The Politics Of Cloud Computing

ITC Market Research Report ITCandor 2010

The ‘Politics’ Of Cloud ComputingEvolving Managed Services Adoption In Medium Sized Companies

Martin Hingley

IT Candor Limited

Email: [email protected]

Web Site: http://itcandor.com/


Agenda

• Some Market Sizing

• Outsourcing, Managed Services and SaaS Spending

• The Development Of Cloud Computing

• ‘Political’ Considerations

• Forecasts And Conclusions


UK Cloud Computing developments

• NGD opens a massive Cloud Computing data centre in Newport – BT and Logica become customers

• HP opens and new air cooled data centre in Wynyard

• Centrix Software offers Workspace Discovery and Workspace iQ

• Quest Software builds monitoring and metering products

• HP, IBM and Fujitsu help with Implementation Services and SaaS mainly for large organisations

• Citrix continues to build ‘client access’ offerings, big plans for Cloud

• DataScape Online offers self-service SaaS

• Double-Take Software offers Recovery as a Service

• Storage Online considers offering online storage

• FNZ offers Platform as a Service

• Fasthosts launches Rise SaaS for SMBs


The Effect of The Credit Crunch on UK IT Spending Growth (£)

• Consumer and small businessspending remains positive

• Medium and large business spending remains negative

• Market development is clouded by exchange rate movements

Medium Companies

Small Companies

Consumer

Total IT Spending-10%

-5%

0%

5%

10%

15%

20%

25%

2008 2009

LargeCompanies

Source: ITCandor, 2010


The Declining Value of The Pound

• The massive collapse in the value of the Pound

• Is nearing parity with Euro

• Two dollars to a pound in 2007 is one and a half today

• This is making IT kit more expensive in the UK

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009


£/€

£/$


Medium Company Quarterly Spending on IT Service and Software (£m)

• Medium sizedcompanies have 100-1k employees

• IT usage varies between advanced and non strategic

• Implementation Services is biggest category

• Spending on Internet Service larger than on Application Software

• Outsourcing/ Managed Service and SaaS are growing fastest£0

£100

£200

£300

£400

£500

£600

£700

£800

£900

£1,000

2008 2009

ImplementationService

Internet Service

Application Software

Outsourcing/Managed Services

Software Maintenance

Hardware Maintenance

Infrastructure Software

Operating System

Software as a Service



Medium Company Quarterly Spending on IT Hardware (£m)

• Networking is largest category

• PC is small and similar to spending on Converged Device

• Storage Systemsand Servers are now the smallest categories

• Hardware spending is growing in H1 2010

PC

ConvergedDevice

Networking

Peripheral

Server

Storage System

£0

£50

£100

£150

£200

£250

£300

£350

2008 2009Source: ITCandor, 2010


The Varying Needs of Four Types of Cloud Computer Participants

• Finance Directors also have to consider data protection, environmental and other laws

• CIOs have a difficult task in managing a mixed environment

• End-users have lots of SaaS experience as consumers

• Software Developers use the evolving ecosystem

• These groups often compete for resources and don’t always talk to each other!

End-User

Data CenterManager/CIO•Infrastructure as a Service•Hardware•Management•Virtualization•Cluster•Grid

•Web Apps•Self Service•Pay-per-Use

•Utility Computing•Software as a Service

Cloud ComputingPublic/Private

Software Developer•Internet-wide Distribution

•Scalable Deployment •Free Development

•Simplified SDK

Financial Director

•Maximise Value•Enforce SLAs

•Manage Supplier Contracts

•Balance Cap Ex v Op Ex



Cloud Computing Supplier Participants by Type and Example

• Lots of Infrastructure development

• Large businesssoftware suppliers offer SaaS versions

• Hostingcompanies offering data centre space and/or dedicated resources

• Telecoms suppliers will find Cloud easier than general IT services

• Plenty of scope for ‘cross the park’ selling to different user types

Cloud ComputingSuppliers

Outsourced Data CentreGoogle Microsoft

AmazonAskNCD HP

OS and MiddlewareGoole Java

Python VMWare

Websphere Redhat

Citrix VMWare

Microsoft

HardwareCisco

Dell

EMC

HP

IBM

Rackable

Sun

VerariMetering/BillingSalesforce

SAS

Fujitsu Software

ApplicationsMicrosoft

Salesforce

Google Mail

Quicken

TelecomsBT

T-MobileOrange

VodafoneNTT

Cloud ComputingSuppliers

Microsoft

AskHP

OS and Middleware

Salesforce

T-



The Developing Cloud Computing and Hosting Ecosystem

• Cloud development ecosystem is split into 3 camps –Lamp, Azure and JAVA

• Offerings are split in three horizontal layers – IaaS, PaaS and SaaS

• Can be used to design new or ‘Cloudify’ existing corporate applications

facebook

hulu

Windows Live

Bing Google Apps

python

JAVA

php

LinuxLinux

Xen

VMWare ESX Hyper-V

IIS7

.Net

php MySQL

Apache

memcached

hadoop

Linux-V

SQL Server 2008

ApplicationLayer (SaaS)

MiddlewareLayer (PaaS)

OS and/orHypervisor(IaaS)

Lamp* WindowsAzure

JAVA



Virtualising Client Computing for Cloud Computing

• Cloud Computingand Client Virtualisation are highly connected

• Users want Smart Phone access to corporate applications – not just email

• PCs can be used as thin clients

• Users want fully functional PCs

• Citrix, Redhat, Microsoft and VMWare are leaders in client virtualisation

Laptop

Desktop

Thin Client

Smart Phone

Client Devices Virtual Clients

Local VM

Streamed

External Hosted

Internal Hosted



The Pitfalls of Cloud Computing

• Cloud Computing is in its infancy – has not yet helped in the shift from Capital to Operational Expenditure

• It is being adopted from the ‘bottom up’ – consumers and small businesses use SaaS for social networking and office where no technical expertise is expected

• Modifying corporate computing usually requires significant consolidation activities first

• Data Protection, Environmental laws are often not addressed by US developments

• Location issues are vital for Managed Services and Outsourcing success

• You can get just as locked into pay-as-you-go as other services


The ‘Politics’ Of Cloud Computing – Some Conclusions

• The UK IT market is in recession and the failing Pound makes IT expensive

• Cloud Computing is the hottest IT subject in years

• Outsourcing, Managed Services and SaaS are small but are the fastest growing spending areas for medium companies

• Implementation services include systems suppliers helping convert internal IT into private Cloud

• Cloud Computing ‘politics’

– The needs of financial directors, CIOs, software developers and end-users all differ

– Suppliers will begin to sell ‘cross the park’ to exploit differences of opinion inside organisations

• Cloud Computing can be seen as a natural extension of Managed Services and Outsourcing

• Client Virtualisation and Cloud Computing are linked

• Issues of security, location, responsibility and compliance need addressing

• As always it’s better to partner with companies you know and trust ExternalUsers(mainly)

InternalUsers(mainly)

Cloud Computing

PublicCloud

PaaS

IaaS

SaaS

…aaS

ServiceProvider

ISVHosting(Telco)

IT Supplier

Implementation

Consolidation

Modernisation

Virtualisation

PrivateCloud

InternalUsers

ExternalUsers

Cloud Computing

PublicCloud

PaaS

IaaS

SaaS

…aaS

ServiceProvider

ISVHosting(Telco)

IT Supplier

Implementation

Consolidation

Modernisation

Virtualisation

PrivateCloud

ExternalUsers(mainly)

InternalUsers(mainly)

Cloud Computing

PublicCloud

PaaS

IaaS

SaaS

…aaS

ServiceProvider

ISVHosting(Telco)

IT Supplier

Implementation

Consolidation

Modernisation

Virtualisation

PrivateCloud

InternalUsers

ExternalUsers

Cloud Computing

PublicCloud

PaaS

IaaS

SaaS

…aaS

ServiceProvider

ISVHosting(Telco)

IT Supplier

Implementation

Consolidation

Modernisation

Virtualisation

PrivateCloud

Martin HingleyIT Candor LimitedEmail: [email protected] Site: http://itcandor.com/

Technology

The Politics Of Cloud Computing