cloud computing -strategic case study

8/7/2019 cloud computing -Strategic Case Study

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Strategic turn to monetize

cloud computingCase Study for Strategic Management


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ABSTRACT

Cloud computing has the potential to be the next major driver of business

innovation, as it promises to enable new business models and services across almost

all industries, especially telecommunications, healthcare and government. As well

as it opens new customer segment to cloud provider. Cloud has the potential to

become the next major driver of business innovation by enabling entirely new

business models across a wide range of industries. The cloud computing market will

include offerings sold as a service such as business processes, software, platform,

and infrastructure. And many of these cloud services will be consumed through a

pay-per-usage pricing model. The cloud market is appealing to new entrants notonly because of its size and growth, but also due to the business potential it brings

to a company. Cloud providers benefit by accessing new customers and markets,

improving their deployment times, potentially lower their costs and achieving new

revenue streams.

We have analyze cloud service provider strategies by evaluating their business

models for cloud computing services/offerings, strategies operations and target

customers.


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WHAT IS CLOUDCOMPUTING

Cloud computing i Int net ed computing, whereby shared

resources, software, and information are provided to computers and

other devices on demand.

Cloud computing describes a new supplement, consumption, and delivery

model for IT services based on the Internet

The concept behind cloud computing is very simple: itlets you run your business

computer applications over the Internet, without having to buy, install or manage

your own servers. You can run your companys IT operations with nothing more

than a browser and an Internet connection. Applications, operating systems, servers

and network switches all are available from within the cloud.

The benefits of adapting Cloud Computing for any business are great. Here

are some of them.

y Quickturnaround or deploymenttime to be up and runningy Increased availability of high-performance applications to small/medium-

si ed businesses Applications like ERP, CRM or ecommerce applications

which were out of reach for Small and Medium businesses are now

available at a fraction of a cost.

yReduced implementation and maintenance costs since you pay as you go !

y Increased Storage on demand / Flexible and scalable infrastructuresy Greening ofthe data center/ Reduced Energy costsy Highly Automated - No longer do IT personnel need to worry about

keeping software up to date.

y GreaterMobility to your Workforce - Employees can access informationwhereverthey are, wheneverthey want.

y Allows Businesses to Focus on their core competencyy Optimum Performance - The cloud adjusts to your companys performance

needs, dynamically assigning capacity whenever and wherever you need

them, and automatically adjusting to spikes in your business.

y Security For many companies, the level of security and availability,disaster recovery and back-up provided by a software-as-a-service provider

far exceeds that which they can provide themselves.


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Element consider to form winning strategyfor cloud market

To win in the cloud market requires an innovative business strategy and business

model. The strategies reflect a rethinking of market fundamentals and truly envisionnew models to better serve customers.

We will see a wide range of cloud business models emerge overthe next few years,

and most ofthese will likely fail. Ofthe ones that survive, the profitability ofthe

business models will vary greatly. A few winning business models will maintain

healthy profit margins while others will find themselves relegated to much smaller,

commodity-based profit margins

There are three key components that define cloud business models:

CUSTOMER FUNCTION: Cloud Delivered Services- what a company sell i.e.

their product

CUSTOMER GROUP: Target Markets- to whom it would be sell i.e. their

customers

TECHNOLOGY:Operations- how to create and deliver what one sell

And to successfully implementation of business model a good strategy would be

require. Strategy of all cloud vendors would be to create long-term value.

________________________________________CUSTOMER FUNCTION: Cloud Delivered Service

The first component of a cloud provider strategy is to clearly outline the service that

will be offered. Most cloud enabled solutions will have four layers in their

solution stack:

Content

Process and applications

Integration and middleware

Infrastructure and devices

Cloud provider mainly tries to outline competitive advantage for each layer. These

layers divide the cloud marketinto following sub market:-

Business-Process as a Service (BPaaS). Deliver an entire business process

as a service via the Internet. Examples include payroll, printing and e-

commerce from providers.


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Software as a Service (SaaS). Deliver a standardi ed application running ona cloud infrastructure, with multi tenancy, accessible from various client

devices through a thin client interface such as a Web browser (e.g., web-

based email). Target customer would be ENDUSER

Platform as a Service (PaaS). Build and deploy new internally developed

applications onto cloud infrastructure, exposing services needed to build an

effective application including billing and sign-on services used by

APPLICATION DEVELOPER

Infrastructure as a Service (IaaS). Obtain processing, storage networks, and

other fundamental computing resources as a service where the consumer is

able to deploy and run elements ofthe stack, such as operating systems, on

the infrastructure service. Mainly for NETWORK ARCHITECTS

Since A single company does not have to be the owner or operator of all four

solution layers. Hence, a key part of developing a cloud strategy is to define

which component(s) you will provide and which components will be provided

by a business partner thats why partnership-based business models normally

seen in cloud market.

In addition to direct cloud services, there is a wide range of support cloud services

and components typically offered by outside providers, such as consulting firms,

but also delivered by cloud service providers themselves. These services includetraining and consulting For example, SalesForce.com offers training and consulting

to complementits SaaS and PaaS offerings.

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CUSTOMER FUNCTION-Target market

There are many potential target markets for cloud adoption Most current cloud

providers narrow down their respective markets to some combination of the

following segments:

Industry or Functional Verticals among Large Enterprises

While currently focused more on internal cloud enablement some large enterprises

will migrate toward adopting shared cloud verticals that reduce cost or riskin areas

that are importantto the business, but are not key sources of differentiation, such as

back office functions or regulatory compliance. For example, pharmaceutical

companies could join forces via an industry vertical cloud focused on regulatory

compliance to drive cost savings and efficiency.


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SMBs

Many workloads offer the least pain and most significant gain for the SMB

segment. Cloud providers are targeting smaller customers who can benefit from

clouds compelling economies of scale, and who are less hindered by large, existing

IT capabilities. Financial services companies have strong relationships with their

customers, and could use this delivery model for business services

Emerging Markets

With limited resources, customers in developing markets will respond to the lower

up-front investment costs and ability to scale service consumption in times of

growth. For example, automotive manufacturers could use cloud to reach

dealerships in distant markets.

Other Cloud Providers

Cloud services serve as building blocks, where a provider sells one cloud service to

another cloud providerto construct a larger service offering. IaaS providers often

align with SaaS providers to jointly deliver a more comprehensive cloud services.

Such as Red Hat sell their platform to Microsoft.

Consumers

Mobile devices, online email and other consumer services benefit from numerous

new applications made available through cloud delivery models.

The another choice for cloud provider that whether establish their market for a

public cloud or provide a private cloud.

Well demand is rising for public cloud services around HR benefits procurement, e-

commerce, data warehousing and archiving.

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TECHNOLOGY-Operation

The operations component of a cloud business modelincludes the development of

key elements needed to deliver business services via the cloud. This includes

business operations and financial reporting designed to be more agile by more

quickly engaging customers, tailoring services to fit customer needs pricing for

smaller units of a service, and establishing a viable financial model.

The operating model of the business strategy defines the sourcing model,

partnership strategy, and deployment plan forthe development ofthese capabilities.

Many providers are pursuing strategic partnerships to round out their capabilities

and achieve the operational requirements associated with rapid service delivery.

Alliances and partnerships are often keys to success in the cloud ecosystem.


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STRATEGY

Service provider strategies focus towards address pricing models, go-to-market

approaches, business intent and value propositions, in addition to defining servicesand customers.

Current cloud providers are capitali ing on first-mover advantage. They are

delivering services, learning from their mistakes, and capturing market share along

the way. Some oftheir success has been at the expense of traditional players who

have not ventured into the cloud marketplace.

One of the defining aspects of cloud computing is pay-per-use pricing models.

However, variations are possible within this basic tenet of cloud. For example,

some providers priced base on their brand and reputation ratherthan purely basedon hourly usage rates.

The challenge is determining how to measure this value and how to capture that

value through pricing.

Some cloud providers are offering cloud-based services directly to customers.

Others are acting as enablers and integrators by providing their products and

services as building blocks for other cloud service providers to then sellto their own

customers.

Another consideration for go to market strategy is targeting the right decision

maker for the particular type of service delivered. Providers have tailor their

offerings and value proposition based on the target buyer. Cloud providers are

deploy new services to their customers in days .

Well main focus is to differentiate their product.

Let us consider cloud offering of few vendors to understand how different cloud

vendor differentiate their product and targeted to whom, and what are their

strategies to sustain in market forlong run and their competition.


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1.Amazon

Type ofCloud: Public Cloud

Type of Service:IaaS

Key Offerings:EC2 , S3, Simple DB and Map Reduce

Specializes in IaaS. It offers through Amazon Web Services (AWS): AmazonElastic

Compute Cloud(EC2), AmazonSimpleDB, AmazonCloudFront, AmazonSQS. It claims to

have 82 billion objectsstoredin AmzonS3 (SimpleStorageService)

As ondate theyare the onlyprovider to offereverything .

Amzaon is the undisputed winner, without any much competition till now. We maycallit an early-bird advantage.

2.Microsoft

Type of Cloud: Private Cloud,Public

Type of Service: SaaS,PaaS and IaaS

Key Offering: Online Service, Windows Azure Platform and Windows Server

Hyper-V,Office Window apps.

Specializes in PaaS. It offers Azure, a Windows-as-a-service platform consisting

of the operating system and developer services that can be used to build and

enhance Web-hosted applications. Azure is available for VS 2008 viaWeb

Platform Installer. Visual Studio 2010 Beta 2 has all the features we need to

code, debug, and deploy our cloud service.

Microsoft strategy has the right portfolio and articulates the right story to allthe

entities in the ecosystem. Microsoft has always dominated is the operatingsystem. It started on the desktop, moved to the server, and now it is moving

into the cloud

Microsoft made a majorleap with the release ofOffice Web Apps, a cloud-based

version ofits Office software. Web Apps lets users to upload documents from their

computerto Microsofts cloud-based Docs.com, and allows accessibility from anymachine or device. Here the documents will also be stored in remote serverinstead

of being stored only in personal computers, laptops or company server. Except for

the security factor of sharing important files on the web, it will prove to be a good

improvement.


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__________________________________________________________________

Microsoft charge price for the components of its Azure cloud computing platform,which is consumption-based computing costs are slightly lower than Amazon's

costs, but, Amazon's Linux-based service undercuts Microsoft's Windows pricing.

However, Amazon's Linux-based offering is $0.10 per computing hour, and it also

charges slightly less for storage than Microsoft. There are many analyses going on

around the web about how these pricing strategies will play out over time.

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3.Google

Type of Cloud:Public CloudType of Service: Saas and PaaS

Key Offerings: Google Apps and Google App Engine

Specializes in PaaS & SaaS. As SaaSit offers Google Apps: a web-basedcommunication, collaboration & security apps which includes, Gmail, Google

Calendar, Google Talk, Google Docs & Google Sites. 15 Sep 2009, Googleannounced that it will provide GovCloud, which will host Google Apps in aseparate data environment with enhanced encryption for meeting state andgovernment security standards.

As PaaS it offers Google App Engine: a platform for developing and hosting webapplications in Google-managed data centers. Currently, the supportedprogramming languages are Python andJava (by extension otherJVM languagesare also supported).

You build your application using Googles PaaS and Google handles deploying

code to a cluster, monitoring, failover, and launching application instances asnecessary. Good news, Google App Engine is free, but only up to a certain level ofused resources.

Googles strategy is to put its presence in as many clouds as possible. Hence thecompanys launch of products such as Living Stories project in the news media,

promotion of Google Apps in the enterprise market and recently the launch ofGoogle Groups, a productthatis integrated with the existing Google Apps such asGoogle Docs, Google Calendar, Gmail, Google Sites and Google Video.

As part of its cloud strategy Google wants to use Google Groups to make theproduct more attractive to the enterprise sector since one of the products mainfeatures is project collaboration among employees located in diverse sites. Thisreport also looks at Google Trends and Insights and how they are tied to Googles


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strategy in building an established presence on the Internet cloud. It also analyzesGoogles future online strategy and demonstrates its relation to the cloud.

______________________________________________ _____________________

Microsoft and Google have been in a very public debate over which cloud-basedprogram is the better of the two. Most people agree that the latest versions of both

Google Docs and Microsoft Office 2010 are both very good, very solid pieces ofwork.But what makes Microsoft a little better is its ease of use. Microsoft has taken its

popular ribbon interface and extended it to all of Office 2010s programs. So the

users who upgrade will feel familiar with the new programs. Microsoft says the

ribbon interface helps to find options quickly and reduces clutter on the screen,

which saves users time. The fact that Word is worlds most widely used editing

software adds to the little better factor however Microsofts attempt to step into

the cloud might be small and a little late.

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While all the competition is giving you either a specific suite of applications (Google

Apps, Salesforce.com) or component blocks (Amazon EC2), Microsoft Azure is at the

heart a platform.

4.IBM

Types of Cloud:Private CloudType of Service: SaaS and PaaSKey Offering:Lotus Live and IBM Web Sphere Cloud Burst Appliance

The Big Blue has announced Blue Cloud computing platform way backin the year

2007. IBMSmart Business Development and Test on the IBMCloud is designed

to augment and enhance software development and delivery capabilities,

particularly in large enterprises. On 16 Nov 2009, IBM announced the worlds

largest private cloud computing environment.The cloud will launch initially with

more than a petabyte of data, the equivalent of more than 300 billion ATM

transactions.

Strategy :- Having a strong partnership model.

5.Salesforce.com

Type of Cloud:Public Cloud

Type of Service: SaaS and PaaS

Key offering: Salesforce.com CRM and Force.com


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Leader in SaaS. Offers SalesforceCRM (Sales Cloud 2, Service Cloud 2)& Force.comPlatform (Custom Cloud 2, DevelopmentPlatform).Targeting SME

market, it has niche and unique offering.

6.VMware

Type of Cloud:Private Cloud

Type of Service: IaaS

Key Offerings: VCloud

It offers vCloud: Run, secure and manage applications in the private cloud or havethem federated on-demand to partner-hosted public clouds. vCloudis giving atough competition to more established Amazons AWS.

It was recently in the news forpartnership with Cisco & EMC, to offer equipment

called Vblocksand support a new joint venture called Acadia that will help

business customers and service providers build out clouds based on the Vblock

gear packages

Well,having positioned it as a strong Virtualization platform vendor , they become

the natural choice ofPrivate Cloud.

7.Tera

Offers Cloud Ware: architecture to provide an open framework to allow thedevelopment of a cloud computing environmentthats open enough to work on anyweb/enterprise application. Lack of cloud computing standards has lead toa vendor-lock, where every cloud vendor has proprietary cloud. Whatif we wanttoshare our application among different vendors/clouds? Currently we cant.

Cloud Wareis a big step towards bridging the clouds, and creating standardswhich will lead to open environment for clouds. Hope, soon consumers will beable to move around with their application and data, that will span multiple clouds.


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8. NetSuite

Specializes in SaaS. It offers Suit CloudPlatform: a comprehensive offering ofon-demand products, development tools and services designed to help customersand software developers take advantage of the significant benefits of cloudcomputing. Also a leading provider of web-based Business Software Suite forCRM, ERPtools and Accounting.

Above companies are out of the best player in the world.

Cloud offering by Indian Vendor

9.Zenith InfoTech

y Base Location: Mumbai, Indiay Cloud Offering: PROUDy Cloud Type: IaaS

It is an IT product development and innovation company. With an investment ofINR 175-crore, this is considered as Indias one ofthe most ambitious R&D effortsin IT. The company is expecting 2,000 - 3,000 clients ofProud in next 2 years.

10.Wolf Frameworks

y Base Location: Bangaluru, Indiay Cloud Offering: WolfPaaSy Cloud Type: PaaS

Founded in 2006, it provides affordable cloud service with 99.97% Service LevelAssurance. Wolf is a browser based On Demand Platform-as-a-Service (PaaS) forrapidly designing and delivering database driven multi-tenant Software-as-a-

Service (SaaS) applications. One can get started without writing any piece of codewhatsoever. Coding only comes in when you need custom templates or specificintegration Business Rule actions.


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11.OrangeScape

y Base Location: Chennai, Indiay Cloud Offering: OrangeScape Cloudy Cloud Type: PaaS

The experience of building business applications of varying complexity acrossindustries has made OrangeScape the most comprehensive PaaS (Platform as aService) offering in the market. You can transform your idea into a SaaSapplication and can showcase them to your investors, partners and potentialcustomers. It has an impressive list of customers viz. Ford, Pfizer, Geojit, Sify etc.

12.TCS

y Base Location: Indiay

Cloud Offering: ITaaSy Cloud Type: IaaS+SaaS

ITaaS is a Nanoin software. ITaaS frameworkis a one-stop shop for total end-to-end IT and hardware solutions. It includes hardware, network, bandwidth &business software. Currently ITaaS is available for 5 sectors: Manufacturing,Retail, Healthcare, Education and Professional Services.

13.Cynapse India

y Base Location: Mumbai, Indiay Cloud Offering: Cyn.iny Cloud Type: IaaS on Demand SaaS

Cyn.in on demand is a cloud hosted service and is the quickest way to get yourown cyn.in server, without the hassles of having to set it up. With a Cyn.in on-demand system, you get a dedicated virtual server running a Cyn.in appliance thatis maintained & updated by Cynapse and hosted by Amazon, ensuring aninfrastructure-free and worry-free Cyn.in experience.

14.Wipro Technologies

y Base Location: Indiay Cloud Offering: Wipro w-SaaSy Cloud Type: SaaS


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Wipro has built w-SaaS, a platform for rapid SaaS enablement and deployment oncloud, using some of the commonly accepted trends in software engineering and

open standards. Wipro chose Oracle (Oracle Database, Oracle WebLogicApplication Server and Oracle VM) as the deployment platform for w-SaaS

enabled applications. The software vendor can deploy the same application on-premise or on the cloud using w-SaaS and Oracle.

15.Netmagic Solutions

y Base Location: Mumbai, Indiay Cloud Offering:Cloudnet, Cloudserve, PrivateCloudy Type: IaaS

Netmagic looks like a dedicated cloud providerin Indian market with a potentialtobecome a big playerin near future.

16.Reliance Data Center (a division of Reliance Communications)

y Base Location: Indiay Cloud Offering: Reliance Cloud Computing Services y Cloud Type: IaaS+SaaS+PaaS

A hosted infrastructure service based on theMicrosoft platform for Enterprisesand SMBs - geared to deliverIndias largest cloud infrastructure.

17.Infosys Technologies

y Base Location: Bangalore, India.y Cloud Offering: Cloud based Solution for Auto Sector.y Cloud Type: SaaS

Infosys Cloud Computing Consulting and Service offerings enable organizationsto adopt the Cloud Computing platform selectively and effectively. But brandInfosys, the most recognized IT brand from India has to put significant efforts tocatch up with other cloud providers.

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.Synage

y Base Location: Mumbai, India.y Cloud Offering: DeskAwayy Cloud Type: SaaS


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A Web company delivering software as a service (SaaS) over the Internet to theglobal audience.DeskAwayis the flagship product of Synage, based on a monthly

or yearly subscription model, requiring zero-installation, and powered by a cutting-edge userinterface, Its the future of project & team collaboration software.

Though the companies listed here have a long way to go before they can be

compared with the best in the world yet they have the potential to grow big with

the growing Indian economy.


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CONCLUS ON

Cloud computing offers a distinctly new level of scalability and a new degree of

business value made possible by the maturation of technologies and standards.Scalability results in a host of benefits that will make cloud computing a permanent

shift in the how products and services are delivered.

We think the recipe for success of cloud computing will require exploring any kind

of cloud business model coupled with the right partnership strategy, because

strategic alliance are particularly important for creating more robust cloud services,

as alliance aggregate different providers unique strength.

cloud computing -strategic case study

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