INDUSTRY INSIGHTS & CLOUD SKEPTICSHOW ENTERPRISES USE THE CLOUD & WHAT SKEPTICS FEAR

ALEX MILLERSENIOR ANALYST, CLUTCH.CO

ABOUT CLUTCH

▸ https://clutch.co

▸ Washington, DC based

▸ B2B Ratings, Reviews, and Research on IT Services Providers and Software Solutions

▸ Over 5,000 reviews

▸ Research reports on IT segments such as mobile development, marketing software, BI/Big data platforms, cloud technologies

“CLOUD COMPUTING IS OFTEN FAR MORE SECURE THAN TRADITIONAL COMPUTING, BECAUSE COMPANIES LIKE GOOGLE AND AMAZON CAN ATTRACT AND RETAIN CYBER-SECURITY PERSONNEL OF A HIGHER QUALITY THAN MANY GOVERNMENTAL AGENCIES.”

Vivek Kundra FORMER FEDERAL CIO OF THE UNITED STATES

CONTENTS

▸ STATE OF THE CLOUD

▸ BENEFITS AND USAGE

▸ SECURITY

▸ OTHER OBSTACLES FOR CLOUD

▸ TURNING SKEPTICS INTO BELIEVERS

Disclaimer: Stats and figures in this presentation were complied from multiple sources and audiences, and should therefore not be used comparatively. Please consider these figures independently of each other.

THE TERM “CLOUD COMPUTING” FIRST USED IN MODERN UNDERSTANDING

AMAZON WEB SERVICES’ EC2 IS LAUNCHED

SALESFORCE IS INTRODUCED

1996 1999 2006 2014 2015

CLOUD CONTAINS 1 EXABYTE OF DATA

GLOBAL SAAS SPEND: $49BGLOBAL IAAS SPEND: $16.5B

Data Sources: Nasuni State of Cloud Storage 2015, Forbes: “Roundup Of Cloud Computing Forecasts And Market Estimates Q3 Update, 2015", MIT Technology Review: “Business in the Cloud”

~ 1000 petabytes~1M terrabytes

~ Quintillion bytes

~500,000,000,000 iPhone pictures

STATE OF THE CLOUD

CLOUD MILESTONES

DC MOVES TO THE CLOUD

▸ The U.S. CIO issues the White House’s Cloud First Policy on February 8, 2011

▸ $20 billion of the Federal $80 billion IT budget is targeted for cloud migration

▸ 2013: AWS Receives Agency Authority to Operate (ATO) from the Department of Health & Human Services (HHS) - becomes FedRAMP compliant

▸ 2014: Microsoft Office 365 becomes first EaaS (Email-as-a-Service) to receive FedRAMP accreditation and ATO

Data Sources: Federal Cloud Computing Strategy, AWS Blog: “AWS Achieves First FedRAMP(SM) Agency ATOs”, FederalTimes: “Microsoft 365 first cloud email to gain FedRAMP approval”

STATE OF THE CLOUD

CLOUD ADOPTION

▸ CLOUD ADOPTION FOR SMB REMAINS AROUND 50% ACCORDING TO REPORTS*

▸ CLOUD ADOPTION FOR ENTERPRISES HAS RISEN ABOVE 90%

▸ HYBRID CLOUD IS RAPIDLY GROWING ▸ 2015: 58% OF RESPONDENTS USE HYBRID CLOUD ▸ 2016: 71% OF RESPONDENTS USE HYBRID CLOUD

Data Sources: EvolveIP 2016 Cloud Adoption Survey, RightScale 2016 State of the Cloud Report, Clutch 2015 Small Business Storage Trends

STATE OF THE CLOUD

SPEND ON CLOUD SERVICES OVER 12 MONTHS

LESS THAN $50,000

$50,000 - $99,000

$100,000 - $499,999

$500,000 - $999,999

$1M - $4.9M

$5M - $10M

$10M +

0% 12.5% 25% 37.5% 50%

1%

1%

6%

6%

18%

13%

43%

11%

7%

22%

11%

21%

5%

6%

Over 1,000 Under 1,000

Company Size (employees)

Data Source: IDG 2015 Cloud Computing Survey

STATE OF THE CLOUD

EXPECTED 2016 SPEND ON CLOUDCOMPARED TO 2015

0%

25%

50%

75%

DECREASE 11% - 50% REMAIN MOSTLY FLAT INCREASE 11% - 50% INCREASE MORE THAN 50%

7%

56%

27%

6%

Data Source: Clutch 2016 Enterprise Cloud Computing Survey

STATE OF THE CLOUD

PUBLIC CLOUD VENDOR CHOICE (IAAS & PAAS OFFERINGS)

25%

50%

75%

100%

AWS AZURE GOOGLE CLOUD

13%

15%

8%

18%

29%

17%

10%20%

57%

Running Apps Experimenting Plan to Use

Data Source: RightScale 2016 State of the Cloud Report

STATE OF THE CLOUD

Data Source: Business Insider: “Amazon Web Services is becoming a nice predictable profit engine”

STATE OF THE CLOUD

KEY BENEFITS

▸ Top identified benefits of cloud technologies:

▸ Speed (access to infrastructure, time-to-market)

▸ Security

▸ Scalability

▸ Availability

▸ Efficiency (IT staff and resources)

▸ High performance

Data Sources:RightScale 2016 State of the Cloud Report, Clutch 2016 Enterprise Cloud Computing Survey

BENEFITS AND USAGE

CLOUD-FIRST SELLING POINTS

Data Sources: Federal Cloud Computing Strategy

BENEFITS AND USAGE

TOP TASKS COMPLETED USING CLOUD

0%

25%

50%

75%

100%

FILE STORAGE BACKUP/DR APP DEPLOYMENT

18%20%

20%

17%21%

22%

16%21%28%

First Priority Second Priority Third Priority

Data Source: Clutch 2016 Enterprise Cloud Computing Survey

BENEFITS AND USAGE

CLOUD INITIATIVES FOR 2016

0%

25%

50%

75%

100%

MOVING MORE WORKLOADS TO THE CLOUD OPTIMIZE EXISTING CLOUD USE EXPANDING PUBLIC CLOUD USAGE

38%43%35%

46%47%57%

Enterprise SMBData Source: RightScale 2016 State of the Cloud Report

BENEFITS AND USAGE

Data Source: Cloud Cruiser Public Cloud 2016 Survey

AWS SPECIFIC USAGE

DEVELOPMENT & TESTING

BIG DATA & ANALYTICS

SANDBOX ENVIRONMENTS

CUSTOMER-FACING APPLICATIONS

BACKUP/RECOVERY

0% 25% 50% 75%

19%

25%

30%

31%

59%

BENEFITS AND USAGE

SECURITYIS SECURITY YOUR PRIMARY CONCERN WITH CLOUD TECHNOLOGIES?

“I THINK WHAT WE’RE SEEING NOW, WHEN IT COMES TO THE CLOUD AND SECURITY, IS A BIT OF A MYTH THAT THE CLOUD IS LESS SECURE. I’VE HEARD THIS MANY TIMES, BUT IT DOES NOT SEEM TO BE TRUE IN REAL LIFE.”

David Linthicum SVP of Cloud Technology Partners

SECURITY

THE NUMBERS DON’T LIE

Data Sources: EvolveIP 2016 Cloud Adoption Survey, Clutch 2016 Enterprise Cloud Computing Survey, Rightscale 2016 State of the Cloud Report, IDG 2015 Cloud Computing Survey

SECURITY

SECURITY CONTRADICTIONSPRIMARY BENEFIT OF USING

CLOUD INFRASTRUCTURE

Physical Space 5%

Maintenance 6%Cost

7%

Mobility 7%

Flexibility 8%

Speed 9%

Scalability 9%

Data Space 12%

Efficency 15%

Security 22%

PRIMARY PROBLEMS ENCOUNTERED WITH CLOUD INFRASTRUCTURE

0%

50%

SECURITY TRAINING INCREASED COSTS DOWNTIME MOBILITY

21%25%

28%28%31%

Data Source: Clutch 2016 Enterprise Cloud Computing Survey

SECURITY

WHAT ABOUT COMPLIANCE REGULATIONS?

▸ Compliance with standards and regulations remains a primary concern for enterprises

Data Source: Clutch 2016 Enterprise Cloud Computing Survey, AWS Compliance, Microsoft Azure Compliance

SECURITY

“COMPANIES OFTEN USE COMPLIANCE CONCERNS AS AN EXCUSE FOR NOT USING THE

CLOUD. … BUT THESE COMMENTS ARISE FROM IGNORANCE. … IT’S ALL ABOUT UNDERSTANDING THE FEATURES AND FUNCTIONS THAT FACILITATE BEING

COMPLIANT IN THE CLOUD. A LOT OF EDUCATION NEEDS TO OCCUR.”

David Linthicum SVP of Cloud Technology Partners

▸ User education is a key problem area for cloud technologies, which can cause much of the concern with regulation compliance

▸ Like any new product, the task for providers is education, rather than simple system improvements

USER EDUCATION

SECURITY

SECURITY ISN’T THE ONLY CONCERN

Public Cloud Private Cloud

Lower TCO 23% 21%Enabling business continuity 16% 18%

Replacing on-prem legacy technology 15% 15%Improving customer support or services 14% 13%

Enabling innovation 14% 12%Speed of deployment 13% 14%

Saving on CAPEX 13% 15%

AREAS WHERE HELP IS NEEDED FROM VENDORS TO SELL PUBLIC/PRIVATE CLOUD TO INTERNAL STAKEHOLDERS

Data Source: IDG 2015 Cloud Computing Survey

OTHER OBSTACLES FOR CLOUD

LACK OF AWARENESS

OTHER OBSTACLES FOR CLOUD

DOES YOUR AGENCY TAKE ADVANTAGE OF SERVICES

IN THE CLOUD?

Not sure 25%

No 22%

Yes 53%

WHAT APPLICATIONS HAS YOUR AGENCY ALREADY MOVED TO THE CLOUD?

0%

25%

50%

NOT SURE EMAIL/COLLABORATION PUBLIC WEBSITE

25.56%34.44%35.56%

WHAT TYPE OF CLOUD DOES YOUR AGENCY’S

APPLICATIONS MOSTLY RESIDE IN?

Other 12%

Commercial Cloud service provider 17%

Governement-only commerical cloud (Hybrid) 12%

Government-run cloud 17%

Not sure 42%

I DON’T REALLY NEED TO KNOW WHERE MY

APPLICATIONS AND SYSTEMS RESIDE, JUST AS

LONG AS THEY WORK

Agree 69%

Disagree 31%

Data Source: Federal News Radio Executive Survey Series Cloud Survey 2016

From a study of federal agency usage of cloud technology, including:

▸ 41.5% from Civilian Agencies

▸ 16% from Department of Defense

LACK OF AWARENESS (CONT.)

OTHER OBSTACLES FOR CLOUD

HOW IS YOUR AGENCY TRAINING ITS WORKFORCE ABOUT CLOUD COMPUTING SERVICES?

WE ARE NOT RECEIVING ANY TRAINING

NOT SURE

FED. AGENCY IN-PERSON TRAINING

FED. AGENCY ONLINE TRAINING

FED. AGENCY WEBINARS

0% 12.5% 25% 37.5% 50%

11.9%

13.1%

17.86%

25%

41.67%

Data Source: Federal News Radio Executive Survey Series Cloud Survey 2016

LACK OF AWARENESS (CONT.)

▸ It’s not just a problem in the public sector

▸ Is SMB cloud usage really at only 52%

▸ Do enterprises understand their strategy in the cloud?

▸ IT, on average, expects 68 cloud services to be used in their company

▸ The average company uses 738 cloud services - over 10x what IT expects

OTHER OBSTACLES FOR CLOUD

Data Source: Skyhigh Network Cloud Adoption & Risk Report Q4 2015

TURNING SKEPTICS INTO BELIEVERS

BACK TO THE BENEFITS

TURNING SKEPTICS INTO BELIEVERS

PRIMARY BENEFIT OF USING CLOUD INFRASTRUCTURE

Physical Space 5%

Maintenance 6%

Cost 7%

Mobility 7%

Flexibility 8%

Speed 9%

Scalability 9%

Data Space 12%

Efficency 15%

Security 22%

Data Sources: Clutch 2016 Enterprise Cloud Computing Survey, Rightscale 2016 State of the Cloud Report

TURNING SKEPTICS INTO BELIEVERS

SOCIAL PROOF

▸ Enterprises are overwhelming shifting operations to the cloud

▸ Over half of the US Government houses applications in the cloud under The White House’s Cloud First Policy

▸ A reported 82% of surveyed companies that utilize cloud technologies have saved money

▸ 80% have seen operational improvements within the first 6 months of adopting cloud services

Data Source: NSK Inc: “IT Consultants' Insight on Business Technology”

RETURN ON INVESTMENT

▸ Be realistic - cloud operations are not always cheaper

▸ This requires financial understanding & commitments from IT, not just upper management

▸ “Developers are currently reigning supreme as the main users of many cloud services, being largely responsible for Amazon Web Services' 12 billion dollar revenue for this year alone. Developers aren't very interested in money, and often, they are simply in denial or are not being frugal about costs. Cloud services are cheaper if they're used in an optimal fashion. For example, when leaving your house, you turn the lights off. You don’t keep them on constantly. It's not very practical and it would lead to a high utilities bill. Leaving services running all the time and buying too much of them is a bad practice. Generally speaking, developers don't have a financial view of the world and only care about getting the best services. The cloud is much more efficient if it's used as it was intended.” — Deirdre Mahon, Chief Marketing Officer at Cloud Cruiser.

Data Source: Clutch: “Interview with Cloud Cruiser”

TURNING SKEPTICS INTO BELIEVERS

SECURITY

▸ Many breaches come from organizational oversight rather than system malfunction

▸ Security is no longer the universal primary concern

▸ Platforms such as AWS, Azure, Google Cloud, etc. are heavily investing in security

▸ Data center infrastructure

▸ Compliance and audit assurance programs

▸ Best practices from CSA and other organizations

TURNING SKEPTICS INTO BELIEVERS

SMALL STEPS TOWARDS A “CLOUDY” FUTURE

▸ It all comes back to education

▸ Educating upper management about the benefits

▸ Educating IT on cost-effective usage strategies

▸ Educating teams on security policies/correct usage

▸ Start small

▸ Follow the trend of utilizing basic cloud services, such as storage, backup, and basic development services

▸ Document and report the benefits

▸ Slowly migrate more operations to the cloud. Help ease migration costs

TURNING SKEPTICS INTO BELIEVERS

KEY TAKEAWAYS

1. Cloud adoption and usage is growing significantly

2. Skeptics are often unaware of benefits/have been misinformed

3. Many organizations/agencies are unaware of their cloud usage

4. Education needs to be the primary effort of cloud services

5. The cloud is gaining more recognition as a secure infrastructure option

6. It’s best to start small and naturally migrate additional operations when fit

TURNING SKEPTICS INTO BELIEVERS

THANKS!ALEX MILLER

@ALEX_B_MILLER LINKEDIN.COM/IN/AMILLER22

APPENDIX

RESOURCE LIST▸ AWS Blog: “AWS Achieves First FedRAMP(SM) Agency ATOs” - https://blogs.aws.amazon.com/security/post/TxPDA8F0N24N8Y/AWS-Achieves-First-FedRAMP-SM-Agency-ATOs

▸ AWS Compliance - https://aws.amazon.com/compliance/

▸ Business Insider: “Amazon Web Services is becoming a nice predictable profit engine” - http://www.businessinsider.com/amazon-web-services-profit-vs-total-amazon-profit-2016-5

▸ Cloud Cruiser 2016 Public Cloud Survey - http://www.cloudcruiser.com/resource/survey-public-cloud-costs-go-unchecked/

▸ Clutch: “Interview with Cloud Cruiser” - https://clutch.co/cloud/expert-interview/cloud-cruiser

▸ Clutch 2015 Small Business Storage Trends - https://clutch.co/cloud/resources/small-business-cloud-storage-trends-2015 and https://clutch.co/cloud/storage#survey

▸ Clutch 2016 Enterprise Cloud Computing Survey - https://clutch.co/cloud/resources/security-trends-in-enterprise-cloud-computing and https://clutch.co/cloud#survey

▸ EvolveIP 2016 Cloud Adoption Survey - http://www.evolveip.net/2016-survey-2?src=em&srcd=mkto

▸ Federal Cloud Computing Strategy - https://www.whitehouse.gov/sites/default/files/omb/assets/egov_docs/federal-cloud-computing-strategy.pdf

▸ Federal News Radio Executive Survey Series Cloud Survey 2016 - http://marketing.federalnewsradio.com/features-2/cloud-survey

▸ FederalTimes: “Microsoft 365 first cloud email to gain FedRAMP approval” - http://www.federaltimes.com/story/government/it/management/2014/11/21/microsoft-365-first-cloud-email-to-gain-fedramp-approval/19337833/

▸ Forbes: “Roundup Of Cloud Computing Forecasts And Market Estimates Q3 Update, 2015” - http://www.forbes.com/sites/louiscolumbus/2015/09/27/roundup-of-cloud-computing-forecasts-and-market-estimates-q3-update-2015/#5b9e67836c7a

▸ IDG 2015 Cloud Computing Survey - https://www.scribd.com/doc/290037560/2015-IDG-Enterprise-Cloud-Computing-Survey#fullscreen&from_embed

▸ Microsoft Azure Compliance - https://www.microsoft.com/en-us/trustcenter/Compliance

▸ MIT Technology Review: “Business in the Cloud” - https://www.technologyreview.com/business-report/business-in-the-cloud/download/?state=join#/join/

▸ Nasuni State of Cloud Storage 2015 - https://www.nasuni.com/resource/the-state-of-cloud-storage-in-2015/

▸ NSK Inc: “IT Consultants' Insight on Business Technology” - http://blog.nskinc.com/topic/Cloud-computing/IT-Services-Boston/7-Statistics-You-Didn-t-Know-About-Cloud-Computing

▸ Rightscale 2016 State of the Cloud Report - https://www.rightscale.com/lp/state-of-the-cloud

▸ Skyhigh Networks Cloud Adoption and Risk Report Q4 2015 - https://www.skyhighnetworks.com/cloud-security-blog/12-must-know-statistics-on-cloud-usage-in-the-enterprise/