mid-markets in the cloud: how cloud providers can capture the undertapped opportunity
DESCRIPTION
An analyst briefing delivered by program director Lynda Stadtmueller on mid-markets in the cloud.TRANSCRIPT
Mid-Markets in the Cloud: How Cloud Providers Can Capture the
Undertapped Opportunity
Lynda Stadtmueller
Program Director, Cloud Computing
Lynda Stadtmueller, Program Director
Today’s Presenter
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Lynda Stadtmueller, Program Director
Frost & Sullivan
•About the Mid-Markets
•The 2011 Frost & Sullivan Cloud User Survey: Mid-Markets
Firmographics
•MidMarkets in the Cloud: Adoption & Perceptions
How Cloud Service Providers can Tap the Mid-Market Potential
Focus Points
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•How Cloud Service Providers can Tap the Mid-Market Potential
100-499 employees
U.S. market size:
90,000 companies
� IT needs are identical to large
business in scope, if not scale
� But they have fewer resources (people,
budget) to address those needs
� They approach cloud as part of a
About the Mid-Markets
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360,000 locations
17 million employees
(Source: 2008 U.S. Census)
� They approach cloud as part of a
bigger, data center decision
�Tech-savvy, nimble & creative
� And willing to spend on value.
• Enables IT to support business growth and compliance
requirements
• Budget-friendly – Reduce/defer capital expenditures; reduces need
for specialized staff
• Scalable – Supports market agility and business fluctuations
Mid-Markets are Well-Suited to the Cloud
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• Scalable – Supports market agility and business fluctuations
Yet most providers target their services and marketing toward large businesses.
Owner or C-Level
Executive20%
VP or Director
31%IT
Manager or
Supervisor
Other31%
Financial Svcs/
Insurance33%
Healthcare32%
High Tech13%
Education5%
Other17%
Title Industry
Web-based survey of 300 U.S.-based IT decision-makers conducted April 2011. Mid-Markets = 77 respondents.
Frost & Sullivan 2011 Cloud User Survey: Mid-Market Respondents
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Supervisor18%
Single18%
2 to 439%
5 to 921%
10 to 1919%
20+3%
Number of Locations5 years or less
9%
6-10 years12%
11-15 years13%
16-20 years9%
21-50 years32%
More than 50 years25%
Company Existence
N=77Source: Frost & Sullivan
Not very Familiar
33%
Familiar with and Plan to
Implement Within the Next 24
Familiar with and Currently
Use13%
1/3 are cloud believers1/3 are unfamiliar1/3 are unconvinced about cloud
Mid-Markets In the Cloud: Familiarity and Usage
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Familiar with but No
Plans to Implement
37%
Next 24 Months
17%
N=77Source: Frost & Sullivan
Less than $25,000
36%
$301,000 -$600,000
12%
$601,000 -$1 million
6%
Over $1 million
1%
What is your estimated budget to implement your cloud computing/data center strategy for
2011?
�20% of mid-market respondents
have budgeted over $300,000 to
implement cloud/data center
strategy in 2011.
�30% have increased their budgets
Mid-Markets Are Willing to Spend on Data Center/Cloud
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36%
$20,000 -$100,000
27%
$101,000 -$300,000
18%
from 2010 to 2011.
�65% of budgets have remained the
same.
� Only 5% have decreased their budgets.
N=77 Source: Frost & Sullivan
22%
26%
32%
34%
40%
42%
49%
Lack of funds for training
Reduction in capital budget
Slow/poor performance of applications
Growth of data storage requirements
Minimizing downtime/ increasing availability …
Aging, inefficient servers/ eqpt
Keeping up with new technology
Mid-markets struggle to keep up with new technology and keep apps running.Large businesses struggle with storage.
Top Data Center Challenges: Mid vs. Large
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19%
0% 10% 20% 30% 40% 50% 60%
Delivering apps to remote users
Mid-sized businesses (N=77)
34%
49%
40%
55%
31%
24%
0% 10% 20% 30% 40% 50% 60%
Growth of data storage requirements
Keeping up with new technology
Minimizing downtime/increasing availability of apps
Large (N=99) Mid (N=77)
Source: Frost & Sullivan
10%
14%
24%
33%
33%
38%
38%
38%
62%
Decrease IT Staff
Strive to Go Green
Shift from Capital to Operating Budget
Defer Server Purchases/ Upgrades
Improve Security/Compliance
Earn a High Return on Investment
Prepare for Disaster Recovery
Strengthen Business Continuity
Defer/Avoid Expansion of Data Center …
Mid-markets seek to avoid capital costs for data center expansion.Large businesses seek to bolster business continuity.
Top Drivers to Cloud Adoption: Mid vs. Large
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10%
0% 10% 20% 30% 40% 50% 60% 70%
Decrease IT Staff
Mid (100-499) N=21
38%
62%
63%
32%
0% 10% 20% 30% 40% 50% 60% 70%
Strengthen Business Continuity
Defer/Avoid Expansion of Data Center Facilities
Large (500+) N=19 Mid (100-499) N=21
Source: Frost & Sullivan
14%
14%
19%
19%
19%
19%
24%
48%
52%
Open source platform
Consistent pricing
App performance SLAs
Low price
Easy to use mgmt system
SLAs for data loss/ leakage
Private (dedicated) cloud option
Ease of migration to cloud
Availability (uptime) SLAs
Mid-Markets expect the provider to keep apps running and help with migration.Large businesses want to control security.
Top Criteria in Selecting a Cloud Provider: Mid vs. Large
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14%
0% 10% 20% 30% 40% 50% 60%
Managed service options
Mid (100-499, N=21)
5%
48%
52%
42%
21%
21%
0% 10% 20% 30% 40% 50% 60%
Escalating tiers of security options
Ease of migration to cloud
Availability (uptime) SLAs
Large (500+) N=19 Mid (100-499) N=21
Source: Frost & Sullivan
An independent consultant/ VAR
22%
My data center A cloud services
provider
A managed services provider
9%
Hypervisor vendor6%
A security services provider
6% 88% of mid-markets will get outside help to develop and implement their cloud strategy.
Who Will Mid-Markets Turn to For Cloud Strategy Assistance?
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My data center infrastructure provider
22%
My network service provider
13%
We'll do it ourselves12%
provider10%
� Approach mid-markets with a broad view of data center environment: traditional,
hosted, private & public cloud.
� Fortify cloud offers to simplify the configuration/decision.
� Align marketing messages with mid-market needs (e.g., focus on deferral of
capital investments and minimal labor requirements).
� Don’t oversimplify the technology or understate the risks. Instead, help construct
Tapping the Mid-Market Potential for Cloud Services
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� Don’t oversimplify the technology or understate the risks. Instead, help construct
a risk-benefit analysis.
� Provide professional or managed services to help mid-markets develop strategy
and manage implementation.
Mid-markets are poised to burst into the Cloud.Don’t miss the opportunity to serve them!
� Request a proposal for or Growth Partnership Services or Growth
Consulting Services to support you and your team to accelerate the growth of
your company. ([email protected]) 1-877-GoFrost (1-877-463-7678)
� Join us at our annual Growth, Innovation, and Leadership 2011: A Frost &
Sullivan Global Congress on Corporate Growth (www.gil-global.com)
Next Steps
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Sullivan Global Congress on Corporate Growth (www.gil-global.com)
� Register for the next Chairman’s Series on Growth: Driving Innovation – The
What, Why, and How. Visions and Benchmarks as the Innovation Key
(October 5th) (http://www.frost.com/growth)
� Register for Frost & Sullivan’s Growth Opportunity Newsletter and keep
abreast of innovative growth opportunities
(www.frost.com/news)
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For Additional Information
Mireya Espinoza
Corporate Communications
Information & Communication Technologies
(210) 247-3870
Craig Hays
VP of Sales, North America
Information & Communication Technologies
(210) 247-2460
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Lynda Stadtmueller
Program Director
Cloud Services