IBM Relay 2015: Cloud is All About the Customer

IBM Bluemix Market Credible Study: Executive Summary Data Review

John Rymer, Vice President and Principal AnalystChris Taylor, Consultant

November 2015

› For internal use only

© 2015 Forrester Research, Inc. Reproduction Prohibited 3

Agenda

›Project objectives and approach (includes demographics)›Executive summary›Key findings›Next steps


Agenda


Project objectives and approach› IBM’s Bluemix overall value proposition is that it extends customer “cloud

freedom of (deployment) choice.” The product features support this message, but IBM wants to develop materials that promote prospect and customer confidence that the offering:

• Can be implemented quickly and without requiring expensive and scarce technical skills.• Will actually reduce ongoing platform/infrastructure management effort for the customer,

regardless of deployment option.• Will benefit the broad range of enterprise applications, not just systems of engagement.

› IBM asked Forrester for help in obtaining evidence that customers need these additional benefits (beyond freedom of deployment choice) and are hard-pressed to obtain them with current products, as well as stories about the business results that can accrue from the benefits.

› Methodology for this study included:• Online survey• 200 total respondents 70 in the US; 30 each in the UK, Germany, and France,

and 40 in Latin America• Respondents from B2B organizations with 500+ employees• CIO, VP, Director, or manager level focusing on app dev and infrastructure


Source: A commissioned study conducted by Forrester Consulting on behalf of IBM, September 2015

Demographics: Location and Industry“Which of the following best describes the industry to which your company belongs?”

Base: 200 Global IT decision-makers involved in developing and deploying applications to a cloud platform.

“In which country are you located?”

Brazil

Mexico

France

Germany

United Kingdom

United States

10%

10%

15%

15%

15%

35%

Chemicals and metals

Media and leisure

Agriculture, food, and beverage

Energy, utilities, and waste management

Telecommunications services

Consumer product manufacturing

Construction

Government

Other

Retail

Education and nonprofits

Transportation and logistics

Healthcare

Electronics

Business or consumer services

Financial services and insurance

Manufacturing and materials

IT (Technology)

1%

1%

2%

2%

2%

3%

3%

3%

3%

4%

4%

5%

5%

8%

10%

10%

14%

20%

“Using your best estimate, how many employees work for your firm/organization worldwide?”

500 to 999 employees

1,000 to 4,999 employees

5,000 to 19,999 employees

20,000 or more employees

29%

36%

22%

13%

Demographics: Company and department“Which of the following best

describes your current position/department?”

IT80%

IT oper-ation

s20%

“Which title best describes your position at your organization?”

VP12%

Manager22%

Director25%

C-level 41%

Source: A commissioned study conducted by Forrester Consulting on behalf of IBM, September 2015Base: 200 Global IT decision-makers involved in developing and deploying applications to a cloud platform.

“Which of the following best describes your role within IT?”

Business intelligence6%

Infrastruc-ture and

operations8%

Software develop-

ment/test-ing

16%

IT man-agement

70%

Demographics: Role and responsibility within IT“What is your involvement / awareness regarding your organization's decision making process for application

and infrastructure management?”Involved in decisions

3% Key In-fluencer

16%

Final De-cision Maker81%



Agenda



Executive summary

1. Respondents favor public elastic clouds and VPC today.

2. Applications for customer engagement, operations, and analytics dominate cloud, and systems of record are already prominent. • Important to not equate “customer” applications with SoE and SoI only; suggests other SoRs

headed to cloud.

3. Ninety percent expect to move more SoR apps in cloud; SaaS replacement is their preferred approach. • Why? 1) get implemented fast 2) without a lot of IT staff.

4. Top factor in selecting a cloud-service type: Application services and data available from vendor. • Trumps security and application control.

5. Ninety percent expect private, internal clouds to play bigger role in strategy. Biggest barriers to adopting private/internal clouds: • 1) Lack of expertise in *managing* private internal clouds, 2) lack of expertise in *implementing*

private internal clouds.

Q16. Which type of cloud services does your organization most prefer to use?

External hosting environment

Private, internal cloud (locally installed in your data center) -vendor managed

Private, internal cloud (locally installed in your data centers) - self-hosted

Virtual private cloud/dedicated cloud service hosted by a vendor

Public cloud service (elastic multitenant cloud)

1%

6%

24%

30%

39%


Public cloud is the top preferred cloud offering

Finding 1

Q3. Which of the following more specifically represent the applications your enterprise has built, deployed, and run in the cloud?

A custom application unique to our business

Compliance applications

Human capital management

Production management

Financial management

Customer management

Internal Web and/or mobile applications

Customer-facing mobile applications

Customer-facing Web applications

Predictive analytics

Classification and ranking

BI and data warehousing

Customer analytics

Sys

tem

s of

eng

agem

ent

19%

34%

35%

49%

60%

68%

32%

53%

63%

32%

38%

48%

64%


Applications for customer engagement, operations, and analytics dominate cloud

Finding 2

Q1. For which of the 3 types of applications has your enterprise used cloud-computing services to build, deploy, and/or run during the last two years?

Systems of insight

Systems of engagement

Systems of record

66%

68%

74%


Over 2/3 of companies have deployed at least one application of each system type into the cloud

Finding 2

Q11b. Which of the following would you expect to implement as you take your systems of record to the cloud?

(for those using multiple systems (must select at least 2)

Replacement

Cloud extend

Re-host and extend

Life and shift

SaaS replacement

28%

39%

47%

49%

62%

Source: A commissioned study conducted by Forrester Consulting on behalf of IBM, September 2015Base: 178 Global IT decision-makers expecting to use multiple of the above options when taking systems of record to the cloud..

SaaS replacement preferred by almost 2/3rds of respondents moving SoR to the cloud

Finding 3

Q10. Why would your business choose the method specified in Q9 when taking systems of record to the cloud?

Minimize business disruption time

Requires less technical expertise

Maintain custom functionality of existing apps

Maintain usability for business users (preserve familiarity with apps/interface)

Fewer requirements for IT staff

Faster implementation time

21%

24%

38%

45%

50%

57%


Companies don’t want a long implementation process when shifting applications to the cloud, and they also prefer methods which have fewer requirements for IT staff

Finding 3

Q17. What are the most important factors in your enterprise's selection of a cloud service type?

Speed application-deployment time

Minimize business disruption

Extend existing relationship with a strategic vendor

App/service portability across cloud (on-prem and off-prem) and other vendors

Reduce the cost of IT operations

Reduce the cost of software projects

Maintain control of application reliability and performance

Maintain control of data security and privacy

Ability to scale and manage a common pool of resources for our many applications

Ability to use vendor application services and/or data sets to make project better

8%

6%

8%

7%

14%

12%

14%

15%

16%

18%

3%

4%

6%

8%

8%

14%

14%

11%

12%

12%

6%

4%

5%

3%

12%

9%

11%

11%

6%

7%

Private, internal Virtual Private Public Cloud


Top factor by preferred cloud type

Finding 4












6%

3%

4%

7%

16%

20%

17%

13%

5%

12%

11%

10%

14%

7%

16%

9%

8%

10%

11%

6%

6%

5%

9%

16%

17%

21%

22%

Rank 1 Rank 2 Rank 3


Companies want to utilize their cloud vendors to make their projects better and scale across applications as needed—all while remaining secure and reliable

Finding 4

Q6. Within the next two years, does your organization plan to increase the number of systems of record applications it either builds or migrates to cloud platforms?

Q12. Within the next two years, does your organization plan to increase the number of systems of insights applications it either builds or migrates to cloud platforms?

Q18. Do you expect private/internal clouds to play a greater role in your enterprise’s cloud strategy during the next two years?

Private/Internal Clouds

Systems of Insights

Systems of Record

92%

87%

89%


Nearly all companies plan to increase the role of systems of record, systems of insight, and private/internal clouds in their cloud strategies.

Finding 5

Q21. What are the biggest barriers to your company's adoption of private/internal clouds?

Lack of governance policies

Lack of resources/budget

Lack of expertise in running data centers generally

Lack of features and resources compared to public clouds

Lack of expertise to implement private internal cloud envi-ronments

Lack of expertise to manage private internal cloud envi-ronments

15%

14%

13%

19%

17%

22%

11%

15%

16%

17%

22%

19%

15%

17%

17%

16%

17%

17%


Note: 9% of respondents answered that they had not experienced any barriers.


Biggest barriers to adopting private/internal clouds: 1) Lack of expertise in *managing* private internal clouds, 2) lack of expertise in *implementing* private internal clouds

Finding 5


Agenda

›Project objectives and approach (includes demographics)›Executive summary›Key Findings›Next steps


Current State

Q2. Regarding the applications you are running in the cloud, what percentage of your total cloud applications pertains to each category?


SoR34%

SoE36%

SoI30%

Using applications in all 3 systems (n=76)

SoE49%

SoI51%

Using SoE and SoI only(n=18)

SoR54%

SoE46%

Using SoE and SoR only(n=25)

SoR53%

SoI47%

Using SoR and SoI only(n=21)

SoE only

SoI only

SoR only

8%

9%

13%

Applications in cloud

Companies are running a fairly balanced number of applications within the cloud (per system type)

Q4. Looking across the applications your enterprise has deployed to the cloud, what benefits have you experienced through cloud adoption?

(select all that apply)

Globalized our business processes

Made promised software delivery dates more predictable, reliable, and transparent

Modernized older applications that are key to our success

Utilizing vendor application services and/or data sets made projects better

Reduced the cost of software projects

Improved the quality of the software we deliver

Reduced the cost of IT operations

Achieved faster delivery of software projects

Improved IT security

Cloud provided the large scaling capacity these applications demand

30%

32%

36%

40%

40%

44%

44%

46%

55%

64%


Top 2 benefits realized: Easy/ready application scaling and improved IT security

Q5. Of the cloud benefits you have experienced, please identify of the top benefit?

Globalized our business processes

Reduced the cost of software projects

Modernized older applications that are key to our success

Improved the quality of the software we deliver

Achieved faster delivery of software projects

Made promised software delivery dates more predictable, reliable, and transparent

Reduced the cost of IT operations

Utilizing vendor application services and/or data sets made projects better

Improved IT security

Cloud provided the large scaling capacity these applications demand

4%

6%

6%

7%

8%

8%

8%

9%

16%

28%


Of single most top benefit by far is easy/ready application scaling – at 28% of respondents


Q12. Within the next two years, does your organization plan to increase the number of systems of insights applications it either builds or migrates to cloud platforms?

Q18. Do you expect private/internal clouds to play a greater role in your enterprise’s cloud strategy during the next two years?

Private/Internal Clouds

Systems of Insights

Systems of Record

92%

87%

89%


Nearly all companies plan to increase the role of systems of record, systems of insight, and private/internal clouds in their cloud strategies.

Q7. You indicated your company is planning to increase the number of system of record/system of insight/private & internal cloud applications it takes to the cloud. What are the key objectives

driving that decision?

Make promised software delivery dates more predictable, reliable, and transparent

Utilizing vendor application services and/or data sets to make projects better


Globalize our business processes

Achieve faster delivery of software projects

Improve the quality of the software we deliver

Modernize older applications that are key to our success


Cloud provides the large scaling capacity these applications demand

Improve IT security

18%

20%

21%

25%

24%

25%

22%

34%

24%

47%

15%

15%

23%

27%

26%

22%

25%

29%

31%

49%

17%

20%

23%

23%

25%

25%

28%

31%

34%

45%

Systems of Record (N=183) Systems of Insight (N=173) Private/Internal Clouds (N=178)


Improved IT security is the top motivator for all three groups, followed by easy/ready scaling for SoR and SoI, and reduce cost of IT ops for private/internal cloud

Q9. Regardless of your current plans for your systems of record, which method best describes how you would approach taking systems of record to the cloud?

Replacement'

Cloud extend'

Lift and shift'

Re-host and extend'

SaaS replacement'

9%

17%

20%

20%

34%


SaaS replacement is the preferred method for shifting SoR applications to the cloud

Finding 3

Q22. Please rate, on a scale from 1 to 5, your company's perception regarding the following 'managed cloud' services?

Vendor-provided full management and updating of apps, platforms, and infrastructure in public and private clouds

Vendor-provided management and updating of apps in public clouds

Private, internal cloud updated remotely by vendor

Private, internal clouds managed remotely by vendor

30%

30%

32%

34%

47%

47%

44%

38%

16%

20%

20%

22%

5 - Very positive perception 4 32 1 - Very negative perception


Respondents have an overall positive perception of full managed cloud services, including both public and private clouds


Challenges

Q7b/Q13b/Q19b. What are some of the challenges/concerns your company has as it plans to increase the number of system of record/systems of insight/private & internal cloud applications it

takes to the cloud?

We have no challenges/concerns

Lack of expertise/high cost to acquire needed talent

Poor match between cloud environment and architecture/language/runtime of the applica-tion

Concerns about application performance (reads, writes, etc.)

Risk of operational disruption not worth the potential benefits

Concerns about inability to control resources

Cost to run in public clouds

Concerns regarding regulations governing data storage

Concerns about the security and privacy of data

12%

22%

24%

29%

24%

20%

33%

34%

31%

9%

29%

22%

30%

20%

30%

31%

28%

40%

10%

21%

23%

25%

25%

28%

28%

34%

43%



Security is the top concern/challenge of the more SoR and more SoI groups. Top concern with private cloud is storage compliance and cost of public clouds












6%

3%

4%

7%

16%

20%

17%

13%

5%

12%

11%

10%

14%

7%

16%

9%

8%

10%

11%

6%

6%

5%

9%

16%

17%

21%

22%



Companies want to utilize their cloud vendors to make their projects better and scale across applications as needed—all while remaining secure and reliable












8%

6%

8%

7%

14%

12%

14%

15%

16%

18%

3%

4%

6%

8%

8%

14%

14%

11%

12%

12%

6%

4%

5%

3%

12%

9%

11%

11%

6%

7%

Private, internal Virtual Private Public Cloud


Top factor by preferred cloud type

Q23. How frequently can your IT and DevOps teams deliver updates to internal platforms and infrastructure?

Once every 12 months or longer

Once every 6 to 11 months



Once every 3 to 4 weeks

Once every 1 to 2 weeks

Multiple times per week or more often

8%

16%

30%

20%

12%

10%

3%

25%


Internal IT and DevOps teams struggle to keep pace with platform and infrastructure changes that the business demands

54%


Opportunity

Q11a. Would you expect your enterprise to use more than one of the following approaches as it takes its systems of record to the cloud?

Yes89%

No11%

Options include "Lift and shift"; "SaaS replacement"; "Re-host and extend"; "Replacement"; "Cloud extend"


Most companies utilize multiple methods for transitioning apps to the cloud

Q15. Which of the following types of cloud services has your enterprise used to build, deploy, and run applications during the last two years?

External hosting environment

Private, internal cloud (locally installed in your data center) - vendor managed

Private, internal cloud (locally installed in your data center) - self-hosted

Virtual private cloud/dedicated cloud service hosted by a vendor

Public cloud service (elastic multitenant cloud)

11%

28%

44%

56%

61%


The majority of companies are choosing to run applications on both public and private cloud environments


Agenda



Next steps

› 2 or 3 qualitative interviews still to be done.

›Webinar presenting these findings scheduled on 10/28.

› Recommend a paper on these findings as well.• We believe these findings uniquely speak to a hot topic in cloud adoption

Thank youJohn R. [email protected]

Chris [email protected]


Appendix


Yes92%

No4%

Don't know4%


Nearly all companies are planning to move more systems of record to cloud platforms.

Q7. You indicated your company is planning to increase the number of system of record applications it takes to the cloud. What are the key objectives driving that decision?










Improve IT security

17%

20%

23%

23%

25%

25%

28%

31%

34%

45%

Source: A commissioned study conducted by Forrester Consulting on behalf of IBM, September 2015Base: 183 Global IT decision-makers planning to increase the number of system of record applications they take to the cloud.

Improved IT security is the most common motivator for increasing SoR applications in the cloud …

Q7b. What are some of the challenges/concerns your company has as it plans to increase the number of system of record applications it takes to the cloud?




Concerns about culture change







10%

21%

23%

23%

25%

25%

28%

28%

34%

43%

Source: A commissioned study conducted by Forrester Consulting on behalf of IBM, September 2015Base: 183 Global IT decision-makers planning to increase the number of system of record applications they take to the cloud.

…yet concerns about security and privacy of data are among top concerns when moving to cloud

Q12. Within the next two years, will your organization plan to raise the number of systems of insight applications it either builds or migrates to cloud platforms?

Yes86%

No14%


A large number of companies intent to increase the number of systems of insight they migrate to the cloud

Q13. You indicated your company is planning to increase the number of system of insight applications it takes to the cloud. What are the key objectives driving that decision?










Improve IT security

15%

15%

22%

23%

25%

26%

27%

29%

31%

49%

Source: A commissioned study conducted by Forrester Consulting on behalf of IBM, September 2015Base: 173 Global IT decision-makers planning to increase the number of system of insight applications taken to the cloud.

Improved IT security is the most common motivator for increasing SoI applications in the cloud …

Q13b. What are some of the challenges/concerns your company has as it plans to increase the number of system of insight applications it takes to the cloud?










9%

20%

22%

28%

29%

30%

30%

31%

40%

Source: A commissioned study conducted by Forrester Consulting on behalf of IBM, September 2015Base: 173 Global IT decision-makers planning to increase the number of system of insight applications taken to the cloud.

…yet concerns about security and privacy of data are among top concerns when moving to cloud

Q8/Q14/Q20.. You indicated your company is not planning to increase the number of system of record/system of insight/private & internal cloud applications it takes to the cloud. What are the

key factors impacting that decision?









6%

19%

25%

25%

25%

31%

38%

38%

19%

22%

15%

26%

19%

26%

30%

56%

25%

12%

25%

25%

38%

12%

12%

25%



For companies not planning to increase their number of cloud applications, security is also a major factor.

Q18. Do you expect private/internal clouds to play a greater role in your enterprise's cloud strategy during the next 2 years?

Yes89%

No8%

Don't know3%


Private cloud usage is expected to increase

Q19. You indicated you anticipate private/internal clouds will play a greater role in your ongoing cloud strategy. What are the key benefits you see through greater use of private/internal clouds?










Improve IT security

18%

20%

21%

22%

24%

24%

25%

25%

34%

47%

Source: A commissioned study conducted by Forrester Consulting on behalf of IBM, September 2015Base: 178 Global IT decision-makers who expect private/internal clouds to play a greater role in their cloud strategy..

Companies expect private clouds improve IT security and reduce IT operations cost

Q19b. What are some of the challenges/concerns your company has as it plans to increase its use of private/internal clouds?








Cost to run in private clouds


12%

20%

22%

24%

24%

29%

31%

33%

34%

Source: A commissioned study conducted by Forrester Consulting on behalf of IBM, September 2015Base: 178 Global IT decision-makers who expect private/internal clouds to play a greater role in their cloud strategy..

Data regulations and cost are concerns when operating more in private clouds

Q8. You indicated your company is not planning to increase the number of system of record applications it takes to the cloud. What are the key factors impacting that decision?




Concerns about culture change






12%

12%

12%

12%

25%

25%

25%

25%

38%

Source: A commissioned study conducted by Forrester Consulting on behalf of IBM, September 2015Base: 8 Global IT decision-makers NOT planning to increase the number of system of record applications they take to the cloud.

N=8

Q14. You indicated your company is not planning to increase the number of system of insight applications it takes to the cloud. What are the key factors impacting that decision?









15%

19%

19%

22%

26%

26%

30%

56%

Source: A commissioned study conducted by Forrester Consulting on behalf of IBM, September 2015Base: 27 Global IT decision-makers NOT planning to increase the number of system of insight applications taken to the cloud.

N=27

Q20. You indicated you do not anticipate private/internal clouds will play a greater role in your ongoing cloud strategy. What are your key concerns that would prevent greater use of

private/internal clouds?








Cost to run in private clouds

6%

19%

25%

25%

25%

31%

38%

38%

Source: A commissioned study conducted by Forrester Consulting on behalf of IBM, September 2015Base: 16 Global IT decision-makers who do NOT expect private/internal clouds to play a greater role in their cloud strategy..

N=16