Saugatuck Cloud Slam Blue Skies

Blue Skies –

The Air Clears on

Cloud Computing

Westport, CT Phone: 203-454-3900

Mike WestVice PresidentProgram Director Cloud Research Board ™Saugatuck Technology

Entire contents © 2009 Saugatuck Technology Inc.All rights reserved.

Cloudy Language

• WALL STREET JOURNAL BIZTECH BLOG – “Overuse of the Term 'Cloud Computing' Clouds Meaning of the

Tech Buzz Phrase” (September 23, 2008)

– “Microsoft Comes up with Yet Another Meaning for ‘Cloud Computing’ ” (October 2, 2008)

• The “ubiquitous buzzword . . . that everyone seems to interpret as a different animal.” Forbes

• According to Gartner, Cloud Computing is “creating a lot of confusion in the market”

• “There is a clear consensus that there is no real consensus on what cloud computing is.” Irving Wladawsky Berger, Chairman Emeritus – IBM Academy of Technology

Page: 2


CIOs on Cloud Computing

Recent Saugatuck interviews with CIOs revealed:• “Cloud computing is anything the user wants it to be. OK, that's probably more facetious

than you wanted to hear. But it really is true – cloud computing means the availability of IT, delivered as a service, from a provider unknown to or unseen by the user. It can be us in house; it can be IBM; it can be SalesForce.com…” Divisional CIO, Top-5 US brokerage / financial services firm

• “Cloud computing is the outsourcing of IT infrastructure. I see the cloud including SaaS and computing, Storage, etc. I don't know that we would outsource IT management to a cloud provider…” CIO, mid-sized US manufacturing firm (with 7 small subsidiaries)

• “When I think of “Cloud Computing, I think of it as the ability to dream software solution dreams. I then think of rendering it in a language of my choice. And finally, being able to somehow magically "push" code into the "Internet Cloud", without fore-knowledge or regard for any of the layers underlying my code (DBMS, OS, connectivity or Computer)… The leading vendors are Google, Facebook, Amazon.com, and Salesforce.” CIO, Global Retailer

• “Cloud Computing is about on-demand infrastructure that can be flexibly deployed based on my computing needs. Longer-term, it is all about building and deploying new apps in the cloud – as we shift the way we deploy IT from internally-managed datacenters to centralized utilities... Amazon and Google are the early compute-focused players, but Cloud Computing will cross the entire ecosystem of providers within a short time…” SVP Fin/HR Apps at Top-5 US Bank

Page: 3Source: Saugatuck Technology


What are Cloud Computing and Software as a Service?

Saugatuck Definitions:

• Cloud Computing encompasses on-demand infrastructure (compute, storage, networking), and on-demand software (OSs, apps, middleware, management, dev. tools), customized dynamically to fit current and immediate business process requirements, along with the ability to deliver and manage those business processes.

• Software as a Service (SaaS) refers to software provided and used in a utility computing context, where the services provider delivers the functionality of the application software over the network through a services interface. Typically these services are sold via either a subscription model, or on a utility-style, "pay as you go" (PAYG), or per unit, basis.


Implementation cost

Availability of cost-effective, responsive tiered user support

Implementation timeframeSolution deployment/usage methods (on premise, hosted and/or

on demand)Availability of implementation resources

Relationship with technology vendorPayment methods (license plus maintenance, usage-based

subscription, etc.)No-obligation trial or pilot program

Relationship with implementer (VAR, system integrator, etc)

Services delivered by brand name vendor

Availability of multi-year pricing incentives

Availability of flexible billing terms

% 10% 20% 30% 40% 50%

43%

30%

26%

25%

23%

20%

18%

17%

16%

16%

15%

14%

Business Drivers

Percent

Se

rvic

ePost-Crash Business Drivers for Cloud Buyers

Page 5

Saugatuck Insight: Far and away the most important business driver for Cloud buyers is Implementation Cost. Given this global survey was taken 8-10 weeks after the start of the economic collapse (in mid-September 2008), it is not surprising to see this result. At the same time, it is interesting to note that buyers rank the relationship with existing channel / implementation partners and brand name vendors at the low-end of business drivers, along with multi-year pricing incentives and billing flexibility.

Key Drivers• Cost• Support• Speed

Source: Saugatuck Technology Inc., 2009 SaaS Survey (Dec ‘08), N=1788, TOP THREE so results equal more than 100%

Decreasing Loyaltyto Legacy Brandsand Relationships?


The Evolving Cloud Landscape

Page 6Source: Saugatuck Technology

Beyond Software-as-a-Service: Cloud Computing

Ad

op

tio

n

Low

High

Wave I: 2001-2006 Cost-Effective

Software Delivery

SaaS 1.0

Early SaaS Adoption• Stand-alone Apps• Multi-tenancy• Limited Configurability• Focus on TCO / rapid

deployment

Wave II: 2005-2010Integrated

Business Solutions

Mainstream SaaS Adoption• Integrated w/ Business• SaaS Integration Platforms • Business Marketplaces

and SaaS Ecosystems• Customization Capability• Focus on Integration

SaaS 2.0Wave III: 2008-2013Workflow-Enabled

Business Transformation

Ubiquitous SaaS Adoption• Focus on Business Transformation• ISV to SaaS Enablement • Server and Application Virtualization• SaaS Development Platforms (PaaS)• Public Cloud Infrastructure (IaaS)• Cloud Collaboration Platforms• Customized, Personalized Workflow

2006 2007 2008 2009 2010 2011 2012 20132004 2005 2014 2015 20162003

Cloud Computing

Post-SaaS Adoption• End-to-End Cloud Business

Processes• Intelligent Hubs Linking Platforms• Virtualization on Mobile Devices• Elastic Cloud Infrastructure• Standards for Workload Portability• SLAs for Composite Service

Offerings• Support at Business Process Level

Wave IV: 2011-2016Measured, Monitored, Managed

Business Processes

The focus shifts over time from cost-effective delivery of stand-alone application services (Wave I), to integrated business solutions enabled by web services APIs and ESBs (Wave II), to workflow- and collaboration-enabled business transformation (Wave III), leading to measured, monitored and managed business processes (Wave IV).

By 2012, Cloud Computing will capture at least twenty five percent of IT spending growth.


Cloud Technology Considerations by Geography

Page 7

Technology Considerations United States Europe Asia

Robust backup/recovery capabilities 69.8% 61.0% 73.5%

Robust disaster recovery capabilities 67.8% 57.6% 71.8%

Software development platform & tools 51.4% 49.9% 63.5%

Web Services API 49.0% 46.6% 61.7%

SLA compliance data 45.5% 47.8% 59.1%

SOA architecture 40.6% 42.5% 56.0%

Display data on mobile devices 37.7% 46.7% 53.7%

Multi-tenancy based solution 32.4% 42.1% 55.9%

Support for Web 2.0 mashups 37.2% 41.4% 55.0%Update data via mobile devices 34.3% 45.1% 52.4%Appliance form factor 24.9% 41.9% 53.0%

Saugatuck Insight: Notable differences in the key technology considerations driving demand across geographies, especially among Asian executives. Mobile device support is more important in Europe and much more important in Asia than in the United States. Please note the much wider range of responses in US and higher levels for all responses in Asia

Source: Saugatuck Technology Inc., 2009 SaaS Survey (Dec ‘08), N=1788

wid

e ra

nge

(45

poin

ts)

high

er le

vels

for

all r

espo

nses


Channel Preferences by Region

Page: 8

Source: Saugatuck Technology, Web Survey December 2008, N=1788

Saugatuck Insight: Channel strategy must be tailored to geography. The US ranked “direct from provider” highest; Europe and Asia ranked “IT consultancy” highest. IT consultancy channel is ranked highest overall due to ranking in Europe and Asia. Note also the much higher preference for “Business consultancy” in Europe and Asia. “Local/Regional VAR or system integrator” is most popular in Asia.

United States

Europe

Asia

% 10% 20% 30% 40% 50% 60%

Other (please specify)

Online Business/Services Market-placeBusiness Consultancy (e.g., accounting firm)

Managed/Hosted Services Provider

Local/Regional VAR or System Integrator

Industry-specific VAR or System Integrator

Direct from SaaS Solu-tion Provider

IT Consultancy

Se

rvic

e

Lead

ing

Reg

iona

l Pre

fere

nce

Entire contents © 2009 Saugatuck Technology Inc.All rights reserved. Page: 9

Purchase Plans – Collaboration & Social Computing

Please indicate when your company plans to purchase a SaaS solution in each of the following categories:

Source: Saugatuck Technology, Web Survey December 2008, N=1788

Saugatuck Insight: The sweet spot in collaboration and social networking tools is clearly the small and mid-sized market (100-1000 employees), with the 300-500 employee segment particularly promising. It is worth noting that for all sizes, an upside of nearly 20 percent from 2009 to 2011 pertains to all categories of collaboration and social networking tools. However, large enterprises (2,500 employees and above) do not show the same level of interest in these solutions in comparison to smaller enterprises with the exception of Project Management and Business Collaboration, where there is a nearly 20 percent increase from 2009 to 2011.

2009 2011 2009 2011 2009 2011 2009 2011 2009 2011 2009 2011 2009 2011

Email 48.4% 64.8% 54.5% 71.8% 51.3% 72.8% 52.1% 69.3% 47.0% 62.8% 44.9% 59.9% 42.9% 56.5%Web Conferencing 47.7% 66.7% 44.5% 67.6% 45.5% 69.7% 49.0% 69.5% 45.2% 63.6% 53.6% 69.0% 49.3% 63.9%

Calendaring 41.0% 59.4% 46.1% 64.3% 46.8% 72.5% 40.2% 64.1% 40.7% 58.3% 42.1% 57.3% 35.2% 48.9%“Office” Suite 40.9% 61.2% 46.0% 69.0% 42.2% 67.2% 39.2% 61.2% 36.1% 55.6% 34.7% 51.5% 41.7% 58.8%

Project Management 40.8% 62.4% 44.5% 66.1% 40.3% 68.2% 41.6% 66.8% 40.0% 61.9% 43.3% 59.1% 37.7% 56.3%Business Collaboration 39.6% 61.3% 40.4% 62.0% 39.1% 67.0% 43.0% 64.0% 33.2% 60.4% 41.8% 59.4% 39.5% 57.9%

Forums 34.7% 53.5% 34.0% 56.2% 37.7% 61.9% 34.4% 56.3% 31.5% 50.9% 37.8% 54.9% 34.5% 47.1%“Communities” 34.7% 55.0% 36.0% 57.7% 37.8% 62.2% 36.2% 56.9% 31.2% 53.5% 32.7% 56.4% 33.9% 48.9%

Social Networking 33.9% 51.4% 37.9% 55.9% 34.8% 58.8% 35.5% 54.4% 31.9% 50.9% 33.1% 53.0% 31.0% 43.2%Whiteboards 33.0% 53.3% 34.1% 54.8% 36.7% 62.9% 36.2% 58.5% 28.0% 53.1% 38.4% 55.5% 29.2% 44.8%

Blogs 32.9% 50.9% 34.1% 54.6% 37.1% 60.3% 33.7% 52.3% 30.7% 47.4% 31.3% 52.1% 31.1% 44.5%Content Tagging 32.8% 52.9% 35.3% 54.7% 37.7% 63.2% 33.1% 57.2% 29.2% 52.8% 37.6% 54.5% 28.7% 44.4%

Wikis 32.5% 50.6% 33.7% 51.6% 37.6% 56.8% 30.5% 52.5% 29.0% 47.9% 32.5% 54.2% 31.9% 45.9%

Over 5000All Sizes 100-300 300-500 500 to 1000 1000 to 2500 2500 to 5000> 60 %52 - 60 %44 - 52 %36 - 44 %< 36 %

Entire contents © 2009 Saugatuck Technology Inc.All rights reserved. Page 10

SaaS and Core Business Systems

Between 2009 and 2012, at least 40 percent of upper mid- to large-enterprises will seriously evaluate SaaS-based “core” financial solutions, as well as broader operational systems and requirements (e.g., order management, procurement, ERP, HR).

Source: Saugatuck Technology

Low

Key catalysts that will drive mid-to-largeenterprises to migrate to SaaS-basedfinancial systems (“Core” and “Non-Core”)• Dramatically lower costs• Simplification of the upgrade / release

management process• Powerful integration tools (apps / data)• Advances in SaaS application customization

capabilities to support personalized workflows

• Easier access to next-gen technology and architectural advances

High

2006 2007 2008 2009 2010 2011 2012 20132003 2004 2005 2014

Broad SaaSAdoption

Curve

“Upper-Mid” to“Large” Enterprise

EarlyAdoption

Early Mainstream Adoption

Mainstream Adoption

SaaS “Tipping-Point”(General Market)

Adoption of SaaSfor “Core” and “Non-

Core” Financial Systems /Operational Processes

“Small” to “Mid” Enterprise

Adoption of SaaSfor Collaboration,Self-Service, CRM

and SFA


Saugatuck Cloud Ecosystem Model

Level 4; BPO / Managed Services. Specialized expertise often delivered in conjunction with a Cloud-based solution, e.g., Mobility as a Service, Cloud-based security.

Level 3: SaaS (Waves I-III) and related services. Business solutions delivered from the Cloud, typically in a multi-tenant architecture, and billed under subscription model.

Level 2: Cloud development, PaaS, SaaS integration, Service Hubs, including billing, administration, aggregation, security and mobility solutions, systems and infrastructure management, data warehousing, data access and analysis, and related professional services.

Level 1: Cloud-based On-Demand infrastructure providers and platforms that host SaaS and other on-demand solutions and provide service offerings to manage infrastructure platforms (collocation);

Level 0: Suppliers of hardware, system software and utilities, data center management software, networking equipment, hardware and software, and associated services

Page 11



“. . . –as-a-Service” Taxonomy

Page 12

Saugatuck Insight: IaaS providers (Level 1) serve as channels for integration, security, mobility, billing & payments, and other Level 2 providers. PaaS providers (Level 2) may also refer or offer Level 1 hosting services, either through partnership, portability or platform capabilities of their own. SaaS providers (Level 3) may partner with Level 2 billing and payments or security providers or with Level 4 BPO / MSP providers. ITaaS providers may offer the full range of ecosystem services.

Hardware, Software, Networking and Services

Software as a Service, and Related Services

Cloud Development, SaaS Integration, Services Hubs, e.g.,

Billing, Security, Mobility, and Related Services

Cloud Infrastructure, e.g., Hosting, Execution and

Storage, And Related Services

Business Process Outsourcing,Managed Services,

Business & Information Services

Level 4

Level 3

Level 2

Level 1

Level 0

ITaaSIT-as-a-Service









Level 4

Level 3

Level 2

Level 1

Level 0

IaaSInfrastructure-as-a-Service









Level 4

Level 3

Level 2

Level 1

Level 0

PaaSPlatform-as-a-Service









Level 4

Level 3

Level 2

Level 1

Level 0

SaaSSoftware-as-a-Service



Key Findings – Recent Saugatuck Cloud Research

Saugatuck Insights:• Despite the economic meltdown, purchase plans for Cloud Computing solutions,

including SaaS and Cloud Infrastructure, remain strong in 2009 and for 2010 – across all geographic and customer segments.

• A new ecosystem is forming around Cloud Computing that will transform the IT sector. This inevitable transformation will result in a multi-level ecosystem, ranging from technology suppliers through Cloud Computing providers to business services providers.

• While Cloud Computing is emerging (Wave IV), SaaS adoption has clearly moved “beyond the tipping-point” (Waves I-III) – Accelerating “mainstream” adoption of SaaS shifts demand to core business systems, not only among SMBs but also Large Enterprises.

• Hybrid application architectures emerge – SaaS increasingly linked with on-premise data, applications and processes through Web Services-based Integration APIs.

• SaaS Analytics, dashboards and BI/performance management tools driving a metrics-based approach to business services.

• A new SaaS-based business services delivery model is emerging – as onshore and offshore BPO providers are forced to rationalize their one-to-one outsourcing models, reduce costs and bring greater process efficiency to their clients. Offshore providers begin to embrace SaaS / Cloud across multiple dimensions of their businesses.

• The most aggressive adopters of SaaS are low-to-midsized SMBs with 100-499 employees. A small, emerging group of SMBs, labeled by Saugatuck as “The New SMB,” forego traditional IT and immediately establish themselves with SaaS- and cloud-based IT.

• Cloud, SaaS and Mobility are helping to make the “boundary-free enterprise” a reality. Cloud Computing has emerged -- and will continue to evolve – to enable increasingly networked, mobile businesses, staffed by knowledge workers that are exchanging information and doing business with organizations across the globe in an economic environment favoring agility and speed of response.

Page 13 Source: Saugatuck Technology


The Boundary Free Enterprise

Chart: 14

20th Century Enterprise –

“Within Bounds and Borders”

21st Century Enterprise -

“Boundary-Free and Global”

Economies of Scale Agile Economies

Volume Production Speed of Response

Industrial Plant Workers Mobile Knowledge Workers

Local, Regional, National Global Organizations

Vertical Integration Virtual Integration

Hierarchical Structures Distributed Networks

Planes, Trains and Automobiles Mobile Devices, Browsers and the Cloud



• • •

How to Contact: Regional Sales Offices

US OFFICES

HeadquartersSaugatuck Technology Inc.49 Riverside Ave.Westport, CT 06880 USA (P) +1.203.454.3900Regional Sales: [email protected]

Silicon ValleySaugatuck Technology Inc.5201 Great America Parkway, Suite 320Santa Clara, CA 95054 USA (P) +1.408.727.9700 Regional Sales: [email protected]

INTERNATIONAL

GermanySaugatuck Technology Inc.Bluecherstr. 4D 65343 Eltville am RheinGermany(P) +49.6123.630285Regional Sales: [email protected]

Are you getting the best research, insight, and advice on disruptive IT?

Register to receive Saugatuck’s complimentary Research Alerts, and browse our comprehensive Research Library on topics such as SaaS, Open Source, Web 2.0, SOA and

Utility Computing (among other).

• To Register: http://research.saugatech.com/cgi-bin/order/signup3.pl• To Browse the Library: http://www.saugatech.com/researchbytopic.htm• To Learn About Saugatuck’s CRS Subscription Research Service:

http://www.saugatech.com/crs.htm

mailto:[email protected]



http://research.saugatech.com/cgi-bin/order/signup3.pl

http://www.saugatech.com/researchbytopic.htm

http://www.saugatech.com/crs.htm

Date post:	17-Oct-2014
Category:	Technology
View:	7,781 times
Download:	1 times