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, & 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

• Complete results available in March 20112


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 4


Many Technology Segments Competing for the Customer

Software Vendors

Hardware Vendors

Telecom Service

Providers

Managed Services/I

T Outsourci

ng Providers

Systems Integrator

s

Infrastructure as a Service Cloud Services-enabling Products &

ServicesConsulting & Professional Services for

Cloud

Communications as a Service

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

Software as a ServicePlatform as a Service

Pure Cloud Vendors


Shift to Cloud Architectures Well-Underway

Ente

rpri

se C

loud

Penetr

ati

on • 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

Ad

opti

on &

Pla

nnin

g • 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 DifferentiatorsC

han

ne 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

hip

s

• 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 need to develop 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

• They are Still satisfied with it• For Planners – they are planning

more advanced cloud models bringing new & legacy apps to the cloud

• For Stragglers with NO cloud plans, they 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

Look for organizations 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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WaveLength Market Analytics LLCwww.wlanalytics.com415.519.7030

© All Rights Reserved

Thank you

Winn Technology Groupwww.winntech.net

727-789-0006

Watch for our full-length report &

presentation in March 2011

http://www.wlanalytics.com/

http://www.winntech.net/