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Cloud Outlook Through 2020:
Win, Serve, And Retain Customers In
The Digital Transformation Age
Dave Bartoletti, Principal Analyst
@DaveBartoletti
December 6, 2016
3© 2016 Forrester Research, Inc. Reproduction Prohibited
Hello
Dave Bartoletti, Principal Analyst
Serving Infrastructure and Operations Pros
• Virtualization and cloud veteran, advising
clients on public cloud platforms, cloud
transformation, cloud management, cloud
economics and modern app platforms
• IBM, TIBCO, Fidelity, Enigmatec (EMC)
“It’s no longer the big beating the small.
It’s the fast beating the slow”
Eric Pearson, CIO
InterContinental Hotels Group
© 2016 Forrester Research, Inc. Reproduction Prohibited 5
Welcome to the Age of the Customer
© 2016 Forrester Research, Inc. Reproduction Prohibited 6
Fast digital businesses form cloud-based ecosystems centered on the customer
© 2016 Forrester Research, Inc. Reproduction Prohibited 7
Public Cloud PLATFORMS: Hypergrowth through 2020…
Source: Forrester Report: “The Public Cloud Services Market Will Grow Rapidly To $236 Billion in 2020”
35% ANNUAL GROWTH RATE
$32B GLOBAL MARKET IN 2017
$64B GLOBAL MARKET IN 2020
50% WILL BE REPLACEMENT
Public cloud is
only 22% of 2017
total global
server/storage h/w
spend
That leaves
$115B+ spend in
2017 = the private
cloud opportunity
© 2016 Forrester Research, Inc. Reproduction Prohibited 8
10%
19%
25%
33%
49%
0%
10%
20%
30%
40%
50%
% of global companies who use a public cloud IaaS/PaaS platform
Sources: Forrester’s Forrsights Hardware Survey, Q3 2013 (n=1253); Forrester’s Global Business Technographics Infrastructure Surveys [2014, N=3190; 2015, N=3592; 2016, N=3503].
Public cloud ADOPTION is also in hypergrowth
2013 2014 2015 2016
What are your firm’s plans to adopt public
cloud pay-per-use IaaS/PaaS platforms?
2017 (est)
© 2015 Forrester Research, Inc. Reproduction Prohibited 9
Where we are today
› Public megaclouds set the pace for developers, but
private cloud is still very often IT’s starting point
› IT leadership has stopped fighting the cloud internally:
• Look to partners to help them learn to manage public cloud
• Take a fresh look at their application portfolios
• Re-evaluate private cloud efforts: what’s not working?
• Re-evaluate their existing infrastructure portfolios
© 2016 Forrester Research, Inc. Reproduction Prohibited 10
CSP Opportunity in 2017: 5 Top Trends
1. Modernization and migration of
complex enterprise apps
2. Containers everywhere
shake up platform foundations
3. Serving two masters: cloud-native and digital
transformers
4. Cloud service providers find app, geo or
industry niches
5. Hybrid IT is here today and
someone’s got to manage it
© 2016 Forrester Research, Inc. Reproduction Prohibited 11
Help customers identify and modernize complex enterprise apps
Source: May 19, 2015, “Digital Insights Are The New Currency Of Business” Forrester report
Multiple viable options for
core enterprise applications:
Replace (with SaaS)
Rebuild (net new)
Lift and Extend
Hybrid Extend
“Lift and Shift”
© 2015 Forrester Research, Inc. Reproduction Prohibited 12
Help your customers analyze their application portfolios for a right-sized migration strategy
© 2016 Forrester Research, Inc. Reproduction Prohibited 13
Staff up to help customers understand and experiment with containers
Container DIY
Requires assembly,
platform engineering
skills, risk tolerance, and
strong ecosystem
participation
CaaS
Requires some
assembly and skills
and risk tolerance;
limited curation
PaaS
Requires little
assembly and fewer
skills; stronger
curation
© 2016 Forrester Research, Inc. Reproduction Prohibited 14
Source: May 6, 2016, “Vendor Landscape: Public Cloud Platforms Consolidate, But New Disruptions On The Way” Forrester report
Not fast and slow teams, but fast and faster teams
© 2016 Forrester Research, Inc. Reproduction Prohibited 15
Target the white space:
• ~6 firms dominate public
• Others expanding
functionally or regionally
• Desktops, databases,
BC/DR, integration, etc.
are underserved cloud
services markets
• Local market support is
in demand
Fill the white space left by the megaclouds
© 2016 Forrester Research, Inc. Reproduction Prohibited 16
Create geographic or industry differentiation
34%
26%
30%
23%
32%
18%
14%
18%
2016 Public Cloud Adoption By Industry › Leading:
business services,
manufacturing,
utilities
› Lagging:
financial services,
insurance, health
care
› Fastest Growth:
retail and
media/entertainment
© 2015 Forrester Research, Inc. Reproduction Prohibited 17
Hosted
Private
Trad Hosting
Public
SaaS
App
Private
Cloud
“Hybrid”
Data Center
On-premises Off-premises
Simplify the most difficult hybrid IT challenges today
INTEGRATION
VISIBILITY
CROSS-CLOUD
SECURITY
LICENSE
PORTABILITY
WORKLOAD
PORTABILITY
DATA
LOCALITY
LATENCY AND
DIRECT CONNECT
© 2016 Forrester Research, Inc. Reproduction Prohibited 18Base: 495 Midsized US & EU hardware decision-makers planning/implementing Public Cloud; Source: Forrester BT Infrastructure Survey, Q3 2016.
Target the top 5 concerns of mid-sized companies who are implementing public cloud services
•Need: unified security assessment, identity & access mgmt
1. Security / Application & Data Protection Concerns
•Need: license assessment, portability and license tracking support
2. Software Licensing Issues
•Need: cloud platform + app performance monitoring and usage analytics
3. Maintaining Adequate Service Levels & Performance
•Need: public cloud vendor compliance expertise and platform reviews
4. Meeting Specific Compliance Requirements
•Need: Hybrid cloud managed services and hybrid monitoring tools
5. Too Complex To Manage On Our Own
© 2016 Forrester Research, Inc. Reproduction Prohibited 19
IT needs help with cloud management TODAY
Base: 495 Midsized US & EU hardware decision-makers planning/implementing Public Cloud
Source: Forrester BT Infrastructure Survey, Q3 2016.
© 2016 Forrester Research, Inc. Reproduction Prohibited 20
Determine your CSP business model mix
INTEGRATOR MODEL
Revenue driven by
employee and project
efficiency
Differentiation driven by
number of experts, skills
areas, project efficiency
HOSTER MODEL
Revenue driven by server/rack
yield for data center floor
space
Differentiation driven by
managed services and
automation capabilities
CLOUD-FIRST MODEL
Revenue driven by
subscriptions to cloud
services
Differentiation driven by
customer experience, ease
of consumption
© 2016 Forrester Research, Inc. Reproduction Prohibited 21
Differentiating CSP services for 2017
CLOUD MANAGEMENT
• Self-Service Catalogs
• DevOps / CD / Patch **
• Cloud Cost, Compliance,
Performance Monitoring **
• Cloud Operations**
CLOUD PLATFORMS
• Hosted Private Cloud
• Managed Public Cloud
• Direct Connect **
• Analytics/ML/AI **
• IoT Platforms
CLOUD ADVISORY
• Portfolio Analysis
• BC/DR Planning
• VM Migration **
• DB Migration **
• Security Assessment**
© 2016 Forrester Research, Inc. Reproduction Prohibited 22
Today’s top barrier to expanding cloud use for SME? Finding skilled staff.
To fill the gaps for your customers:
› Hire cloud security experts (access management, compliance, data residency)
› Train staff on cloud cost optimization (someone has to track cloud costs)
› Build a public cloud managed service practice (no one owns this space yet)
› Hire analytics/data science experts (data everywhere and not enough insight)
› Beef up converged infrastructure and software-defined storage/network skills
“From supplier to partner”
23© 2016 Forrester Research, Inc. Reproduction Prohibited
http://recode.net/2016/01/06/netflix-ceo-reed-hastings-on-china-hbo-and-the-surprise-success-of-making-a-murderer-qa/
“We realized we learned best
by getting in the market and
then learning, even if we’re
less than perfect…”
