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Cloud ComputingThe Evolution of IT

17 March 2010

IDC Cloud Computing Conference

Moscow

Mar-10© IDC 2

Agenda

Market OverviewWhat Is the State of Cloud Computing Today

Competitive HighlightsVendor Comparison and SWOT Analysis

Future OutlookThe Impact of Cloud on the Future of the ICT Industry

Mar-10© IDC 3

Cloud Services Definition

Consumer and business products, services, and solutions

delivered and consumed in real-time over the Internet

Cloud Services

Public - open to a largely unrestricted universe of potential users; designed for

a market, not a single enterprise

Private - designed for, and access restricted to, a single enterprise (or

extended enterprise); an internal shared resource, not a commercial

offering; IT Org is the “vendor” of the shared/std service to its users

Deployment

Models[Note: large gray zones

between these

two broad categories]

Shared, standard service – built for a market (public), not a single customer

Solution-packaged – a “turnkey” offering, integrates required resources

Self-service – admin, provisioning; may require some “on-boarding” support

Elastic scaling – dynamic and fine-grained

Use-based pricing – supported by service metering

Accessible via the Internet/IP – ubiquitous (authorized) network access

Standard UI technologies – browsers, RIA clients and underlying technologies

Published service interface/API – e.g., web services APIs

Key

Attributes

Mar-10© IDC 4

Three Core Principals of Cloud Computing

Abstraction

CAPEX OPEX

Scalability

Mar-10© IDC 5

IT Cloud Services Taxonomy

Cloud

Applications(Apps-as-a-Service)

Cloud(Application)

Platforms(Platform-as-a-Service)

Cloud

Infrastructure(Infrastructure-as-a-Service)

App DeployApp Dev/Test

Mar-10© IDC 6

How Cloud Layers Map to Use Cases

Cloud

Applications(Apps-as-a-Service)

Cloud(Application)

Platforms(Platform-as-a-Service)

Cloud

Infrastructure(Infrastructure-as-a-Service)

Application Development Software

Application Server Middleware

Data Access, Analysis, and Delivery

Information & Data Management

Integration & Process Automation Middleware

Other Application Dev and Deployment

Quality & Life-Cycle Tools

Enterprise Portals

Servers

Storage

Networks

Clients

System and Network Management Software

Security Software

Storage Software

System Software

Collaborative Applications

Content Applications

Enterprise Resource Management Applications

Supply Chain Management Applications

Operations and Manufacturing Applications

Engineering Applications

Customer Relationship Management Applications

Use Cases

Mar-10© IDC 7

Cloud Architecture

Hybrid• Enterprise’s cloud services

portfolio includes both private

and public cloud services

• Some specific services are

delivered through a

combination of public and

private models (e.g., private

cloud “bursting to” a public

cloud service)

Public• Designed for a

market, not a single

enterprise

• Open to a largely

unrestricted universe

of potential users

Private• Designed for, and access

restricted to, a single

enterprise (or extended

enterprise)

• An internal shared

resource, not a commercial

offering

• IT Org is the “vendor” of

the shared/std service to

its users

Mar-10© IDC 8

Cloud Services as a % of IT

Worldwide IT Spending by Consumption Model

IT Cloud Services

On-Premise IT

5%

10%

CAGR

26%

4%

44

17

0

100

200

300

400

500

600

2009 2013

Wo

rld

wid

e IT

Sp

en

din

g (

$ b

illio

n)

359

416

Source: IDC, September 2009

Mar-10© IDC 9

IT Cloud Services Forecast Update

Applications49%

App Dev/Deploy

10%

Storage

9%

Servers12%

Infra-

structure Software

20%

Applications38%

App Dev/Deploy

13%

Storage14%

Servers15%

Infra-

structure Software

20%

Worldwide IT Cloud Services Revenue* by Product/Service Type

* Includes revenue from delivery of Applications, Application Development & Deployment Software, Systems Infrastructure Software,

Server capacity and Disk Storage capacity via the Cloud Services model; AD&D excludes online B2B messaging

providers/exchanges

2009

$17.4 billion

2013

$44.2 billionSource: IDC, September 2009

Mar-10© IDC 10

Cloud Services Growth Impact

460.4

433.1

430

435

440

445

450

455

460

465

470

475

480

485

2012 2013

Wo

rld

wid

e IT

Sp

en

din

g (

$ b

illio

n)

Net new IT growth

= $27.3 billion

IT Cloud

IT Cloud Services growth

Traditional IT product growth

27%

73%

Source: IDC, September 2009

Sources of Incremental IT Spending Growth in 2013Cloud vs. Traditional Products

Mar-10© IDC 11

Today an Optimally Run DC Beats Cloud Costs in the Long Run, but…..

£0.00

£5,000,000.00

£10,000,000.00

£15,000,000.00

£20,000,000.00

£25,000,000.00

£30,000,000.00

Start

up

cost

Year

1

Year

2

Year

3

Year

4

Year

5

Year

6

Year

7

Year

8

Year

9

Year

10

Data Centre

Cloud

In H2 2009, IDC analyzed the costs of running 100% of a typical

large businesses IT infrastructure in a DC versus the cloud:

After year 3,

cloud costs

exceeded the

DC

Final Score

DC: £15M

Cloud: £26M

Even with 3 year

refresh cycles of 30%,

DC remains much

cheaper

Mar-10© IDC 12

Poorly Run DCs Can Very Quickly Dwarf Cloud Costs

£0.00

£5,000,000.00

£10,000,000.00

£15,000,000.00

£20,000,000.00

£25,000,000.00

£30,000,000.00

£35,000,000.00

£40,000,000.00

£45,000,000.00

£50,000,000.00

Start

up

cost

Year

2

Year

4

Year

6

Year

8

Year

10

Data Centre

Cloud

Most businesses’ DCs are a far cry from completely optimized.

A worst case scenario of the analysis shows a different picture:

DC reaches space

capacity in year 3.

50% refresh to high-

end servers required

Year 6 requires build

out for new facility +

expensive refresh due

to limited space

Cloud costs are

dynamic – even if bad

decisions are made

initially capacity can be

ramped up linearly

Mar-10© IDC 13

Summary: The State of Cloud Services Today

Cloud services will be a key strategic technology that stands to

rapidly grow in importance over the next 3 years. Most

important points for planning include:

Today Cloud Applications (SaaS) remains the most mature

technology, but Cloud Infrastructure and Platforms will develop

rapidly

The price of cloud services will decline further as more vendors

launch offerings, and competition increases

Cloud services promise vastly more efficient and productive IT

operations within business equating to more efficient business

processes in general

Mar-10© IDC 14

Agenda




Mar-10© IDC 15

Cloud LandscapeVendor Strategies & Backgrounds

Traditional IT

Cloud IT

Infrastructure

Platform

Software

IaaS

PaaS

SaaS

Cloud

BusinessGoogle Amazon

SalesForce.com

IBM

Microsoft VMware

Azure vCloud

App

Engine

Google

Apps

EC2

Force.comComputing

On

Demand GoGridRackspace

Mar-10© IDC 16

IBM Compute On Demand Overview

Product Name

Year of

Launch

Cloud Service

Type

Compute on Demand

Infrastructure as a Service

2002

Strengths Weaknesses

Opportunities Threats

Very strong global reach, and support for a

wide range of platforms

Long experience and large degree of

investment into service by IBM

Standards-based approach, but not agreed

to by some key vendors

Offering made for large enterprises and

government

Flexible variable cost model, with options

for hourly, weekly, and annual rates

Wide range of security and management

tools within the offering

IBM focus broadening to “Dynamic

Infrastructure” offerings

Focus on buying into complete solution

Mar-10© IDC 17

Amazon Web Services Overview

Product Name

Year of

Launch

Cloud Service

Type

Amazon Web Services


2006



Utilizes Amazon’s IT infrastructure – 15 years

of development and hundreds of millions

invested

Highly flexible, supports wide range of

programming models, OS’ and DBs

Persistent storage costs extra – must use

Amazon EB3 or S3

Support seems expensive versus alternatives

ranging from $100 USD to $400 USD per month

Great for applications that require heavy

processing for short duration delivering big

savings

Continued build out of platform enabling

greater capabilities and easier usage

GoGrid, Google App Engine, and IBM offer

competing services

Amazon lacks customer relationship with

enterprise IT buyers

Mar-10© IDC 18

Rackspace CloudServers Overview

Product Name

Year of

Launch

Cloud Service

Type

Cloud Servers


March 2006



Allows combination of cloud and dedicated

servers

Standards-based approach to API based on

DMTF

Currently only available in US

Currently only supports Linux instances

(Windows instances in beta)

Global expansion leveraging Rackspace’s

DCs in UK and Asia

One of the most open and flexible APIs

Limited tools means lots of manual

monitoring and optimization

Overlap and differentiation from hosting

business

Mar-10© IDC 19

GoGrid Cloud Hosting Overview

Product Name

Year of

Launch

Cloud Service

Type

Cloud Hosting


April 2008



Very high performance specs versus other

platforms

Free support, and management tools

Majority of operation US-centric – not yet a

global player

No dynamic scaling for workloads

Flexibility: allows pure cloud hosting and

hybrid hosting

API supports Java, Python, PHP, and Ruby

Smaller vendor, means potentially uncertain

future

100% uptime guarantee has lots of fine

print

Mar-10© IDC 20

Windows Azure Overview

Product Name

Year of

Launch

Cloud Service

Type

Windows Azure

Platform as a Service

Beta since July 2009 – launch Feb 2010



Built to allow applications to run in cloud, or

partly on premise and partly in cloud

Uses Visual Studio SDK. Extensive

automation features built in

Limited support for non Microsoft OS’,

programming languages, and DBs

Current cost model problematic if only

running small applications

Easy leap for businesses standardized on

Microsoft

Automation features for load balancing, VM

management, mean lower barrier for entry

Main competition at the moment coming

from Amazon and Google

Current reliance on Microsoft development

stack may scare users (lock in)

Mar-10© IDC 21

Force.com Overview

Product Name

Year of

Launch

Cloud Service

Type

Force.com


September 2007



Developers can build on existing

salesforce.com data objects, security

models, user interfaces, etc.

Over 130,000 custom apps deployed

Less control over platform versus

alternatives

No on-premise option – can only run in

salesforce.com hosted environment

Integration with 800+ salesforce.com apps

ISV partnerships with BMC, and CA allows

more routes to market

Upper limit on growth??? Platform versus

salesforce.com’s core business

Potentially very limiting in terms of

portability

Mar-10© IDC 22

Google App Engine Overview

Product Name

Year of

Launch

Cloud Service

Type

Google App Engine


Beta since April 2008



Free to start: 500 MB storage, and 5 million

page views per month

Automatic scaling and management. No

VM tailoring required, just write your app

Python is main development language.

Java is supported but not all classes

No support for relational DB; must use

Google Bigtables

Extremely low barrier for entry, ideal for

pilots and testing

Still in Beta – expect development of new

features

Strong lock in potential. Powerful but non

standard APIs

Still in Beta…..

Mar-10© IDC 23

VMware vCloud Overview

Product Name

Year of

Launch

Cloud Service

Type

vCloud


August 2009



Extension of VMware DC technology,

potentially very good fit for VMware

customers

Growing eco-system of partners

Still in very early stages of building out

partner offerings

Some aspects of the technology still under

development

Good fit for businesses wishing to develop

hybrid cloud architecture

Compelling argument for portability given

that eco-system of providers will all use

same underlying platform and standards

Support for hypervisors outside of VMware

at the moment is limited (and could remain

so)

Will take time to develop capabilities that

already exist in other offerings

Mar-10© IDC 25

Comparing the Two Key Aspects of Current Cloud Offerings

Automation Adaptability

STRENGTH Lower Cost: Easier

migration &

management

Capable of running almost

any type of system,

regardless of development

platform or infrastructure

WEAKNESS Inflexibility in

development and

infrastructure

environment

Significant effort required to

migrate, optimize and

manage system within cloud

environments

Cloud providers today can be compared on two metrics:

Automation and Adaptability. The basic strengths and

weaknesses of each approach:

Mar-10© IDC 26

Cloud User Surveys - Challenges

Q: Rate the challenges/issues of the 'cloud'/on-demand model

Source: IDC Enterprise Panel, 3Q09, n = 263, September 2009

(Scale: 1 = Not at all concerned 5 = Very concerned)

76.0%

76.8%

79.8%

80.2%

81.0%

82.9%

83.3%

87.5%

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

Not enough ability to customize

Hard to integrate with in-house IT

Bringing back in-house may be difficult

Lack of interoperability standards

On-demand paym’t model may cost more

Performance

Availability

Security

Mar-10© IDC 27

The Inhibitors Businesses Recognize for Cloud Adoption

Security

Encryption and security protocols

Ensuring secure multi-tenant access to data

Resilience against virus attack

Availability

How do we measure availability in the cloud? What does up time actually mean and how do we measure it?

Availability versus usability – the users suppliers perspective versus the users perspective

Bandwidth

Ensuring accessibility across the country / region / globe

Build out of wireless networks (3G/LTE and WiMax)

Mar-10© IDC 28

The Real Problems on the Horizon That Will Make or Break Cloud Services

Standards

Common standards on development, deployment, and migration/transition

Ability for businesses to move a system from one cloud to another – no lock In

Differentiation

Different providers with different value propositions – big vendors, telcos, hosting providers….

Specialization and the emergence of best-of-breed providers in specific areas

Competition

Price competition and eco system competition

No one dominant winner

Mar-10© IDC 29

The Fragmentation of Cloud Services

Multi Purpose

Clouds

High

Security

Cloud

High

Availability

Cloud

Test &

Dev

Cloud

HPC

Cloud

Comms

CloudLow Cost

Cloud

Today The Future

Mar-10© IDC 30

What Will the Future Look Like?

Assuming the vendors take the natural path towards open standards and then are required to differentiate, businesses should expect the following:

The costs of cloud services will drop even further as economies of scale ramp up

No clear cut dominant winner. The era of cloud computing will embody a more fractured landscape of technology providers

Vastly more efficient and productive IT operations within business equating to more efficient business processes in general

cloud computing the evolution of it€¦ · a market, not a single enterprise private-designed for,...

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