Post on 13-Oct-2020
Winning the Cloud Race in Asia Pacific
Chris Morris
IDC Asia Pacific
Interest Security Reliability Location Ecosystem Experience
Cloud in 2012
IT will be fully embedded into business operations
by 2020.
Different buyers are emerging.
n = 225
IDC 2011 Cloud Forum - Delegate Pre-Poll, May 2011 (N=300)
Interest
Internal, on-premises private
cloud managed by our own resources
22%
Internal, on-premises private
cloud managed by external resources
22%Outsourced
(hosted) virtual private cloud managed by
vendor15%
Outsourced (hosted) virtual private cloud
manged by your organisation
12%
Varies depending on application type
and business requirement
25%
We have not decided yet
4%
N=138
Deployment Preferences Evolve
Initial public cloud enthusiasm
replaced by the reality of the scale of
on-premises private cloud projects.
Virtual private clouds seen as a safer
and more achievable way to gain
cloud benefits
While still strong intentions for on-
premises private cloud solutions,
currently a stronger tendency to use
external resources to manage and/or
host it
Mature organisations understand
that matching the deployment model
to the workload is a case by case
exercise
Source: IDC 2011 APeJ Cloud End-User Survey, N = 718
Interest Security Reliability Location Ecosystem Experience
Cloud 2011
By 2013, there will have been numerous major public
cloud failures and/or security breaches.
No surprise, right?
n = 225
IDC 2011 Cloud Forum - Delegate Pre-Poll, May 2011 (N=300)
Security
Security will change from the cloud's chief
impediment to a major accelerator by 2015.
What!?
n = 225
IDC 2011 Cloud Forum - Delegate Pre-Poll, May 2011 (N=300)
Security
Interest Security Reliability Location Ecosystem Experience
Cloud 2011
Stuff Happens: Always has, always will
IT 101: The Cloud is NOT
Foolproof
SLAs Matter – so read
them!
Service selection processes
must account for service
availability, RTOs and RPOs
Increasing number of public
cloud business continuity
solutions facilitate high
availability without massive
cost
Some applications just won’t
suit some cloud deployment
models
“Frankly, we screwed up.
AWS explicitly advises
that developers should
design a site’s
architecture so that it is
resilient to occasional
failures and outages
such as what occurred
yesterday, and we did
not follow that advice”
By 2014, major public cloud providers will have
addressed uptime concerns so effectively that
reliability will be a non-issue in moving to the cloud.
Technology AND process make the difference.
n = 225
IDC 2011 Cloud Forum - Delegate Pre-Poll, May 2011 (N=300)
Reliability
Interest Security Reliability Location Ecosystem Experience
Cloud 2011
Location Matters Invest or Partner
With increasing cloud adoption and
mission-critical use of cloud
applications emerging, the location
of assets and data now matters
Cloud sourced infrastructure and
applications is a commonly
evaluated alternative to on-
premises delivery
Regional hubs in Asia Pacific not
always good enough
Massive investments in new data
centers across APeJ - $3.7B+ at 30
June
New entrants such as property
developers and telcos expanding
the ecosystem
Cost of market entry means that
partnerships the preferred route to
market in lower value countries.
Aging
facilities
Economics of
refurb or
replace vs.
economy of
scale
Shift to OpEx
as IT
investment
direction
Compliance
extends beyond
the applications
to infrastructure
Interest Security Reliability Location Ecosystem Experience
Cloud 2011
By 2014, several of the leading IT vendors will have
stumbled badly in the transition to cloud, putting
them at risk of acquisition or vanishing.
n = 225
IDC 2011 Cloud Forum - Delegate Pre-Poll, May 2011 (N=300)
Ecosystem
Beware The Power Shift
Traditional ICT
Supplier Model
Hardware Software
Services
Enterprise Customer
Current Locus of
Power
Market
Shift
Cloud Computing
Hardware & Software
OEM
Services Provider
Future Locus of
Power
‘Consumer’ of
Services
Future Cloud Business
Business
Process
Provider
Services
Provider
Further Expansion
of Power
Market
Shift
‘Consumer’ of
Business Services
Interest Security Reliability Location Ecosystem Experience
Cloud 2011
Private Cloud is Difficult … unless you get help
Cloud Stage 2009 2010 2011 2012 2013 2014Virtualization 26% 34% 40% 50% 62% 72%
Standardization 16% 25% 37% 42% 48% 55%
Automation 16% 32% 40% 45% 53% 63%
Service level management 18% 24% 35% 40% 46% 54%
Self service 5% 14% 23% 25% 33% 41%
2009 2010 2011 2012 2013 2014
Server devices Server devices Server devices Server devices Server devices Server devices
Storage devices Storage devices Storage devices Storage devices Storage devices Storage devices
C&SI Network devices Network devices Network devices Network devices Network devicesHardware,
software deploy &
support
Sys infrastructure
management tools
Sys infrastructure
management tools
Sys infrastructure
management tools
Sys infrastructure
management tools
Sys infrastructure
management tools
Training C&SI C&SI C&SI C&SI C&SIHardware,
software deploy &
support
Hardware,
software deploy &
support
Hardware,
software deploy &
support
Hardware,
software deploy &
support
Hardware,
software deploy &
support
Training Training Training Training Training
Investment focus
areas
Within the APeJ Private Cloud implementations, IDC surveys of end-users show that
by 2014, less than half expect to complete their private cloud projects
Source: IDC 2011 APeJ Cloud End-User Survey, N = 718
2011 Cloud Pin-up: vPC
0% 5% 10% 15% 20% 25% 30% 35% 40%
Evaluating options
Developing implementation plans
Selecting cloud technology vendors
Implementing plan
Testing solution/proof-of-concept (PoC)
Currently in use
Emerging end-user preference for locally hosted virtual
private cloud as an interim step in the cloud journey
The public cloud model is not yet mature enough to provide the
level of SLA around availability
The services currently offered by pure-play cloud providers are
not always backed up by robust IT processes
Source: IDC 2011 APeJ Cloud End-User Survey, N = 718
Cloud 2015 Report Card
Interest Security Reliability Location Ecosystem Experience
Subject Score Performance
Interest 90%
Now understands the need to differentiate submissions dependent on
workload.
Has overcome the early need to over-achieve.
Security 85% Has improved performance to level where cloud is above average and
compares favourably with other participants.
Reliability 80%
Certain elements of performance are above average, but group
assignments with other participants sometimes omit key
requirements.
Location 95% Delivery of services from appropriate locations is now excellent,
providing the alternatives needed for different business requirements.
Ecosystem 80%
Significantly expanded from initial attempts, with services available for
all size use cases and industries. Partnering and revenue models still
need improvement.
Experience 80%
Lack of experience has hampered performance, but ongoing group
assignments and practical knowledge are being transformed into best
practice processes.
Overall
Assessment A
Cloud has made significant progress over the last three years and
integrated well with the rest of the class. Cloud can now be
considered a fully-fledged member of the IT class.
IT Service Delivery 2015
Outsourcing
3.0 arrives
Hybrid
environments
the reality
IT team skills
inventories
revamped
Supplier
portfolio
transformed
IT Service Delivery 2015: Another Tool in the Bag
Public cloud is Outsourcing 3.0
Delivers a full portfolio of services from mission-critical to commodity
Part of an extended sourcing model available to all organizations
Service sourcing and management is a key element of the CIO capability
The IT team has acquired new and different skills and IT management team is now skewed to service management rather than technology
The due diligence step in service selection is as crucial as in outsourcing
Source: IDC 2011
IT Service Delivery 2015: What Will the Impact Be?
Outsourcing
3.0 arrives
Hybrid
environments
the reality
IT team skills
inventories
revamped
Supplier
portfolio
transformed
Industries are “digitizing”, with
new services based on cloud
platforms
As IaaS commoditises, CSPs
will form higher value
community clouds
01100011 01101100 01101111 01110101 01100100
01101101 01101111 01110010 01100101 00100000
01100011 01101100 01101111 01110101 01100100
01100011 01101100 01101111 01110101 01100100
01101101 01101111 01110010 01100101 00100000
01100011 01101100 01101111 01110101 01100100
01100011 01101100 01101111 01110101 01100100
01101101 01101111 01110010 01100101 00100000
01100011 01101100 01101111 01110101 01100100
01100011 01101100 01101111 01110101 01100100
01101101 01101111 01110010 01100101 00100000
01100011 01101100 01101111 01110101 01100100
01100011 01101100 01101111 01110101 01100100
01101101 01101111 01110010 01100101 00100000
01100010 01101100 01101111 01101111 01100100
01111001 00100000 01100011 01101100 01101111
01110101 01100100
IT Service Delivery 2015: IaaS Will Go Vertical
CSP have multiple roles in today‟s
Big Data ecosystem
“Big Data” services must be part of
your cloud service portfolio
Disk capacity purchased
directly by cloud service
providers in 2010
IT Service Delivery 2015: Big Data
IT Service Delivery 2015: What Will the Impact Be?
Outsourcing
3.0 arrives
Hybrid
environments
the reality
IT team skills
inventories
revamped
Supplier
portfolio
transformed
IT Service Delivery 2015: Mass-market Services Still Important
Follow the money…. Application Developers are
voting with their feet for the Public Cloud
Your enterprise’s ability to exploit this avalanche of new services in the cloud depends on you getting good at using/managing public clouds
80% of new enterprise apps
will be developed for cloud in
2011
20% of 2015 spending on
enterprise applications will
be via the cloud model
Cloud service brokers that provide integration,
management, security and other services across
public cloud offerings will emerge as powerful
industry players by 2015.
n = 225
IDC 2011 Cloud Forum - Delegate Pre-Poll, May 2011 (N=300)
IT Service Delivery 2015: New Ecosystem Roles
By 2013, the percentage of customer systems
managed by third-party providers (including cloud
services, hosters, outsourcers) will double from its
current levels.
n = 225
IDC 2011 Cloud Forum - Delegate Pre-Poll, May 2011 (N=300)
IT Service Delivery 2015: Relationships Expand
IT Service Delivery 2015: Many Vendors Will Vanish
25 years ago, vendors faced a similar transition, to the “Second Platform”…
Those without viable cloud strategies will falter, then be acquired or vanish
Definition of a new enterprise architecture based on services rather than technology an essential first step
Supplier selection and management will impact service delivery processes
35% of Your key vendors will
be „WikiTrivia‟
IT Service Delivery 2015: What Will the Impact Be?
Outsourcing
3.0 arrives
Hybrid
environments
the reality
IT team skills
inventories
revamped
Supplier
portfolio
transformed
IT Service Delivery 2015: IT Organizations are Cloud Brokers
IT departments are increasingly multi-source, hybrid organisations,
taking on the role of “services brokers”
IT departments want to manage internal and external services as a
unified portfolio: costing, service quality, utilisation, asset prioritisation
Hybrid asset management, granular service metering, and chargeback,
are critical to this new shape of IT as a service centre
“Extremely/Very Important
for our IT organisation to be
involved in pre-
sale/sale/purchase of our
SaaS Apps” Public Cloud
Services
On-Premises
Traditional &
Private Cloud
Services
The Cloud Threat: Reality or Perception?
Initial channel reaction to cloud
phenomenon…
– Cloud means fewer end customers buying
infrastructure
• Many resellers still highly leveraged in hardware
• Partner margins continue to be under pressure
• Cloud service re-sale not expected to yield margins
much better than hardware re-sale; likely less
– Early cloud providers focused on direct to end
user
– As trust in cloud computing increases, it exerts
pressure on the channel to adapt
IDC opinion is both threat and opportunity for
partners
– IDC predicts slight contraction in channel
Source: IDC, 2010; n= 175
Q. Do you view cloud computing as...
A Match Made in Heaven: Why The Cloud Needs The Channel
Cloud “trust” is still in question Partners have “trusted” relationships with end customers
Cloud providers don’t want to build large field sales and account management organizations
Reach is one of several “raison d’etre” for the channel
Do not have or necessarily want to have the infrastructure to provide 1st call support
The channel is already set up to provide this
Mixed cloud offerings are integrated solutions
Partners are logical sources of integration
Cloud needs more vertical market specialization
Vertical partners know their market’s requirements
End customers need cloud guidance Qualified partners will have the necessary professional services capabilities
Partners need cloud training Enterprise distributors are sources for partner training, etc.
The Cloud The Channel
Dis
trib
uto
rs a
re a
Co
mm
on
Th
rea
d
A Match Made in Heaven: Why The Channel Needs The Cloud
1. Hardware margins continue
to deteriorate for resellers
2. Resellers need to offer high
margin services to offset
declining hardware margins
3. This fundamental shift has
been slow to occur for many
resellers
4. Cloud is a highly consultative
engagement with high
professional services attach
5. Cloud promotes channel
transition to services oriented
business model
N = 175
Source: IDC, 2010
Hardware
40.0%
Software
24.0%
Services
36.0%
Reseller Revenue Mix
Five Years Ago
Hardware
34.0%
Software
24.0%
Services
42.0%
Reseller Revenue Mix
Today
Reseller Revenue Mix
In the Future (est.)
Revenue Mix - In the Cloudy Future
Services
56.0%
Hardware
20.0%
Software
24.0%
15%6%
27%
17%
28%
19%
18%
25%
7%
18%
5%15%
0%
20%
40%
60%
80%
100%
Today Five Years Ago
>25%
21-25%
16-20%
11-15%
6-10%
1-5%
Retained Gross
Margin %
Reseller Retained Gross Margin
Today vs. Five Years Ago
Perc
en
t o
f re
sp
on
den
ts
Where’s the money?
1
10
100
1000
10000
100000
1000000
2010 2011 2012 2013 2014 2015
$ B
illio
n
APeJ Total IT Spend
APeJ Total Public Cloud
APeJ Prof Services for All Cloud
APeJ Private Cloud infrastructure
Note: y-axis is logarithmic
Growth rate is as important as size
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
500000
2010 2011 2012 2013 2014 2015
$ B
illio
n
APeJ Total IT Spend
APeJ Total Public Cloud
APeJ Prof Services for All Cloud
APeJ Private Cloud infrastructure
CAGR Public Cloud 52%
CAGR Total IT Spend 14%CAGR Cloud Prof Svcs 41%CAGR Private Cloud Infra 33%
APeJ market growth is based
on the mature markets as
much as the emerging
markets
Regional growth plans must
address both requirements as
each deliver different types of
growth opportunities
Watching the Markets is Vital
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
2010 2011 2012 2013 2014 2015
$ M
illio
ns Applications
Applications D & D
Public Cloud IaaS
Virtual Private Cloud
vPC
US$516M
(16%) Public IaaS
US$975M
(30%)
Revenue & Margins*
• APeJ Cloud Services TAM and Margins 2011
10%
20%
Gro
ss m
arg
in
20% 40% 60% 80% 100%
Applications
US$1,355M
(42%)
Appl.
Dev &
Deploy
US$386
M
(12%)
Source: IDC APeJ Cloud Services Forecast 2011-2015, Vendor/Provider Executive Interviews (*Gross margins)
12-25%
19-27%
8-18%
15-22%
Cloud category Share of TAM
Five Opportunities in The Cloud How The Cloud is an Opportunity for The Channel
Deploy and manage private clouds
– New MSP offering
Help customers migrate to public clouds
– Professional services and consulting
engagements
Resell public cloud services
Build, then offer internal private cloud to
end customers
– Become a cloud service provider
– Alternative to building out is “white label”
programs
Develop and resell applications in The
Cloud
– ISV & SaaS opportunities
60% of resellers offer or plan to offer in
2010 Cloud professional services
Less than 20% of respondents are
NOT creating Cloud professional
services offerings
Source: IDC, 2010N = 175 Source: IDC, 2010N = 175
Source: IDC, 2010N = 175 Source: IDC, 2010N = 175
Source: IDC 2010; n = 175
Q. Do you plan to offer cloud-based
professional or consulting services?
The Moving Cloud Provider Landscape
Ecosystem Management
Services
Business Process Services
Information Services
Application Services
Application Infrastructure
Services
System Infrastructure Services
Telco,
Web 2.0
ISV, Content
Provider/ Aggregator
BPO Lead
Service Provider,
Solution Partner
IT M
eg
a V
en
do
r, t
he
en
able
r
The Changing Role
Pri
vate
Clo
ud
, Vir
tual
Pri
vate
Clo
ud
, Pu
bli
c C
lou
d
Cloud Opportunities Requiring New Skill Sets
Readiness Assessment
Services
Datacenter Assessments
Security Assessments
Application Virtualization Assessments
Cloud Strategy Development
Cloud Roadmap Development
Infrastructure Virtualization Strategy and Architecture
Application Sourcing
Strategies
Implementation &
Transformation Services
Infrastructure Virtualization
Migration Services
Application Virtualization
Services
Automation
Service Integration
Security and BCDR
Change Management
Policy Definition
Governance
Billing
Support
Multi Vendor Support
Recommendations
Large revenue opportunities exist in both the public and private cloud markets
Adoption profile different for mature vs emerging markets
Different ‘standardized’ offerings needed in different markets – local partners vital
Intentions towards public and private cloud use are evenly distributed Large revenue opportunity in private cloud enablement i.e. hardware, software and
services to build cloud environments
Any cloud service provider (CSP) must deal with a hybrid environment and the management required for multiple suppliers
Cloud marketing programs need to acknowledge: The differences in regional markets
The uneven understanding of the use of cloud services and cloud computing technologies
The importance of channel partners in reaching deeper in to the market
43
Contact Information
Email me at
cmorris@idc.com