TBR’s Cloud Business Quarterly

TBR

TECHNOLOGY BUSINESS RESEARCH, INC.

TBR’s Cloud Business QuarterlySM

Research Highlights and OutlookTechnology Business Research (TBR) Quarterly Webinar Series

April 17, 2012

TBR

2 TBR Quarterly Webinar Series | 4.17.12 | www.tbri.com | ©2012 Technology Business Research Inc.

Cloud Business Quarterly Research Highlights and Outlook: Webinar Presenters

Jillian MirandiAnalyst, Software [email protected] @jillianNotes

Stuart WilliamsSenior Analyst, TBR’s Software [email protected] @Allanktbr

TBR


• We covered 37 vendors in our Public Cloud Market Landscape, and 9 vendors in our quarterly cloud reports

• TBR reports are unique due to their deep holistic analysis of leading vendor businesses.

• Financial modeling and TBR insights help customers build a better understanding of vendor business models.

• TBR reports and webinars are designed to be responsive to client timelines, to be clear and concise and to provide insights across multiple layers of an organization.

• TBR’s strategic assessment provides an impartial reality check on a vendor’s progress in its strategic objectives.

Cloud Business Quarterly Research Highlights and Outlook: Webinar Overview

TBR’s Cloud Business Quarterly (CLBQ) reports deliver unique insight and value through in-depth analysis in a concise, consumable format

Clients are gaining advantages and are better understanding revenue opportunities through not only our reports, but also through their personal relationships with TBR.

TBR


The public cloud market is expanding at a 29% CAGR and will hit $83 billion in 2015.

The social enterprise is the next wave of cloud.

Cloud is a gold rush, attracting entrants from all backgrounds.

CLBQ 4Q11 Research Highlights and 2012 Outlook

Three Key Points

The public cloud expansion continues as companies take advantage of “the more you offer, the more you make” opportunity

1.

2.

3.

TBR


Driven by strong continuing adoption in the SaaS market, followed by IaaS and PaaS, the addressable market for public cloud is expanding at a rapid pace.

Nearly three in four businesses are either using or planning to purchase public cloud services across the cloud stack in 2012.

The public cloud market is expanding at a 29% CAGR and will hit $83 billion in 2015Point 1: Adoption Rates for Public Cloud


TBR


$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2010 2011 Est 2012 Est 2013 Est. 2014 Est. 2015

Estimated Public Cloud RevenueAggregated TBR Public Cloud Landscape Revenue and Growth

IaaS PaaS SaaSCalendar Quarter

TBR

Estim

ated

Pub

lic C

loud

Reve

nue

(in $

Bill

ions

)

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Point 1: Adoption Rates for Public Cloud

54%

26%

20%

N=1,496

Adopted Public Cloud

Not Considering Public Cloud

Non-adopters Considering Public Cloud

SaaS69%

IaaS53%

PaaS50%

Greenfield opportunity

29% CAGR

$43 B

$83 B

$23 B

TBR research shows public cloud adoption is increasing and will significantly move the growth needle across the vendor landscape

TBR

Source: TBR’s Winter 2012 Cloud Adoption Study

Source: TBR’s Public Cloud Market Landscape

CLBQ 4Q11 Research Highlights : Key Trends

TBR


Cloud has enabled the social enterprise through increased connectivity, collaboration and access to information and applications from anywhere at any time.

Salesforce.com is the frontrunner with its Social Enterprise solutions package, but traditional vendors are quickly entering the nascent market through acquisitions.

The social enterprise is the next wave of cloud

Point 2: Purchasing Trends


TBR


Point 2: Purchasing Trends outlined in TBR’s 4Q11 Reports

The first wave of change is around cloud solutions, and it is far from over; the next wave will be cloud-enabled social enterprise solutions

Salesforce.com:

Salesforce.com acquired social HRM solution Rypple, and traditional vendors SAP and Oracle acquired cloud-based social enterprise vendors to jump-start their entrance into market.

Microsoft:

Microsoft is expanding into the social enterprise through its cloud and collaborative versions of Dynamics CRM, Office 365 and Lync.

Google:

Google Apps, along with recently released Google+, cater to the social enterprise through increased collaboration and a connective social network.


TBR


The public cloud market continues to see new entrants from different business backgrounds (pure play, traditional software, hardware, telco) that are leveraging existing infrastructure and customer bases to rapidly gain share.

Point 3: Entrants span various backgrounds


Cloud is a gold rush, attracting entrants from all backgrounds

TBR


SalesforceIntuit

AT&T

HP

CA Technologies

CitrixGoogle

NetSuite

Rackspace

Amazon AWS

Redhat

Microsoft

Verizon + Terremark

VMware

Symantec

BMC

Informatica

Cisco

CenturyLink (Savvis)

Zoho

SAP

IBM

Oracle

Dimension Data (OpSource)

Dell

EnomalyWorkday

ServiceNow

Fujitsu

EMC

Equinix

GoGrid

Wipro

CSC

Joyent

0%

20%

40%

60%

80%

100%

120%

140%

-10% 10% 30% 50% 70% 90% 110%

Year

-to-

year

Pub

lic C

loud

Rev

enue

Gro

wth

Year-to-year Corporate Revenue Growth

4Q11 Estimated Public Cloud Revenue Growth vs. Corporate Revenue Growth TBR

Cloud represents a market gold rush and high growth is seen among vendors coming from all backgrounds

*TWC and Box are off the chart due to 1800 and 179% growth, respectivelySOURCE: TBR ESTIMATES, COMPANY DATA

Traditional hardware and software vendors

Pure play cloud vendors

Telco/Hosting vendors

Professional services vendors



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Cloud vendors are all seeing cloud revenue growth, but operating income remains low as cloud businesses ramp


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4Q10 1Q11 2Q11 3Q11 4Q11 Est.1Q12

CY2010 CY 2011 Est.CY2012

Ope

ratin

g In

com

e (In

$ M

illio

ns)

Goog

le C

loud

Rev

nue

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GOOGLE PAID-FOR CLOUD REVENUE, OPERATING INCOME AND GROWTH

Google Cloud Revenue Operating Income

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SOURCE: TBR AND GOOGLE

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4Q10 1Q11 2Q11 3Q11 4Q11

In $

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MICROSOFT CLOUD REVENUE AND OPERATING INCOME

Microsoft Cloud Revenue Microsoft Cloud Operating Income

SOURCE: TBR ESTIMATES AND MICROSOFT

TBR

29.0%

33.8%

38.4%

36.2%

38.3%

31.5%

26.9%

36.8%

21.7%

-10%

0%

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4Q10 1Q11 2Q11 3Q11 4Q11 1Q12Est.

2010 2011 2012Est.

Net

Rev

enue

, In

$ Th

ousa

nds

SALESFORCE.COM NET REVENUE, GROWTH, OPERATING MARGIN AND PROJECTIONS

Revenue Revenue Growth Year-to-year Operating MarginNOTE: Annual revenue and projections are for calendar 2010-2012, respectively.SOURCE: SALESFORCE.COM AND TBR

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Net

Rev

enue

Gro

wth

Yea

r-to

-yea

r

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3Q10 4Q10 1Q11 2Q11 3Q11

In $

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IBM CLOUD REVENUE AND OPERATING INCOME

IBM Cloud Revenue IBM Cloud Operating IncomeSOURCE: TBR ESTIMATES AND IBM

TBR


TBR


The public cloud market is expanding at a 29% CAGR and will hit $83 billion in 2015.

The social enterprise is the next wave of cloud.

Cloud is a gold rush, attracting entrants from all backgrounds.


Three Key Points

The cloud market will begin to mature in 2012 based on wider, broader and deeper customer adoption

1.

2.

3.

TBR


Ongoing Research Quarterly Topics Value PropositionPublic Cloud Market LandscapePrivate / Hybrid Cloud Purchasing and Adoption StudyCompany Cloud Reports:

• IBM• Microsoft• Oracle• ServiceNow• Google• Amazon Web

Services• Salesforce.com• Rackspace• Verizon

(Terremark)

• With a rapidly expanding addressable market, illustrate trends behind traditional and pure-play cloud vendors’ ability to drive growth through public cloud adoption.

• Highlight vendors’ best practices in utilizing public cloud to show cloud-readiness for core products, positioning companies for growth via install base cross-selling.

• Discuss traditional enterprise vendors’ avenues to success with private and hybrid clouds – partnerships, acquisitions, portfolio reinventions.

• Outline traditional and pure-play vendors’ best practices for capitalizing on customers’ cloud deployment desires while circumventing cloud security fears.

• Outline ways in which pure-play cloud vendors are expanding solutions into new markets, and how traditional vendors can partner to win.

• Highlight the growth opportunities for enterprise vendors in moving down-market with SaaS capabilities.

• Illustrate the long-term opportunity for vendors that

can deliver developer-focused PaaS platforms to market.

• Show opportunities within IaaS market for vendors that

can fine-tune offerings to address enterprise requirements and hybrid deployment.

Infrastructure as a Service (IaaS)

Private/Hybrid Deployments

Software as a Service (SaaS)

Platform as a Service (PaaS)

Public Deployments

Successful cloud computing vendors will offer innovative, secure products in 2012 – moving beyond cloud versions of core solutions

TBR Cloud Practice Research Agenda 1Q12 – Cloud Computing

TBR


Questions?

TBR


For additional information, please contact:

Stuart Williams James McIlroyDirector, Software Practice Vice President, [email protected] [email protected]

TBR

TECHNOLOGY BUSINESS RESEARCH, INC.

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