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Why It’s Time to Move to the Clouds. Jeffrey M. Kaplan Managing Director THINKstrategies, Inc. Why We Are Here… Is Technology an Enabler or Inhibitor?. Primary Market Drivers. Changing economic conditions Changing competitive forces Changing ecological concerns

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why it s time to move to the clouds

Why It’s Time to Move to the Clouds

Jeffrey M. Kaplan

Managing Director

THINKstrategies, Inc.

primary market drivers
Primary Market Drivers
  • Changing economic conditions
  • Changing competitive forces
  • Changing ecological concerns
  • Changing workplace requirements
  • Changing technologies
  • Changing priorities & sourcing policies
the shortcomings of legacy on premise apps
Deployment Challenges

31.1% of SW projects cancelled before completed.

52.7% of projects cost nearly 190% of original estimates.

Operational Costs

Maintenance & management costs=>10x license fee.

Escalating hardware & staff support costs.

Over provisioning and under-utilization of SW licenses

Economic/Budgetary Pressures

Need to reduce IT costs and increase business benefits.

Need to increase utilization to gain greater ROI.

The Shortcomings of Legacy,On-Premise Apps
changing customer expectations
Changing Customer Expectations

New,

  • Flexible, Operating Expense
  • Simplicity, Utilization
  • Rapid Time-to-Value
  • Vendor Management
  • More Analytics
  • Out-Tasking Options

Old,

  • Fixed, Capital Investment
  • Complexity, Customization
  • High TCO, Uncertain ROI
  • Internal Support
  • Limited Visibility
  • Outsourcing Alternatives
shift from outsourcing to out tasking
Shift from Outsourcing to Out-Tasking

Businesses seeking functionality, not technology.

IT outsourcing deals have failed.

Selective outsourcing, or ‘out-tasking’ gaining attention.

SaaS, managed services & cloud computing are forms of out-tasking.

saas managed services cloud computing inter related out tasking alternatives
SaaS, Managed Services &Cloud Computing Inter-relatedOut-Tasking Alternatives

Out-Tasking Alternatives

SaaS

Cloud

Computing

Managed

Services

enabling technologies
Enabling Technologies

Service management

Web services & APIs

Security

Virtualization

Open Source Solutions

Blade Technology/Grid computing

Broadband networks

today s perfect storm
Today’s Perfect Storm

The

Economy

Enabling

Technologies

Shifting

Customer Attitudes

defining saas
Defining SaaS

Subscription-Pricing

Continuous Enhancements

Built-In, Real-Time Analytics

Rapid Deployment/Self-Provisioning

User-Centric Process Orientation

One-to-Many Software Design

Network-Based Delivery

Services-Oriented Applications

Multi-Tenancy

an historical perspective
An Historical Perspective

Cloud-Based Services

Outsourcing

Market Penetration

Facilities Mgmt

ASPs/MSPs

2010

2000

1970

1980

1990

Year

why simple hosting fails
Why Simple Hosting Fails

Multiple Customers

ASP/Hosting Company

Too Complex

Not Scalable

Limited Value-Add

Updates/Upgrades

the advantage of multi tenancy
The Advantage of Multi-Tenancy

SaaS Vendor

Scalability

Cost-Efficiencies

Rapid Innovations

saas adoption beyond a tipping point
SaaS AdoptionBeyond a Tipping Point

62%

32%

2007

2008

% of Respondents Using SaaS

Source: THINKstrategies/Cutter Consortium

customer satisfaction renewal referral rates
Customer Satisfaction, Renewal& Referral Rates

Source: THINKstrategies/Cutter Consortium

>90%

shifting adoption patterns
Shifting Adoption Patterns

Unilateral End-User, SBU Adoption of SaaS Solutions

Enterprise-Wide Acceptance and Adoption of SaaS

recent mega deals
Recent Mega-Deals

= 500,000 suppliers

“We evaluated a number of alternatives, but Aravo SIM was the best commercially-available solution capable of meeting our complex, global needs” - SVP and CIO of GE

= 420,000 end-users

"The Enterprise Cloud Computing business model is a strategic direction for us. It not only lowers IT costs, and creates faster end to end processes, but can also grow with our requirements both globally and locally.“

- Head of Corporate IT, Siemens AG

new government view
New Government View

“I’m all about the cloud computing notion. I look at my lifestyle, and I want access to information wherever I am. I am killing projects that don’t investigate SaaS first.”

President Obama’s CIO, Vivek Kundra, WSJ 3/9/09

welcome to gartner s slope of enlightenment
Welcome to Gartner’s ‘Slope of Enlightenment’

Gartner’s Hype Cycle

You are here.

market adoption forecast
Market Adoption Forecast

Laggards

Mainstream Buyers

Market Penetration

Early Adopters

Innovators

2006

2008

2010

2012

saas expands from front to back to inter office apps
SaaS Expands from Front- to Back- to Inter-Office Apps

Back Office

Front Office

Inter-Enterprise

ERP

Finance

CRM

SFA

Collaboration

Supply-Chain

BUSINESS APPLICATIONS

Market ‘Cloud Rush’

saas expands from business apps to it management
SaaS Expands from Business Apps to IT Management

Back Office

Front Office

Inter-Enterprise

ERP

Finance

CRM

SFA

Collaboration

Supply-Chain

BUSINESS APPLICATIONS

Data Protection

Storage

Security

Systems Mgmt

Network Mgmt

Remote Access

IT Management

why it is attracted to saas
Why IT Is Attracted to SaaS

Most IT organizations spend 75-80% of their time reacting to problems, keeping systems and software up and running. They would prefer to focus on more strategic business initiatives.

saas penetrating it management market
Traditional NSM = ERP of the IT World

Too complicated

Too expensive

Too time-consuming

Too ineffective

>150 IT/Application Mgmt solutions on SaaS Showplace.

SaaS Penetrating IT Management Market
managed services vs saas
Managed Services vs. SaaS

SaaS

  • Provider delivers software functionality
  • Sold on a per user basis
  • Focus on application availability & performance
  • Quicker Time-to-Value
  • Lower TCO/Higher ROI
  • Shifts Burden to Provider

Managed Services

  • Provider assumes management responsibility
  • Sold on an per device basis
  • Focus on network/system availability & performance
moving from saas apps to cloud computing
Moving from SaaS Apps to Cloud Computing

Cloud Computing Services

“Top Strategic Technology for 2010”

But what does “cloud computing” mean?

SaaS Apps

key customer concerns industry responses
Key Customer Concerns & Industry Responses

Responses,

  • SLAs
  • Certifications
  • User Configurations
  • DR/BC
  • Connectors
  • Online/Pro Services

Concerns,

  • Reliability
  • Security
  • Customization
  • Compliance
  • Integration
  • Customer Support
balancing a hybrid world
Balancing a Hybrid World

Companies prefer choice.

Businesses seeking combination of on-demand/on-premise solutions.

Variety of appliances and applets becoming available.

Cross-platform integration possible.

Cloud location-independence becoming bi-directional.

private internal clouds
Private/Internal Clouds
  • Benchmarking Market Leaders
    • Amazon
    • Facebook
    • Google
    • Salesforce.com
  • Adopting Best Practices
    • Standardization
    • Simplification
    • Automation
    • Agility
cloud computing market evolution
Cloud ComputingMarket Evolution

v1.0

v2.0

  • Focus on individual user
  • Standalone point apps
  • Horizontal applications
  • Emphasis on ease of use/price
  • Cloud only deployment
  • One size fits all, minimal customization
  • Limited interoperability
  • Emphasis on lower TCO
  • Proliferation of providers
  • Best-of-Breed Win
  • Focus on the enterprise
  • Scalable, secure platforms
  • Vertical/industry solutions
  • Emphasis on added functionality
  • Location independence
  • Multiple configurations, greater versatility
  • Greater integration capabilities
  • Emphasis on higher ROI
  • Industry shake-out & consolidation
  • Strategic Sources Win
does cloud disintermediation
Does Cloud = Disintermediation?
  • Direct Sales/Delivery Model
  • Focus on Simplification/Ease-of-Use
  • Automated, Self-Provisioning Capabilities
  • Ease of Deployment/Configuration
  • Emphasis on Time-to-Value
  • Business vs. Tech Support Requirements
  • Lower Price Points/Tighter Margins
good news
Good News
  • SaaS vendors seeking channel partners to,
    • Extend reach
    • Penetrate new accounts
    • Create industry-specific solutions
  • Cloud computing is creating confusion
    • IT/business decision-makers need help understanding & leveraging cloud solutions and services to achieve corporate objectives.
change your business
Change Your Business

IT

Services

Business

Services

Information

Services

Business Evolution

how you can capitalize on the cloud
How You CanCapitalize on the Cloud
  • Augment internal operations
  • Test new applications/services
  • Handle spikes in demand
  • Expand service portfolio
  • Broaden partner relationships
platforms as a service paas
Platforms-as-a-Service (PaaS)

App Engine

S3 & EC2

Social Applications

CPU and Storage

Web Applications

Enterprise Applications

benefits of cloud enabled channel companies
Benefits of Cloud-Enabled Channel Companies
  • Lower Upfront Costs
  • Mitigate Risks
  • Accelerate Deployment
  • Quicker Time-to-Value
  • Lower Total Cost Of Ownership (TCO)
  • Higher Return on Investment (ROI)
  • Greater Flexibility and Agility
  • Create Additional Market Opportunities
added dimension of cloud computing services
Added Dimension of Cloud Computing Services

Collaboration

Communications

Community

Customer

Experience

©2009, THINKstrategies, Inc. www.thinkstrategies.com

Slide 45

a new level of value in the cloud market
A New Level of Valuein the Cloud Market

Dynamic clearinghouse of solutions

Continuous updates, new ideas

Real-time, aggregated data

Meaningful benchmark studies

Practical best practices forums

Build a “club”, gain a competitive advantage

©

new cloud players
New Cloud Players?
  • Banks
  • Insurance Companies
  • Retailers
  • Accounting Firms
  • Lawyers
  • BPOs
  • Hosting Companies
  • Telcos
prepare for the cloud inversion
Prepare for the Cloud Inversion

Future

The

Cloud Computing

Inversion

Services

Technologies

Past

saas cloud computing changes everything
SaaS/Cloud Computing Changes Everything

Re-architecting applications

Re-structuring revenue models

Repositioning marketing

Re-orienting sales/support staff

common pitfalls
Common Pitfalls

Balancing,

  • Multiple Offerings
  • Various Delivery Models
  • Competing Buyers
  • Conflicting Sales Channels
  • Varying Compensation Plans
  • Differing Revenue Recognition Models
cloud computing lifecycle requirements
Cloud Computing Lifecycle Requirements

User Centricity

Ecosystem of Partners

Service Orientation

Professional Services

Agile Development

Web Support

Service Delivery Infrastructure

Online Procurement

Security

Certifications

Tele-Sales

‘Try & Buy’ Trials

SLAs

Web/Search Marketing

Transaction Mgmt System

building proper target market segmentation
Building Proper TargetMarket Segmentation

Service

Levels

Planning & Design

Deployment & Integration

Monitoring & Management

Maintenance & Refresh

F500

Size

of

Accounts

Business Applications

Security

Functional

Layer

F2000

Mobility

Desktop Computing

SMBs

Data Centers

Network Infrastructure

Vertical

Markets

building the right operational mix
Building the Right Operational Mix

People

People

Processes

Processes

Technology

Value

Proposition

Services

the circles of success
The Circles of Success

Community

Ecosystem

Specialized Skills

Platform

Core Functionality

Platform

Specialized Skills

Ecosystem

Community

opportunity changing the vendor customer relationship
Opportunity: Changing the Vendor/Customer Relationship
  • Direct vendor/user connection
  • Greater customer insight
  • Ongoing feedback
  • Real-time analytics
  • Aggregated user data
  • Operational benchmarks
  • Continuous enhancements
  • Higher satisfaction/retention/referrals
the key to success
The Key to Success

Winning & Retaining Trust Is Your Strongest Competitive Advantage!