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Enterprise Cloud Computing adoption and buying trends. Appeal to motivatorsMitigate concerns What Partners are Involved?Role of professional servicesThird-party Involvement in buying & implementing cloud
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© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 1
Generating Demand:
Enterprise IT Buying in the Early Cloud Era February 2011
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
Today’s Speakers
• WaveLength Market Analytics: Since 2001, specializing in combining
knowledge of technology markets, products and services with data
management & quantitative analysis for strategies & programs that
deliver superior results.
• Speaker – Natalie Robb Principal Analyst with WaveLength Market
Analytics.
• Winn Technology Group Since 1990has supported over 800 technology
firms with thousands of demand generation solutions.
• Speaker – Geoffrey Swallow, President Winn Technology Group
32 years experience in technology marketing.
2
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
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
3
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
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 provided to provide respondents
the ability to answer via web
• Provided incentive to increase response rates
• Sample size = 126
• Collected summer 2010
4
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
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
5
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
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. 7 Cloud Market Adoption and Penetration
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
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
8
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.
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
Besides SaaS: Private Clouds and PaaS Most Common
9
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.
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
Cloud Apps Not Yet Mission Critical
10
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
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
Pioneers Mostly Migrate Legacy Apps
11
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
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
Pioneers & Planners More Likely to Use SAN,
NAS, & Virtualized Storage
12
• 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%
Virtualized Servers Virtualized Storage 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%
Percentage of Each Segment Using Key Technologies
Cloud Pioneers Cloud Planners Cloud Stragglers
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
Pioneers Already Outsource More Than Planners
and Far More than Stragglers
Storage
Data Back-ups
Network Management
Perimeter Security
Disaster Recovery
13.9%
13.9%
25.0%
28.8%
21.3%
21.9%
15.6%
21.9%
34.4%
18.8%
22.8%
31.6%
33.3%
35.4%
39.7%
Current Outsourcing
Pioneers Planners Stragglers
13
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
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
Shift to Cloud Architectures Well-Underway
Ente
rpri
se C
loud
Penetr
ati
on
• 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
Adopti
on &
Pla
nnin
g
• 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
14
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 15 Moving the Market: Motivators & Barriers
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
Top Motivators: Cost Cutting & Speedy
Application Deployment
16
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
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
Reduced Control is Top Security Concern for
Pioneers
17
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
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
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
18
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
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
The Network is Underlying Infrastructure Getting
Most Evaluation… from all Market Segments
19
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
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
Generate Demand by Appealing to Motivators &
Mitigating Risks
Mess
age t
o M
oti
vato
rs
• 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
Mess
age t
o M
itig
ate
Ris
ks • 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
20
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 21 Reaching the Customer: Role of Partners
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
In Selecting Partner for Cloud Services,
Professional Services is Most Critical for Both
Pioneers and Planners
Professionalservices
Businessprocess re-engineering
Performancemanagement& monitoring
SLAs Creation ofvertical
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
22 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
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
Planners Involve More Tech Segments than
Pioneers in Cloud Implementation
23
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
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
… But, Overwhelmingly Systems Integrators Most
Important Partner for Pioneers while its
Software for Planners
24 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
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
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
25
CloudPioneers
CloudPlanners
CloudStragglers
47.2%
35.7% 30.4%
Those Who Strongly Agree or Agree: Top Business Management is Very
Involved with Purchasing Decisions Regarding Cloud Computing
CloudPioneers
CloudPlanners
CloudStragglers
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
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
Brand, Ability to Manage, Application Features &
Functions, Monitored Service Levels Will Become Key
Service Differentiators Channels
• 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
26
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
Generating Demand Will Require Fewer, but
More Substantive Partners
Technolo
gy
Part
ners
hip
s
• 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
27
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 28 Enter the Early Cloud Era…
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
Many Say ROI & Deployment Speed Expectations
Not Met… Yet Still Pioneers are Largely Satisfied
with their Cloud Solution
29
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….
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
No Turning Back…Pioneers and Planners Both
Estimate that 30% of IT Will be in Cloud By 2015
30
• 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)
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
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
31
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved. 32
WaveLength Market Analytics LLC
www.wlanalytics.com
415.519.7030
© All Rights Reserved
Thank you
Winn Technology Group
www.winntech.net
727-789-0006
Q & A
© by WaveLength Market Analytics and Winn Technology Group. All Rights Reserved.
Demand Center (Generation) Strategies
• Part 3 of 8 part Webinar Light series
• Thought leadership content
• Practicing what we preach
• Focused content and messaging
• Market drivers
• Leveraging the demand center
33