Winn wl cloud_study_webinar

© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 1

Generating Demand: Enterprise IT Buying in the Early Cloud Era March 2011

© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.


Today’s Speakers •  WaveLength Market Analytics: Founded in 2001, has specialized in

combining the knowledge of technology markets, products and services with data management & quantitative analysis resulting in improved strategies for impacting demand generation success.

•  Speaker – Natalie Robb, Principal Analyst with WaveLength Market Analytics has over 20 years of market research and data analytics experience focused in the Information technology and telecommunications industries.

•  Winn Technology Group: Since 1990 has supported over 800 technology firms with thousands of demand generation solutions.

•  Speaker – Geoffrey Swallow, President of Winn Technology Group, has over 32 years experience in technology marketing.

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Demand Center (Generation) Strategies

•  Part 3 of 8 part Webinar Light series

•  Practicing what we preach •  Thought leadership content •  Focused content and messaging •  Market drivers •  Leveraging the demand center

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Agenda •  Study Background and Goals •  Intro: Many Technology Segments Competing for the Customer •  Baseline on the Cloud Market: Adoption & Penetration •  Moving the Market: Motivators & Barriers Useful to Messaging •  Reaching the Customer: Role of Partners •  Summing Up: Enter the Early Cloud Era

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Background on the Research •  Primary research conducted by Winn Q3/Q4 2010.

•  Random sample drawn from Winn Enterprise/ Mid Market DB that included high-level IT decision-makers (senior managers, directors, and VPs)

•  Primary research data collection methodology:

•  Telephone survey

•  Supplemented by e-survey

•  Landing page developed to provide respondents the ability to answer via web

•  Provided incentive to increase response rates •  Sample size = 126

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Goals •  To inform demand generation programs by

understanding penetration, concerns and motivators, apps and IT strategies, buying habits and partner involvement, & future plans •  Large and medium-sized enterprises to

understand key differences among 3 segments: ▫  Pioneers: Using or testing a cloud

solution ▫  Planners: Planning for a cloud solution ▫  Stragglers: Not planning a cloud

solution at this time

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Many Technology Segments Competing for the Customer

Software Vendors

Hardware Vendors

Telecom Service

Providers

Managed Services/IT Outsourcing

Providers

Systems Integrators

Infrastructure as a Service

Cloud Services-enabling Products & Services Consulting & Professional Services for Cloud

Communications as a Service

= Business model re-alignment and sales channel challenges for entire industry

Software as a Service Platform as a Service

Cloud Vendors

© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 8 Cloud Market Adoption and Penetration


58% are Doing “Something” in the Cloud

Cloud Stragglers

42%

Cloud Planners

17%

Cloud Pioneers

41%

•  More enterprises doing or thinking about the cloud than those that aren’t •  Those actively using or trialing a

cloud solution, Cloud Pioneers, more likely to be: ▫  Larger with global networks ▫  Commercial enterprise ▫  Have more remote and more mobile

workers ▫  Actually already using a cloud

solution, as opposed to just testing

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Takeaways: 1) Limit demand generation for cloud solutions to organizations with 1000 employees or more at this point in market development; 2) Message on how your solution addresses and helps remote and mobile workers.


Besides SaaS: Private Clouds and PaaS Most Common

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Q: For each of the following types of cloud deployment, we’d like to know if it’s currently in production, in trial, is planned in 24 months? N=126

•  Pioneers mostly use Platform-as-a-Service & hosted private clouds •  In the next 24 months, Pioneers and Planners aim for internal private

clouds, public clouds, and take note HYBRID clouds •  NOTE: Since hybrid clouds are more challenging, therefore more

medium-term…it suggests very quick market development reminiscent of the VOIP market rise.


Cloud Apps Not Yet Mission Critical

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Q. Again for apps, is a cloud computing architecture in production, in trial, planned, or not planned? N=78

•  Email, collaboration, CRM, and HR will dominate the next 2 years •  Enterprise mission-critical apps on a more distant cloud


Pioneers Mostly Migrate Legacy Apps

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Q: Does, or will your organization in the next 24 months, use cloud architecture to.. ? (n=78)

•  … of which email is obviously a legacy app •  Planners are more ambitious; not only do they plan on using public and

hybrid clouds in greater numbers, they also intend on migrating legacy apps, as well as implementing new ones


Pioneers & Planners More Likely to Use SAN, NAS, & Virtualized Storage

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•  Pioneers and Planners both have a higher percentage of virtualized servers and higher virtualization densities than Stragglers •  Virtualization is not a requirement for cloud, but both improve

resource utilization

0%

20%

40%

60%

80%

VirtualizedServers VirtualizedStorage SANs NAS

72.7%62.3%

87%

71.2%

52.6%

68.4%

89.5%

52.9%58.1%46.3%

70.3%

41.7%

PercentageofEachSegmentUsingKeyTechnologies

CloudPioneers CloudPlanners CloudStragglers


Pioneers Already Outsource More Than Planners and Far More than Stragglers

14 Q1. Yes or no, do you outsource any of the following functions? N=126

•  Nearly 60% of Pioneers outsource at least one function, compared to 14% of Stragglers

•  Targeting organizations that already outsource would be effective way to penetrate enterprise market


Shift to Cloud Architectures Well-Underway En

terp

rise

Clo

ud

Pene

trat

ion

• Although degree of penetration into IT is unknown, more enterprises implementing or planning “something” in the cloud than those that are not

•  Enterprises don’t want to be left behind

• Cloud Pioneers profile: • Large, publicly traded or private

company • Higher than average number of

remote workers or many smaller branch offices

• Higher than average number of mobile workers

• Outsource more, higher usage of SANs, virtualized storage and servers

Adop

tion

& P

lann

ing • Cloud apps are those that were “born”

of the Internet, such as email, collaboration, and customer relationship management

• Mission-critical enterprise cloud apps nowhere on the horizon

• Continuum of clouds will exist, as some clouds more suited to certain apps than others

• Public clouds & hybrids models are closer than they appear

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© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 16 Moving the Market: Motivators & Barriers


Top Motivators: Cost Cutting & Speedy Application Deployment

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Q: Using a scale from 1 to 6where 1 is not at all important and 6 is extremely important, please rate the following as motivators in your transition to cloud computing? N=126 % who say motivator is 5 or 6.

Takeaway: 1) Include cost reduction and app rapid deployment in solution messaging; 2) Appeal to competitiveness that they risk being left behind

71% 63%

52% 52% 47% 42% 35% 32% 31% 30%

19% 17% 17.1%

38.7%

9.1% 18.8% 15.2% 8.6% 6.7% 9.4% 6.3% 6.5% 6.5% 3%

Cloud Pioneers & Planners Stragglers


Reduced Control is Top Security Concern for Pioneers

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Q: Using a scale from 1 to 6 where 1 is not at all important and 6 is extremely important, please rate the following as security concerns that limit adoption to cloud computing? N=126

•  Pioneers, those with cloud experience, worry less about all concerns •  Planners worry most about data breaches, and Stragglers are

concerned with all security issues


Pioneers Find Network Delays the Top Concern, Even Over Security Pioneers find start-up costs too high and a void of trusted 3rd party relationships Planners find lack of remediation (not truly usage-based yet) and poor interoperability their top concerns Stragglers will need those trusted 3rd party relationships to contemplate cloud

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Extent following concerns limit cloud adoption?

Cloud Stragglers Cloud Planners Cloud Pioneers

Average Rank Average Rank Average Rank Network delays 4.13 6 4.14 8 5.75 1

Initial start-up costs too high 5.16 2 3.98 10 5.27 2 Lack of trusted 3rd party relationships 5.64 1 4.09 9 5.14 3

Lack of reporting/management tools 4.11 7 4.63 5 5.02 4 Reduced control/visibility 4.80 4 4.26 7 4.58 5

Network downtime 3.95 9 5.16 3 4.23 6 No vendor neutral APIs 4.40 5 5.05 4 4.23 7

Technology not yet proven 4.98 3 4.26 6 4.10 8 Lack of audit/remediation/reporting 4.11 8 5.77 1 4.08 9

Poor interoperability b/t cloud venders & internal IT

3.93 10 5.28 2 3.96 10

Q: Using a scale from 1 to 6where 1 is not at all important and 6 is extremely important, please rate the following as concerns that limit adoption to cloud computing? N=126


The Network is Underlying Infrastructure Getting Most Evaluation… from all Market Segments

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Q. Starting with a 1, please ran the following according to how much evaluate a cloud provider’s underlying infrastructure? (N=78)

•  Storage and virtualization software are 2nd and 3rd •  Vendors should not ignore management tools; while they are less

important now, they’ll be increasingly important as performance improves and approaches commoditization


Generate Demand by Appealing to Motivators & Mitigating Risks

Mes

sage

to

Mot

ivat

ors •  Reduce costs, do more with less,

lower fixed costs, improve value, etc. •  Become more nimble in IT and

develop and roll out new apps more quickly

• .. Making business leaner, more agile and more competitive to increase industry leadership

•  All without losing control…

• Vendors should educate on the importance of their management tools; be increasingly important as performance improves and approaches commoditization

Mes

sage

to

Mit

igat

e Ri

sks • It might be more expensive than you

think to start up, but there is a learning curve and the following apps will likely be less expensive

• Beware the network delay, so prepare your network to yield higher performance

• If reduced control is a real concern, start with an application that can tolerate a lower level of performance

• Security is about preparation; don’t do cloud until the network and apps are secure

• We are the most qualified to help you get to the cloud

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© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 22 Reaching the Customer: Role of Partners


In Selecting Partner for Cloud Services, Professional Services is Most Critical for Both Pioneers and Planners

Professional services

Business process re-engineering

Performance management & monitoring

SLAs Creation of vertical

applications

Training

41.5%

18.9% 13.2% 11.3% 9.4% 5.7%

59.9%

38.6% 36% 30.5%

19.5% 13.6%

47.6%

9.5% 19%

14.3% 9.5%

%

44.9%

59.8%

10.3%

55.1%

%

29.9%

Cloud Pioneers- First Mention Cloud Pioneers- Overall

Cloud Planners- First Mention Cloud Planners-Overall

23 Q: In selecting your most important partner, which 2 capabilities were most critical… ? (n=78)

•  The market most demands qualified professional services •  SLAs and business process re-engineering also needed •  Performance management & monitoring lags… but probably won’t for long, as

management offers genuine differentiation


Planners Involve More Tech Segments than Pioneers in Cloud Implementation

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Q: For each of the following types of participants in cloud implementation, on a scale of 1 to 6 where 1 means “not at all involved” and 6 is very Involved,” what’s the involvement level of… ? (n=78)

•  More Pioneers involve software vendors and fewer involve Telco service providers •  More Planners involve consultants and fewer engage service

providers


… But, Overwhelmingly Systems Integrators Most Important Partner for Pioneers while its Software for Planners

25 Q: Your internal IT staff aside, which single partner was most important for your deployment… ? (n=78)

•  Hardware vendors also important to Pioneers •  Telcos least important to both Pioneers and Planners


Buying Behaviors Typical of Shifting Market: Top Management & Trusted 3rd Parties Very Important •  Nearly half of Pioneers say top

business management is very involved

•  Pioneers and Stragglers both plan on leaning on trusted 3rd party more than a cloud provider

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Cloud Pioneers

Cloud Planners

Cloud Stragglers

47.2%

35.7% 30.4%

Those Who Strongly Agree or Agree: Top Business Management is Very

Involved with Purchasing Decisions Regarding Cloud Computing

Cloud Pioneers

Cloud Planners

Cloud Stragglers

35.1%

14.3%

48.1%

Those Who Strongly Agree or Agree: We are more likely to use a

consultant to help create our cloud strategy than work with cloud

service provider partners


Brand, Ability to Manage, Application Features & Functions, Monitored Service Levels Will Become Key Service Differentiators Ch

anne

ls

•  Imperative to own the customer had never been stronger • Hardware & network companies will be increasingly under pressure as the

primary decision-maker changes from the enterprise to the enterprise’s data center partner, but brand can become an important component of the apps or data center’s service sale

•  Telcos need to avoid the temptation of rapidly entering the market with large IT outsourcing partners that will ultimately compete with them

•  All vendors interests would be well-served by educating their best channel sales partners

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Generating Demand Will Require Fewer, but More Substantive Partners

Tech

nolo

gy

Part

ners

hips

• Cloud is mostly about application delivery, so the strong role of software vendors is not surprising

• Storage and app vendor partnerships will be increasingly important • Server and network vendors would be well-served by developing closer relationships with application vendors

• Network hardware vendors can best support their telco customers in service delivery by avoiding direct competition with them

• Integrators, consultants, and other distribution partners need to develop cloud services management capabilities- program managing across organizations within their partner ecosystems

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© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 29 Enter the Early Cloud Era…


Many Say ROI & Deployment Speed Expectations Not Met… Yet Still Pioneers are Largely Satisfied with their Cloud Solution

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Q: On a 1 to 6 scale, how much do you agree with the following statements… ? Base = Pioneers (n=58)

•  About a third willing to sign multi-year contracts with cloud services provider •  Organizations clearly have realistic expectations as they learn….


No Turning Back…Pioneers and Planners Both Estimate that 30% of IT Will be in Cloud By 2015

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•  Even Stragglers expect to be using Cloud by 2015!!!

Q: What percentage of your IT will be outsourced to a cloud provider by 2012? 2015 ? (n=126)


Generate Demand During the Early Cloud Era

Target the Right Audience

Don’t bother with organizations with fewer than 1000 employees at this point

in the market

Look for organizations with high levels of outsourcing, & key technologies like SANs, server & storage virtualization

Educate & partner with your best solution partners

Don’t ignore enterprise’s top business management

Use the Right Message

Position your message as to how your solution addresses needs of remote and

mobile workers

Make sure you highlight your professional services capabilities and strengths

Address motivators as speed of deployment and cost reduction

Address concerns of security risks, reduced control, & network performance

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© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 33

WaveLength Market Analytics LLC www.wlanalytics.com 415.519.7030

© All Rights Reserved

Thank you

Winn Technology Group www.winntech.net

727-789-0006

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