generating demand: a summary on enterprise it buying in the early cloud era

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Generating Demand: A Summary on Enterprise IT Buying in the Early Cloud Era February 2011

© All Rights Reserved

© All Rights Reserved to WaveLength Market Analytics LLC and Winn Technology Group Inc.

Goals and Methods •  To inform demand generation programs by

understanding penetration, concerns and motivators, apps and IT strategies, buying habits and partner involvement, and future plans

•  Large and medium-sized enterprises to understand key differences among 3 segments: ▫  Pioneers: Using or testing a cloud

solution ▫  Planners: Planning for a cloud solution ▫  Stragglers: Not planning a cloud

solution at this time •  Study characteristics •  IT decision-makers – IT VPs, Directors •  Sample size = 126 •  Data collected Summer 2010 •  Developed in partnership between Winn

Technology Group & WaveLength Market Analytics

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Executive Summary •  Goals & Methods: To inform demand generation programs by

understanding penetration, concerns and motivators, apps and IT strategies, buying habits and partner involvement, and future plans

•  Many Technology Segments Competing for the Customer •  Cloud Market Adoption & Penetration ▫  41% are Pioneering with their Cloud Apps, and another 17% are actively planning

meaning, 58% are doing “something” in the Cloud while the rest are Stragglers ▫  Pioneers already outsource more than Planners and far more than Stragglers ▫  Most common models: private Clouds and PaaS ▫  Cloud apps not yet mission critical ▫  Pioneers mostly migrate legacy apps

•  Moving the Market: Motivators & Barriers ▫  Top motivators: cost cutting & speedy application deployment ▫  Reduced control is top security concern for Pioneers ▫  Experience with Cloud has shown more to worry about over network

performance than security, as…Pioneers find network delays a bigger concern than security

▫  Network is underlying infrastructure getting most Evaluation… from all market segments

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Executive Summary •  Going to Market ▫  In selecting partner for Cloud services, professional services is most critical for

both Pioneers and Planners ▫  Buying behaviors typical of shifting market: high involvement of top

management & trusted 3rd parties ▫  Planners involve more tech segments than Pioneers in Cloud implementation ▫  … But, overwhelmingly system integrators most important partner for Pioneers

while its software for Planners ▫  Brand, ability to manage, application features/functions, monitored service

levels will become key service differentiators ▫  Generating demand will require fewer, but more substantive partners

•  Enter the Early Cloud Era… ▫  Many say ROI & deployment speed expectations not met…yet still Pioneers are

largely satisfied with their Cloud solution ▫  No turning back…Pioneers and Planners both estimate that around 30% of their

IT will be in Cloud By 2015 ▫  For every enterprise, no longer a question of If… only when, what, and how? ▫  Simple tips for generating demand during the early Cloud era: target the right

audience with the right message

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Many Technology Segments Competing for the Customer

Software Vendors

Hardware Vendors

Telecom Service

Providers

Managed Services/IT Outsourcing

Providers

Systems Integrators

IT as a Service

Cloud Services-enabling Products & Services Consulting & Professional Services for Cloud

Communications as a Service

= Business model re-alignment and sales channel challenges for entire industry

Software as a Service

Pure Cloud Vendors


Shift to Cloud Architectures Well-Underway En

terp

rise

Clo

ud

Pene

trat

ion

• Although degree of penetration into IT is unknown, more enterprises implementing or planning “something” in the cloud than those that are not

•  Enterprises don’t want to be left behind

• Cloud Pioneers profile: • Large, publicly traded or private

company • Higher than average number of

remote workers or many smaller branch offices

• Higher than average number of mobile workers

Adop

tion

& P

lann

ing • Cloud apps are those that were

“born” of the Internet, such as email, collaboration, and customer relationship management

• Mission-critical enterprise cloud apps nowhere on the horizon

• Continuum of clouds will exist, as some clouds more suited to certain apps than others

• Public clouds & hybrids models are closer than they appear

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Brand, Ability to Manage, Application Features & Functions, Monitored Service Levels Will Become Key Service Differentiators Ch

anne

ls

• Imperative to own the customer had never been stronger • Hardware & network companies will be increasingly under pressure as the primary

decision-maker changes from the enterprise to the enterprise’s data center partner, but brand can become an important component of the apps or data center’s service sale

• Telcos need to avoid the temptation of rapidly entering the market with large systems integrator/IT outsourcing partners that will ultimately compete with them

• All vendors interests would be well-served by educating their best channel sales partners

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Generating Demand Will Require Fewer, but More Substantive Partners

Tech

nolo

gy

Part

ners

hips

• Cloud is mostly about application delivery, so the strong role of software vendors is not surprising

• Storage and app vendor partnerships will be increasingly important • Server and network vendors would be well-served by developing

closer relationships with application vendors • Network hardware vendors can best support their telco customers

in service delivery by avoiding direct competition with them •  Integrators, consultants, and other distribution partners needs to

development cloud services management capabilities

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For Every Enterprise, No Longer a Question of If… Only When, What, and How?

•  For Pioneers, adopting cloud to stretch IT dollars…. •  Even as cloud solution falls short of

ROI & speedy deployment expectations •  And Still satisfied

•  For Planners who plan more advanced cloud models bringing new & legacy apps to the cloud •  For Stragglers with NO cloud plans, but

expect 11% of IT to be in the cloud in a few years

•  Welcome to the vida loca in the Early Cloud Era

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Simple Tips for Generating Demand During the Early Cloud Era

Target the Right Audience

Don’t bother with organizations with fewer than 1000 employees at this

point in the market

Enterprises with high levels of outsourcing, & key technologies like SANs, server & storage virtualization

Educate & partner with your best solution partners

Don’t ignore enterprise’s top business management

Use the Right Message

Position your message as to how your solution addresses and helps remote

and mobile workers

Make sure you highlight your professional services capabilities and

strengths

Address motivators as speed of deployment and cost reduction

Address concerns of security risks, reduced control, & network

performance

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generating demand: a summary on enterprise it buying in the early cloud era

Documents

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