the cloud -what it means to the phoenix data center community
TRANSCRIPT
Copyright © 2016 Deloitte Consulting LLP. All rights reserved. 2
• About Us
• Cloud Fundamentals
• Cloud Trends
• Impacts to the Local Data Center Community
• Closing and Q&A
Contents
Copyright © 2016 Deloitte Consulting LLP. All rights reserved. 4
DeWayne and Matthew from Deloitte’s Technology Strategy & Architecture groupIntroductions
Matthew Leybold
Matthew is a Senior Manager in Deloitte’s Technology Strategy & Architecture practice. He is a leader with Deloitte’s Cloud & Infrastructure service offering, and maintains a focus in Infrastructure Transformation, Data Center and Cloud Migration, and IT Business Management.
Matthew's most recent delivery engagements include a data center rationalization program for a global investment bank, Cloud Strategy for a Top 5 US Bank, and a private cloud sourcing strategy and design for a Top 3 global telecommunications and media provider.
DeWayne Holmes
DeWayne is a Specialist Leader in Deloitte Consulting’s Technology Strategy & Architecture Practice. He brings more than 25 years of experience focusing on architecture and design for global data center, cloud/infrastructure and IT operating model strategies to enable business transformations.
His specific skills and experiences include IT and Cloud strategy and assessments, IT architecture design and consolidation strategies, IT integration and carve-out to support M&A, program and project management, systems architecture & networking, test & verification and quality assurance. He has successfully delivered these services to both Fortune 500 and Public Sector clients.
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Our practice helps clients deliver infrastructure transformations to enable business strategies
Deloitte’s Cloud and Infrastructure Consulting Practice
We advise, design and implement hybrid cloud visions, strategies, roadmaps and architectures that incorporate a range of different cloud service delivery models
Cloud Enablement
Network & Communication
We architect, design and deliver transformational programs to increase the flexibility and reduce the cost of an enterprise’s networks
Operating Model & Autonomics
We advise on the development of next generation operating models by combining agile delivery with the power of cognitive IT to increase the speed, quality, and consistency of IT services provided to the business
Infrastructure Modernization
We select, design, optimize and transform infrastructure and Data Center facilities including Software Define Data center implementations, DR planning and strategy, and large-scale migration optimizations
Workspace & Collaboration
We develop and implement strategies for workplace services that optimize end user experience –increasing productivity and decreasing cost and administration effort
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Cloud Computing is disrupting enterprise operating models
Cloud computing Cloud computing is a new service delivery model for infrastructure capacity (facilities, compute, storage, network, etc.), that is changing the face of the Data Center hosting industry. Co-location and Managed Service Providers (MSPs) are augmenting their service offering and operating constructs to better serve enterprise demands for cloud computing services.
Cloud is impacting the way hosting providers delivery service
Think about…..
What is Cloud Computing?
According to the National Institute of Standards and Technology (NIST), cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.
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Primary Drivers for Cloud Adoption
Gain greater flexibility on architecture and sourcing, scale up and down as needed, maximize efficiency, accelerate time to value, reduce time to start up and complete projects
Increased Business AgilityShift focus from asset ownership to servicesTap into private sector innovationEncourages entrepreneurial cultureBetter linked to emerging technologies
Innovation
Use of “pay-as-you-go” model instead purchase/leaseMove IT costs from CAPEX to OPEX
Reduce IT capital spendingAs routine processes are automated through Cloud, resources can be re-positioned to higher value-add activities
Reallocation of resources
Data center providers will need to provide their customers standardized product sets, faster delivery, and a focus on service oriented delivery
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Key Characteristics of a Cloud Platform
Dynamic On-Demand Provisioning. The ability to add capability and capacity as rapidly as business requires
Scalable React quickly to increased business demand, acquisitions, or new business models without large CapEx expenditures and increased long run-off periods
Multi-Business Cloud computing delivers shared capacity across business lines, reducing duplicate environments
Self-Service Creating environments, enhancing capabilities, adding capacity with less labor and reduced lead times
Flexible Pricing Recapture capacity and spend for use in other areas as business demands fluctuates
Digital-Based Architecture Cloud architectures are based on virtualized environments defined by their use not by hardware
Customers will continue to consume a larger percentage of IT services through automated provisioning and self service capabilities
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Cloud offerings allow for hosting applications on standardized, highly automated hardware, that allows us to leverage cloud economics, compared to traditional stand alone servers and storage
Different Types of Offerings
Public Hybrid Private
Application Middleware and Mgmt
Application Host and Run
Applications
Facilities / Monitoring / Support
Networking
Servers / Storage
Virtualization
Services
Off-premisesor external
On-premisesor internal
Integrated public & private
service
Operating System
Software-as-a-Service
Platform-as-a-Service
Infrastructure-as-a-Service
Software that provides a specific built-for-purpose business service to the client
Ready-to-use scalable. integrated app & data hosting
Horizontally scalable compute, storage and networking delivered to an application on-demand
Data center providers will need to continue to focus on delivering Infrastructure Services, supporting connectivity with Public Cloud providers, and offering additional value added services
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Cloud services are now tailored to specific internal business functions. Leveraging these services allows the customer to focus on inexpensive, efficient alternatives
The Cloud Marketplace is Rapidly Evolving
SaaS PaaS
CRM Marketing Demand Generation Human Resources Finance & Accounting Content Management
Enterprise Social Media Marketing Analytics Retail & E-Commerce Collaboration Business Intelligence
Vertical
Information Technology
IaaS
IaaS ProvidersPaaS Providers
Service Providers
Data center providers need to continuously understand and evaluate the cloud landscape in order to understand key integration points, complementary providers, and competition
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Providers in each area remain fragmented, but leading research firms demonstrate a consensus around certain leading vendors
Cloud Provider Market Share
MicrosoftMkt Share: 10%
IBMMkt Share: 3.4%
Service NowMkt Share: 3%
OracleMkt Share: 2.0%
GoogleMkt Share: 1.9 %
PaaS
FY15: $3.8BFY19: $7.3B
CAGR: 17.4%
SalesforceMkt Share: 24%
AmazonMkt Share: 16.8%
OthersMkt Share: 36.0%
IaaS
FY15: $32.8BFY19: $54.3BCAGR: 13.4%
Private IaaS1
Mkt Share: 37.2%Led by VMware, IBM, HP, and Redhat
AWSMkt Share: 17.1%
MicrosoftMkt Share: 10.2%
IBMMkt Share: 7.4%
OthersMkt Share: 22.5%
GoogleMkt Share: 3.6%
OracleMkt Share: 2.7%
Rackspace% Mkt Share: 2.4
SaaS
FY15: $31.6BFY19: $63.1BCAGR: 18.9%
Salesforce :Mkt Share
10.8%
Others2
Mkt Share: 56.6%
SAPMkt Share: 4.9%
AdobeMkt Share: 6.1%
MicrosoftMkt Share: 7.9%
CiscoMkt Share: 1.7%
IBMMkt Share: 2.7%
CitrixMkt Share: 1.4%
OracleMkt Share: 3.1%
WorkdayMkt Share: 1.7%
Athena HealthMkt Share: 1.7%
ServiceNowMkt Share: 1.4%
PaaS: Integration middleware & Database PaaS: Application Key:
SaaS: CRM SaaS: Productivity Applications ( Office, Content Mgt., Collaboration Communication)SaaS: ERP SaaS: Business Process as a Service
SAP’s forecasting to have ~75% of total revenue coming from cloud by 20205
EUC emerging (Office 365 holds ~25% of market with 300% YoY growth; Google Apps for Work holds 22.8% market)6
In emerging Private PaaS, Pivotal Cloud Foundry has booked ~$40 million in software sales in less than a year, making it fastest growing open source product ever (Apprenda has ~$8M)7
AWS significant in Public IaaS market 69% YoY growth; 28.5% profit margins8
Microsoft, showing triple digit YoY growth of 140%, has independence restrictions9
Private IaaS supporting OpenStack standards with VMware and IBM leading
*CAGR = Compound Average Growth Rate
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Spend shows that cloud infrastructure services are most directly impacting data center providers but also presenting an opportunity to capture growing private/hybrid cloud spend
IT Spending Shifting Towards Cloud
PaaS is emerging as a critical enabler of
Agile/Lean and Application
Rationalization
AppDevDBMS
App Runtime& Middleware
$3.8B2
2015 Spend
BusinessIntelligence
$2.5B64% 30.80%
11.46%
18.17%
13.46%
0% 5% 10% 15% 20% 25% 30% 35%
PaaS SpecificCAGR (2014-2019)2
Database Mgmt Systems
AppDev
Middleware
BI
Cloud Only
SaaS abstracts the full technology
stack so customers can leverage
applications on demand
CRM
BI
ERP
Web &Collab
Other
$12.5B40%
35.30%
15.60%
20.90%
11.40%
0% 10% 20% 30% 40%
SaaS SpecificCAGR (2014-2019)2
Web/Collab
BI
CRM
ERP$31B2
2015 SpendCloud Only
IaaS changes the way vendors
consume facilitiesand infrastructure
capacity
$98B4
2015 Spend
Traditional ITPrivateCloud
PublicCloud
InfrastructureCAGR (2014-2019)4
Traditional IT-1.65%
16.69%
13.81%
-5% 0% 5% 10% 15% 20%
Private Cloud
Public Cloud
$67.1B67%
$32.9B 33%
Growing demand to productize industry and functional solutions to fill-in gaps
Increased demand for enterprise integration as clients adopt multiple solutions
Cloud AppDev (CAD) on PaaS represents a major opportunity to capture
Growth in big-name SaaS into public PaaS (e.g. Force.com, ServiceNow)
Clients trending towards turn-key private PaaS offerings (e.g. Pivotal, Apprenda)
Spend on transitional capabilities from legacy to cloud significant
Public / Hybrid IaaS requires significant spend on multi-layer security architecture
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Spending on cloud computing infrastructure and platforms will grow at a 30% CAGR from 2013 through 2018 compared with 5% growth for the overall enterprise IT
Cloud Computing is trending toward Hybrid Operating Models
Cloud Adoption Hybrid is the Path Forward
82% (up from 74% in ’14) of enterprises have a multi-cloud strategy Hybrid cloud is the choice for most enterprises
TextPublic Cloud Only
30% 58% 5%
Public and Private
Private Cloud Only
Public –88%
Private – 63%
93% of respondents are using cloud
3%
Single private
Single public
Multi-cloud
No plans
55%
13%14%
Hybrid cloud
Multiple public
Multiple private
Enterprise Cloud Strategy 1000+ Employees
AWS Continues Its Public Cloud Domination, but Azure Makes Inroads Private Cloud Stalls in 2015, VMware remains in the lead overall
2%
5%
5%
5%
8%
9%
11%
12%
57%
5%
8%
10%
16%
13%
13%
9%
17%
17%
6%
7%
8%
13%
10%
13%
9%
12%
7%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
HP Helion Public Cloud
IBM SoftLayer
Vmware vCloud Air
Google IaaS
Google App Engine
Azure PaaS
Rackspace Public Cloud
Azure IaaS
AWS
RunningExperimentingPlan to use
Public cloud usage – Percentage of respondents running applications Private cloud usage 2015 vs 2014 – Percentage of respondents running applications
0%
6%
11%
12%
12%
31%
7%
8%
10%
13%
13%
33%
0% 5% 10% 15% 20% 25% 30% 35%
Microsoft Azure Pack
Citrix CloudStack
Microsoft System Center
OpenStack
Vmware vCloud Suite
Vmware vSphere
2015
2014
Public Cloud Applications Private Cloud Applications
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The enterprise adoption of cloud requires changes to the service delivery model of Data Center hosting providers
What is the impact of Cloud to Data Center Operators and Hosting Providers?
• Shift from Legacy Infrastructure “Towers” to Converged Infrastructure Platforms – Vblock, Flexpod, Microsoft CPS, etc.
• New Infrastructure Standards for Greenfield Facilities Builds – e.g. Open Compute Project, Uptime Institute
• Hosting Vendors Enabling Private Cloud – significant adoption of private cloud, especially in highly regulated industries (Financial Services, Life Sciences and Healthcare)
• Enterprise Embrace of Hybrid Cloud – key on-premise vendor selection criteria includes connectivity and pipeline to public Cloud Service Providers (e.g. AWS, Azure, Google)
• Co-location Trending toward Managed Services – many providers are providing value added services on top of real estate/Ping-Power-Pipe, to include Telco/Integrated Cloud Services/Managed Data Center services
• “Rehosting” of Public Cloud Services – Many Data Center providers deliver “on-premise” cloud services for other vendors (e.g. SUPERNAP/Switch maintain 100+ such services)
• Requirements for a Cloud-Enabled Network – Cloud WAN, Software-Defined Networking, etc., are emerging to provide an on-premise backbone for private cloud as well as enable hybrid cloud requirements (e.g. Active Directory Federation Services)
• “Out of Region Requirements” – Phoenix facilities present an attractive option fulfilling out-of-regional requirements (e.g. AWS West Coast)
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Amazon Web Services Google Cloud Microsoft Azure
Cloud providers are building data centers in locations that balance cooling efficiency, cost of power, resource availability, and proximity to end users
Cloud Data Center Locations
Sources: amazon.com, google.com, microsoft.com
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SDDC is a shift on how Data Centers are built and operated, with the focus shifting from operation and management of compute, network and storage resources to a business application centric vision
Software-Defined Data Center
All infrastructure is virtualized and delivered as a service & the control of this is entirely automated by software Software Defined Data Centers brings significant value to enterprises by offering solutions for the following needs
Scalability at lower cost of ownership through migration to white box switching Agility and flexibility of network programming Ability to integrate with cloud management platforms
Current State Target State
Fully Virtualized Data Center
Software Driven – Dynamic Management / Allocation of
Resources
Fully Automated Service OrchestrationMix of
Virtual and Physical Compute
Physical Network
Physical Storage
Semi-Automated Service Orchestration
Manual Service Orchestration
Manual Service Orchestration
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Legacy Architectures
ASICs
Proprietary transport protocols
Custom Hardware
Custom Software Packages
Emerging Architectures
Increasingly commoditized hardware managed by software services
Open Source / Community driven software suites
Whitebox compute / switch
The Data Center Landscape is Evolving for Cloud
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