67% of SMBs
More than half of IT budget spent on cloud services
2% of enterprises7% of SMBs
9% of enterprises17% of SMBs
Less than a third of IT budget spent on cloud services
Note: Numbers are rounded
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 10Pinning Down the Cloud September 2009
No longer hype – but concerns still exist
Source: Yankee Group Anywhere Enterprise--Large: 2009 U.S. Transforming Infrastructure and Transforming Applications Survey, Wave 1-6
0% 10% 20% 30% 40% 50%
Other/don't know
It's no more than marketing hype
Current offerings aren't suitable for myorganization
It's an enabling technology that can drivebusiness transformation and innovation
It's an evolving concept that will take years tomature
Cloud Computing: Enterprise Perceptions
• Top 3 barriers to uptake:• Security (39%)• Reliability (35%)• IT governance (33%)
• Opinion varies by vertical:
• Healthcare is very positive about transformational benefits.
• Manufacturing is most concerned about maturity.
• Finance is most likely to highlight marketing hype.
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 11Pinning Down the Cloud September 2009
Poll 2
From a regulatory standpoint, who do you work with to secure your cloud?
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 12Pinning Down the Cloud September 2009
The cloud community needs to grow up
Common Tendencies
• Cliquey• Squabbles about service
definitions and standards
• Geek-led• Focuses on tech, not
customers
• Immature• Lacks consistency of
process
Common Failings
• Transparency
• Trust
• Professionalism
Yankee Group’s review of contracts, SLAs and privacy terms of SaaS, IaaS and PaaS providers indicates much work is needed.
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 13Pinning Down the Cloud September 2009
‘As is’: Cloud contractual risk is yours to bear
GoGrid (IaaS) Offers “10,000% SLA” (e.g., failure of 15 minutes will result in 1,500-minute or 25-hour service credit).
The small print: “The maximum credit during a single calendar year, for all Service features combined, is two months' Service fees, regardless of the length of Failure or the number of occurrences.”
Risks involved in using cloud services could outweigh their benefits.
Salesboom (SaaS) CRM and ERP
The small print: “Salesboom.com shall not be liable for […] damages of any kind whatsoever, […] regardless of any party's negligence.”
Boomi AtomSphere (PaaS) Scheduled maintenance is excluded from its 99.99% uptime SLA calculation.
The small print: “Boomi further reserves the right to schedule additional Scheduled Maintenance on an emergency basis on twelve (12) hours’ notice, for not more than eight hours at a time.”
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 14Pinning Down the Cloud September 2009
Sweating the details is important
By what definition? Instance / app or whole cloud uptime SLA?
Compliance to which jurisdiction?
Independent or in-house? Live or periodic?
Who’s responsible for backups? Clue: It’s probably you.
What will it cost? How much time until data is deleted?
Excluded from uptime calculation? What notice is given?
Cash or credit? Is there a payout cap? Deadline to claim?
What limits in scope and payout are asserted?
Maintenance
Penalties
Privacy and data protection
Performancemonitoring
Data backup
Cost of migration
Limitation of liability
Uptime / Availability
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 15Pinning Down the Cloud September 2009
Governance, compliance and risk issues loom
• It’s not about obtaining five 9s in cloud services.
• Not everyone needs this.
• It’s about verifiable assurance.
• Enterprises – particularly large ones – require clarity about exposure to risk.
• Investment will be needed.• Cloud service providers need
to get wise about ICT procurement practices.
Further reading: “Regulation Meets the Cloud,” Sept. 2009
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 16Pinning Down the Cloud September 2009
Securing and monitoring clouds: Who can assist?
Performance Monitoring
Computer AssociatesIBMHyperic CloudStatusInfoVistaKeynote SystemsNimsoftTrustSaaS
IT Infrastructure Optimization
Blue CoatCiscoRiverbed
A crowded landscape of enabling cloud ecosystem vendors
Opportunities exist to secure, test, monitor, federate and orchestrate disparate cloud assets – for enterprises and cloud service providers.
SLA Management
Digital FuelSensible Cloud
Standards
Cloud Computing Interoperability ForumSLA@SOI
Test / Certification
CanonicalPink ElephantRed HatSOASTA
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 17Pinning Down the Cloud September 2009
Trusted intermediaries are needed, not cloud supermarkets
Source: Yankee Group and HP Labs, 2009
• Hot swaps between providers using business rules for cost and performance• A role for telecom operators to be prime contractors for intercloud services?
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 18Pinning Down the Cloud September 2009
Poll 3
Which type of provider is best positioned to be the trusted intermediary for cloud services?
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 19Pinning Down the Cloud September 2009
By default, private clouds may prevail
Source: Yankee Group Anywhere Enterprise--Large: 2009 U.S. Transforming Infrastructure and Transforming Applications Survey, Wave 1-6
• More than half of large enterprises prefer private clouds.
• SMBs are not far behind in preferring private clouds (47%).
• Public clouds attract only 8% of large enterprises, and 20% of SMBs.
Cloud intermediary services could shift preferences
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 20Pinning Down the Cloud September 2009
Conclusions
• Cloud computing is not hype.
• It’s a logical evolutionary step.
• Investment is rising swiftly.
• But maturity is yet to come.
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 21Pinning Down the Cloud September 2009
Recommendations
To Enterprises
• Walk away: If unsatisfied on service commitments, go elsewhere.
• Negotiate: Ask for better service levels, even if a vendor claims not to provide an SLA.
• Validate: Demand proof, particularly of security, survivability and privacy practices.
• Monitor: Deploy third-party performance monitoring tools/services.
• Diversify: Consider a hybrid public/ private cloud configuration.
To Cloud Service Providers
• Educate: Identify the business as well as operational benefits of your service to customers.
• Be transparent: Reveal processes; focus on security and service levels.
• Build trust: Improve contractual commitments and get certified.
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 22Pinning Down the Cloud September 2009
Q&A
Did you know? Despite security concerns, 64 percent of large enterprises have already deployed desktop virtualization.
Yankee Group’s Attitude & Behavior Surveys track this data and more.
Sign up for a complimentary snapshot of our most recent results at
http://www.yankeegroup.com/live/survey_data_snapshot.html
Has your organization deployed or does it plan to deploy desktop virtualization?
© Copyright 2009. Yankee Group Research, Inc. All rights reserved. Page 23Pinning Down the Cloud September 2009
Camille Mendler, Vice President, [email protected] Poon, Senior Analyst, [email protected]
Next Yankee Group webinar:
The Virtual Desktop RevolutionOctober 27, 2009Register at www.yankeegroup.com
Thank you!