Mid Atlantic Cio Forum Kaplan Presentation V03 12 10

Mid-Atlantic CIO Forum: The Cloud Revisited Presented by, Jeffrey M. Kaplan Managing Director THINKstrategies [email_address] 781-431-2690

Why We Are Here… Is Technology an Enabler or Inhibitor?

Primary Market Drivers Changing economic conditions Changing competitive forces Changing ecological concerns Changing workplace requirements Changing technologies Changing priorities & sourcing policies

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/Organizational Pressures Need to reduce IT costs and increase business benefits. Need to increase utilization to gain greater ROI. Need to be responsive to a more dispersed workforce. The Shortcomings of Legacy, On-Premise Apps

On-Demand Has Become Mainstream

Enabling Technologies Broadband networks Grid computing Blade technology Virtualization Security Web services & APIs Service management

The New Generation Thinks & Communicates Differently

The Consumerization & Democratization of IT

The Virtual Corporation Becomes Reality Freelance nation Mobile/remote workers Decentralized operations Limited hierarchies Web-oriented Self-reliant Copyright, 1992

Changing Customer Expectations Old, Fixed, Capital Investment Complexity, Customization High TCO, Uncertain ROI Internal Support Limited Visibility Outsourcing Alternatives New, Flexible, Operating Expense Simplicity, Utilization Rapid Time-to-Value Vendor Management More Analytics Out-Tasking Options

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 Cloud Computing Managed Services Out-Tasking Alternatives

An Historical Perspective Facilities Mgmt Outsourcing ASPs/MSPs Cloud-Based Services Market Penetration Year 1970 1980 1990 2000 2010

Today’s Perfect Storm The Economy Enabling Technologies Shifting Customer Attitudes

Defining SaaS Services-Oriented Applications One-to-Many Software Design Network-Based Delivery User-Centric Process Orientation Rapid Deployment/Self-Provisioning Built-In, Real-Time Analytics Continuous Enhancements Subscription-Pricing Multi-Tenancy

Why ASPs Failed Customer Application ASP/Hosting Company Just another outsourcing deal.

Why Simple Hosting Fails Multiple Customers ASP/Hosting Company Updates/Upgrades Too Complex Not Scalable Limited Value-Add

The Advantage of Multi-Tenancy SaaS Vendor

Added Dimension of SaaS & the Cloud Customer Experience Communications Collaboration Community

A New Level of Value Dynamic clearinghouse of solutions Continuous updates, new ideas Real-time, aggregated data Meaningful benchmark studies Practical best practices forums

SaaS Adoption Beyond a Tipping Point Source: THINKstrategies/Cutter Consortium % of Respondents Using SaaS 2007 32% 2008 62%

Customer Satisfaction, Renewal & Referral Rates >90%

Shifting Adoption Patterns Unilateral End-User, SBU Adoption of SaaS Solutions Enterprise-Wide Acceptance and Adoption of SaaS

Recent Mega-Deals = 500,000 suppliers = 420,000 end-users “ 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 "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 “ 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

Market Adoption Forecast Market Penetration 2012 2010 2008 2006 Innovators Early Adopters Mainstream Buyers Laggards

SaaS Expands from Business Apps to Industry Solutions BUSINESS APPLICATIONS Collaboration CRM/SFA … Procurement Supply-Chain … ERP Finance … Front Office Inter-Enterprise Back Office Financial Services … Retail … Manufacturing … Vertical Market/Industry-Specific Solutions

Platforms-as-a-Service: One-Stop Shops Social Applications Enterprise Applications Web Applications App Engine S3 & EC2 CPU and Storage

SaaS Expands from Business Apps to IT Management BUSINESS APPLICATIONS Collaboration CRM/SFA … Procurement Supply-Chain … ERP Finance … Front Office Inter-Enterprise Back Office Security Systems Mgmt … Network Mgmt Remote Access … Data Protection Storage … IT Management

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.

Traditional NSM = ERP of the IT World Too complicated Too expensive Too time-consuming Too ineffective >50 IT/Application Mgmt solutions on the SaaS Showplace. SaaS Penetrating IT Management Market

Managed Services/SaaS Convergence Managed Services SaaS

Managed Services vs. SaaS Managed Services Provider assumes management responsibility Sold on an per device basis Focus on network/system availability & performance 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

Moving from SaaS Apps to Cloud Computing Cloud Computing Services SaaS Apps “ Top Strategic Technology for 2010” But what does “cloud computing” mean?

Storm Clouds & Changing Weather Patterns

Cloud Taxonomy = Complexity & Confusion

The Cloud-Rush Affect: Proliferation of Players Source: SaaS Showplace 44 Messaging 46 eCommerce 47 Human Resource Management (HRM) 49 Marketing 55 Enterprise Resource Planning (ERP) 62 Project Management 67 Document Management 78 Accounting/Financial 80 Collaboration 103 Customer Relationship Management

Key Customer Concerns & Industry Responses Concerns , Reliability Security/Privacy Customization Compliance Integration Lock-In Customer Support Responses , SLAs Certifications/Access Controls User Configurations/PaaS DR/BC, Archival, Traceability APIs/Connectors Portability Online/Pro Services

Clouds Come In Many Forms Public Clouds Private Clouds Hybrid Clouds Internal Clouds

Living in a Hybrid World Companies prefer choice. Businesses seeking combination of on-demand/on-premise solutions. Cross-platform integration essential. Making SaaS/cloud computing location-independent now possible. Variety of appliances and applets becoming available to work offline or behind firewall.

Private Clouds Benchmarking Market Leaders Amazon Facebook Google Salesforce.com Adopting Best Practices Standardization Simplification Automation Agility

On-Demand Services & The IT Industry Inversion Services Technologies Past Now The IT Industry Inversion

Key Challenges Facing Established Vendors Re-architecting applications Re-structuring revenue models Repositioning marketing Re-orienting sales/support staff Surviving market shakeout

The Web’s Reverse Alchemy Affect “ The Internet devalues everything it touches . . .” Tom Foremski, ZDnet, 6/20/09. Industries Disrupted by the Web: Advertising Entertainment Media Computing!

Hybrid Model Pitfalls Balancing, Multiple Offerings Multiple Development/ Delivery Architectures Differing Buyers Multiple Sales Channels/ Compensation Plans Differing Revenue Recognition

Changing Channel/Supply Chain Opportunities Legacy Vendors New Cloud Providers Enabling Technology Vendors Offshore SW Developers 3 rd party SW platforms 3 rd party HW systems xSPs Hosting companies Carriers Channel Partners Distributors VARs/Integrators eCommerce Sites Corporate Customers Consumers

New Breed of VARs and Consultants

New Cloud Channels to Market? Banks Insurance Companies Retailers Web companies PS Firms BPOs Hosting Companies Telcos

Service Evolution IT Services Business Services Information Services

Cloud Computing Market Evolution v1.0 v2.0 Focus on individual user Standalone point apps Horizontal applications Emphasis on ease of use/price One size fits all, minimal customization Limited interoperability Cloud only 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 Multiple configurations, greater flexibility/versatility Greater integration capabilities Bi-direction location independence Emphasis on higher ROI Industry shake-out & consolidation Strategic Sources Win

Summary & Recommendations The cloud is for real. Investigate expanding deployment options. Not too early to experiment. Initiate trials, measure success. Make strategic sourcing decisions. Migrate incrementally, monitor performance. Use classic evaluation criteria. Focus on reliability, security, viability, governance. Expect new forms of value Leverage benchmarks, community, visibility.

Mid Atlantic Cio Forum Kaplan Presentation V03 12 10

More Related Content

What's hot

Viewers also liked

Similar to Mid Atlantic Cio Forum Kaplan Presentation V03 12 10

Mid Atlantic Cio Forum Kaplan Presentation V03 12 10