2. HOW BIG IS THE CLOUD? #apc2010 @philgoldie
PHILIP GOLDIE, Director, Server & Tools
OSCAR TRIMBOLI, Director, Information Worker
LINUS LAI, Associate Director, IDC
@oscartr

3. …how big is the opportunity?
…where is the opportunity?
…how do I capture the opportunity?

4. The Cloud and You: New Delivery Models Bring New Opportunities
Linus Lai
IDC Australia

5. Agenda Shifting Business Goals Impact Technology Goals
The Cloud: What’s It All About, & Why Should I care?
Leveraging Cloud Computing To Benefit Your Organization

6. Shifting Business Goals Impact Technology Goals
The Cloud: What’s It All About, & Why Should I care?
Leveraging Cloud Computing To Benefit Your Organization

7. The “New Normal”
Q. Prioritize the following business goals as they relate to your organization by allocating 100 points among them. The more points you allocate, the more important the business goal.
Business priorities are quickly returning to pre-recession status
Refocusing on “doing the right thing” again, not the least expensive
For customers
For shareholders
For competitive advantage
Efficiency still matters, but not if it impacts business performance
Availability
Flexibility
Lets start by talking about this “new normal” IDC has tracked senior business and IT executive sentiments and priorities for a number of years. Many of our ongoing surveys pose the question shown above, that is – allocate 100 points across your top priority business goals.
Pre-global economic melt-down we generally saw cost control, customer satisfaction and revenue growth as fairly equal top priorities. However, in late 2008 through mid 2009, it was another story as priorities around cost reduction squeezed out most other priorities. As of January 2010, we started to see the pendulum swing back to a more traditional balanced distribution that rates customer satisfaction almost equally with cost cutting, and also displays a renewed emphasis on quality, increasing market share and time to market.
Source: IDC Server Virtualization MCS 2007, 2008, 2009; IDC Datacenter and Cloud Survey 2010

8. Recovery and Transformation
Key Market Transformations
Telecom – fiber, 3G/4G wireless, converged IP delivery, new distribution models
IT – market expansion through disruptive Cloud model, driving re-architecture of vendor models, offerings, identities
Ascendance of mobile devices – and apps – challenging primacy of the PC
Shift of customer “design point” toward SMB/consumer, emerging markets
In particular as the recovery takes hold we are seeing structural transformation across a wide range of information and communications industries – and these are changes that have ramifications for virtually every industry and business.
In telecommunications, it's about the aggressive evolution the industry's been on for the past several years: the shift to fiber landlines, higher-speed wireless broadband, converged IP delivery platforms, expansion of new distribution models and expansion into more value-added services. E.g the cloud % of regional/local telcos will be launching some form of cloud service
In IT, the biggest transformations are around the disruptive emergence of the cloud services model — a model that is both market expanding and challenging. The cloud-driven transformation of the IT market is necessitating the restructuring of vendors' offerings, market footprints, and business models. It is also driving private data centers to become leaner, meaner and more efficient
For telecommunications and IT, it's also about the ascendance of mobile devices, not only as access devices but as software and solution platforms, challenging — for the first time in over two decades — the primacy of the PC.
It's also about the changing face of the customer, especially in the enterprise markets — with the "design point" for the market continuing to shift from large enterprises in developed markets to small and medium-sized enterprises in high-growth emerging markets. And it's about the growing impact of consumers on the entire market.
Taken together, this emergence of a highly connected, service centric, mobile, on demand consumer oriented world is beginning to reshape the way that businesses interact with their customers via social media and mobile interfaces as much as it is changing the way providers of many types of products and services differentiate their offerings – using value-add, information rich services and relationships to deliver value and it is providing a wide range of new vectors on which to base new product and service development

9. The Cloud: What’s All About, & Why Should I care?
Shifting Business Goals Impact Technology Goals
The Cloud: What’s All About, & Why Should I care?
Leveraging Cloud Computing To Benefit Your Organization

10. What is Cloud Computing Today?
The Future
Cloud services are consumer and business products, services and solutions delivered and consumed in real-time over the Internet
They have the following key attributes
Shared
Self-service
Elastic
Usage-based pricing
High Security Cloud
High Availability Cloud
Multi Purpose Clouds
Today
Test & Dev Cloud
HPC
Cloud
Comms Cloud
Low Cost
Cloud

11. Cloud Market Will Win More of Australia ICT Spend
Proportion of total
9.4%
AUD million
Cloud services will not replace traditional delivery models in all situations
Though cloud is not a large part of the overall spend, it’s growing much faster
This rapid growth is attractive & causing new entrants to emerge, and non-traditional IT vendors to pay attention
The age of influence for the product vendors is waning
22.5%
5.5%
CAGR growth to 2014
* DC spend is categorised by server/storage hardware and software
2009 IDC Directions

12. Uncertainty About Cloud is Dissolving
In 12 months, cynicism about cloud computing has nearly disappeared
Clear that cloud computing alternatives will be considered for application upgrade and replacement
Source: IDC Cloud Computing Survey, April 2010 (N=600 in Aust, Korea, India, S’pore, PRC & HK)

13. Customer Focus on Private Clouds
2011 will be a big year for "private clouds"…:
Why?
Continued concerns about cloud security, availability and performance
Ongoing drive to maximize return on existing IT assets
2010 has been a big year for the announcement of "private cloud" offerings from virtually all major IT suppliers
Clouds typically package infrastructure, platforms and applications together so…
Private cloud announcements will drive many strategic partnerships, joint ventures and acquisitions/mergers.

14. Workloads in the Cloud - Australia

15. Not All Applications are Suitable
Readiness Factor
Low
High
Where to Start?
Storage as a Service
Backup/Restore Solutions
Information archival
Data intensive workloads
Established packaged offerings
Collaboration
Batch processing
Pre-production systems
Software development
Test
Sensitive data
Employee Information
Medical Records
3rd party software which:
Does not have a virtualization or Cloud aware licensing strategy
Chargeback or utilization not enabled
Requires Mass Customization
High auditability & accountability
Subject to Sarbanes-Oxley
IFRS
JSOX 15 15

16. Mapping the Journey: Private Cloud Adoption Rates
A workload focus allows a cloud strategy to be built
Consider the Cloud as an extension of your sourcing strategy, not a technology
Building IT services in the Cloud is a long journey, comprised of many steps
Honest appraisal may reveal that enterprises cannot complete the journey on your own
Selective use of public cloud services, external private clouds and cloud appliances along with existing delivery models will become the norm by 2015

17. Leveraging Cloud Computing To Benefit Your Organization
Shifting Business Goals Impact Technology Goals
The Cloud: What’s All About, & Why Should I care?
Leveraging Cloud Computing To Benefit Your Organization

18. Impact of the Cloud The Channel Viewpoint
Do you view cloud computing as:
The majority of channels view the cloud as an interesting emerging model – and realize that it is redefining the channel ecosystem and their business model. Importantly, 1 in 2 see it as an opportunity.
Source: IDC PartnerConnect Quick Poll (April 2010)

19. The Move Towards Services Impact of the Cloud
Do you currently/plan to offer cloud computing professional or consulting services?
Cloud is a highly consultative engagement with high professional services attach and it promotes channel transition to services oriented business model.
Source: IDC PartnerConnect Quick Poll (April 2010)

20. Channel Partners in Asia/Pacific IDC Partner Segmentation Model

21. Private Cloud Implications What Activities will End-Users struggle with?
Understanding if current Architecture (Infrastructure and Applications) is ready for Private/Hybrid Cloud Migrating to a Cloud Architecture Securing Converged IT Department Skill Sets Defining Provisioning Policies when Migrating to Private Cloud Defining Policies for Deploying Workloads in a Hybrid Environment Charging Line of Business for Virtual Assets

22. Cloud Implications Opportunities Require a New Mix of Skill Sets
Readiness Assessment Services
Datacenter Assessments
Security Assessments
Application Virtualization Assessments
Cloud Strategy Development
Cloud Roadmap Development
Infrastructure Virtualization Strategy and Architecture
Application Sourcing Strategies
Implementation & Transformation Services
Infrastructure Virtualization Migration Services
Application Virtualization Services
Automation
Service Integration
Security and BCDR
Change Management
Policy Definition
Governance
Billing
Support
Multi Vendor Support

23. Potential Go-to-Market Model Blended Consulting & Integration Services
Access to Vendor/Partner Developed Knowledge Base
A number of product (h/w & s/w) vendors are building out consulting capabilities to get their brand in front of the CIO
However, the right skills are in short supply, so partners can and will play an important role
Go-to-market conflict needs to mitigated and customer demand will be critical
Sub-contracted
Partners
Vendor
Service Delivery
Full Service Enabled Partners
Vendor Account Management
Customer

24. Adapt or Vanish: Hosting and Managed Infrastructure Services
Both hosting and managed infrastructure services remain viable business models,
However, it will be essential to transition delivery models to use cloud computing
The profitability of managed infrastructure offerings will rapidly erode as new players enter the market with cloud-based models
The hosting business is being transformed by cloud computing, new entrants can offer attractive new services and the market continues to evolve.
Cloud impacts the economics of model of hosting in key ways:
more difficult capacity management and potentially lower returns on invested capital;
challenges in analyzing deal profitability and a shift in how to achieve good margins in managed hosting;
uncertain software licensing costs; and
increased unpredictability of revenue.
Service providers must determine how to meet the new technical and business challenges, identify the products that can be sold now, market successfully to early adopters, and create a foundation for future products and mainstream adoption.
New offerings are emerging to compete with traditional hosting services, eg: utility hosting, virtual data center hosting, cloud hosting, and platform as a service (PaaS).
The initial challenges of cloud evolution are centered on installation and provisioning. These are business challenges, not just technical challenges, requiring process and system integration across the service provider organization.
The early adopters of cloud infrastructure services are existing hosting customers, Web 2.0 startups, research organizations and Type "A" enterprises. Mainstream adoption will require decreasing the real and perceived risks of moving operations into the cloud.
Recommendations
Focus on fully automating sales quotes and provisioning, and driving down quote and installation times. Immediately offer utility hosting. Even if you are not prepared to offer a virtualized platform, you must offer flexible pricing, or you will be at a severe competitive disadvantage.
If you do not have virtualization expertise, consider acquiring a small provider of cloud hosting services with strong engineering expertise and tools for managing a shared, virtualized platform.
Include complementary network services that enhance remotely hosted services, such as WAN optimization or an application delivery network.
2009 IDC Directions

25. Channel Partners in Asia/Pacific IDC Partner Segmentation Model

26. Potential Go-to-Market Model Partnering to Deliver Applications via the Cloud
Locally Delivered Software as a Service
Cloud Datacenter Providers, Telcos, Larger SIs with Cloud Datacenter Resources
Local ISVs
Provision of a Virtualized Infrastructure for Delivery along with Customer Billing Capabilities
International ISVs (e.g. SAP)
Platform as a Service Players (e.g. Force.com and Azure)
Internationally Delivered Software as a Service
Provision of a Plug and Play Cloud Infrastructure along with a Development Platform
With Traditional On-Premise Licensing

27. Channel Partners in Asia/Pacific IDC Partner Segmentation Model

28. Three Market Models for Reselling a Public Cloud Service…
Q. How would you prefer to be compensated for reselling the cloud service from a cloud provider?
Referral
One time referral fee paid to reseller and distributor
Annuity
A.k.a. pass through; recurring revenue
May include renewals
May include tiered programs (basic, gold, platinum, etc.)
White label
Allows partner to resell cloud service under their own brand name
Partner can add cloud capabilities to their other solutions and service offerings
Pass through business model; partner gets X% gross margin
Service delivered by cloud provider on cloud provider’s infrastructure
Partner does first level support
Simple Referral fees are less popular, but not out of the question
Source: IDC PartnerConnect Quick Poll (April 2010)

29. Positioning Cloud Resale for Your Partners
Pros
Cons
Ease of doing business
Low partner investment and risk
Not an annuity, no recurring revenue
Partner less visible in customer’s cloud planning
Process intensive in two-tier model
Referral Program
Well understood business model
Annuity type recurring revenue
Partner maintains customer relationship
Cloud provider must manage for channel conflict
Low margin business
Will cloud providers see value of distributors
Traditional VAR/ Reseller Program
Quick entry into cloud provider market
Easy to integrate cloud offerings into other partner solutions
Partner owns the cloud brand
Partner assumes more risk
Tech support model complex
White Label Program

30. Essential Guidance for Partners Questions to be Addressed
Private Cloud:
Have you got the right in-house skills?
Are vendors providing incentives & training for partners to develop specific skill-sets for the private cloud?
Are you able to leverage any productized professional services through from vendors to address private cloud type of requirements?
Do you have reasonable GTM conflict sufficiently addressed from vendors as you build out your own consulting capabilities?
Public Cloud:
How are you drafting commercial agreements with particular focus on SLAs?
How are you communicating your value proposition over going direct to the vendor to your customers?
What training and education are you receiving on the public cloud?
What about new consulting and integration skill-sets?
Are you involved in testing new partner programs to resell public cloud services?

31. Questions? If you have additional questions, please contact me at:
Linus Lai   

32. $AUD 1,622m CAGR 5.3% $AUD 70m CAGR 31.3% $AUD 274m CAGR 15%
SaaS
$AUD 1,622m
CAGR 5.3%
$AUD 70m
CAGR 31.3%
$AUD 274m
CAGR 15%
PaaS
$AUD 1,445m
CAGR 7.5%
$AUD 121m
CAGR 58%
$AUD 128m
CAGR 36%
DEFINTIONS
All dollars expressed in AUD for 2010 and Cumulative Annual Growth References 2014
IDC Source Worldwide and Regional Public IT Cloud Services Forecast IDC # June 2010
IDC Source Australia Cloud Services Forecast Analysis IDC # #AU S July 2010 CAGR%
Exchange Rate AUD/USD 0.90
IDC definition Secondary Market Segments and SaaS, PaaS, Iaas taxomony
AaaS = SaaS
Collaborative Applications, Content Applications, Enterprise Resource Management Applications, Supply Chain Management Applications, Operations & Manufacturing Applications, Engineering Applications, Customer Relationship Management Applications, Application Management, Hosted Application Management
PaaS
Application Development Software, Application Server Middleware, Data Access, Analysis, and Delivery, Information & Data Management, Integration & Process Automation Middleware, Other Application Dev and Deployment, Quality & Life-Cycle Tools, Enterprise Portals
IaaS
System and Network Management Software, Security Software, Storage Software, System Software, Servers, Storage, Networks, Clients, Hosted Infrastructure Services
IaaS
$AUD 1,350m
CAGR 6.2%
$AUD 97m
CAGR 44%
$AUD 54m
CAGR 30%
SOURCE: IDC
ON PREMISE
HOSTED
PUBLIC

33. Wednesday September 1 Title Time Room Presenters
Microsoft Cloud Strategy 101
9:45
Arena 1B
Gianpaolo Carraro
Influence of the Cloud on the Channel: How can Partners prepare themselves?
11:00
Room 8
Ted Keating
(Cloud Consultant)
Successful Selling in the Cloud (Part 1)
12:00
Steve Iatropoulos & Partners
Cloudy With A Chance Of Virtualisation
Jason Jacobs & Phillip Duff
Successful Selling in the Cloud: Winning with BPOS (Part 2)
13:45
Brian Holder & Partners
Microsoft Dynamics CRM 2011 & the Cloud
14:45
Room 7
Ross Dembecki & Craig Steere
How to Sell in the Cloud with Telstra
Stephen Pech (Telstra) & Partners
Cloud Services Partner Panel: Partner perspectives and best practices
16:00
Kathryn Saducas, Chris Sharp & Partner Panel
Promote the upcoming cloud sessions if relevant as a call to action

34. Thursday September 2 Title Time Room Presenters
Microsoft Technology Vision for Hosting and Service Providers
8:45
Room 8
Phil Meyer
Enabling Private Clouds
9:45
Phil Meyer & Phil Goldie
Creating a residual income on-premise and in the cloud
Arena 1A
Brad Clarke
Deploying BPOS in Customer Environments
11:00
Steve Iatropoulos, Vajira Weerakesera & Nick Beaugeard (HubOne)
Managing risk and security in the cloud: an overview of Microsoft best practice
12:00
Stuart Strathdee
Private Cloud For The Public Sector
13:45
Room 5
Greg Stone, Philip Goldie
Land the Cloud Sale and delight your Customers
Renee Gamble, Craig Martyn, Yvette Sutton, Phil Meyer & Kathryn Saducas
Executive Panel – Q&A with Tracey Fellows and other Microsoft executives
14:45
Arena 1B
Tracey Fellows, Evan Williams, Gianpaolo Carraro, Gary Cox, George Stavrakakis
Promote the upcoming cloud sessions if relevant as a call to action

35. the cloud #apc2010…
attend the cloud track sessions
sign up today for 250 internal users BPOS at the GPS booth
Start the Azure conversation