2. Where Cloud Storage Makes Sense For The Enterprise (And Where it Doesn’t) Andrew Reichman Senior Analyst Forrester Research January 22, 2009

3. 3 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Agenda Cloud Storage Defined Current Cloud Storage Use Cases »Application as a Service »Backup/Archive »File Storage Barriers to Adoption A Look Forward

4. 4 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Cloud Storage Defined

5. 5 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Cloud Storage Places Data Outside the Walls “Cloud Storage” is defined as storage which resides in a public or private infrastructure that is external to the primary storage infrastructure, and is often shared to some extent Cloud Storage is different from Cloud computing, where a whole application lives fully or partially in the Cloud

6. 6 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Traditional Storage Infrastructure

7. 7 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Cloud Storage Infrastructure

8. 8 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Cloud Storage Use Cases

9. 9 Entire contents © 2008 Forrester Research, Inc. All rights reserved. There’s no Magic in the Cloud The need for co-location of application servers and storage does NOT change with Cloud Storage While internet bandwidth has increased, it has not done so enough to allow database applications to run in separate locations from their storage SO, this means that cloud storage has to be a part of a larger cloud delivered whole application, or focus on a storage niche that lends itself to dis-aggregation

10. 10 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Three Key Enterprise Use Cases for Cloud Storage Whole Applications Delivered via the Cloud Backup / Archive of non-Cloud Applications File Storage & Associated Services

11. 11 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Whole Applications in The Cloud Applications that are well bounded in function make sense to be delivered from the cloud Inter-relationships of data can be limited between cloud and non-cloud apps Email (i.e. gmail) or CRM (i.e. salesforce.com) make good examples of whole applications that can be delivered by the cloud Vendors focus on creating a better economy of scale in software and underlying infrastructure

12. 12 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Backup & Archive Via the Cloud BC/DR best practices require backups and archives to have an off site component Many firms need advanced BC/DR capabilities (regulatory, risk mitigation, business partner requirements, etc.) but don’t have the real estate or the expertise to build it themselves Backup/Archive as a service has developed from co-location type services to shared tenancy models with advanced purpose built architectures

13. 13 Entire contents © 2008 Forrester Research, Inc. All rights reserved. File Storage Sits Apart from App Servers Most file storage is generally loosely coupled or completely separate from application servers Users can make a direct connection to file storage systems and browse files- speed isn’t critical Enterprises with many remote workers will use remote file access anyway- the Cloud is attractive Cloud file storage can help with sharing and transferring data (i.e. Yousendit)

14. 14 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Barriers to Adoption of Cloud Storage

15. 15 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Major Barriers to Cloud Storage Include: Enterprise Conservatism Shared Tenancy Issues Contractual Issues Data Migration/Integration Issues

16. 16 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Storage Buyers are the Most Conservative In general, storage is very slow to adopt new technologies or paradigms Anything that represents added risk or the unknown will see a slow adoption curve in storage Most buyers will want to see well known peers adopt before them First movers so far are firms that can’t run their business in a traditional storage cost structure Many adopters are Web 2.0 firms with file data, free/ad supported products and limited SLAs

17. 17 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Shared Tenancy = Risk A cloud storage buyer must be willing to have their data side by side with that of a competitor Encryption and access control mechanisms must be rock solid and clearly defined to mitigate this Quality of Service is a key concern, customers worry that spikes unrelated to their business could cause disruption to performance or outages

18. 18 Entire contents © 2008 Forrester Research, Inc. All rights reserved. The Contract Conundrum For mainstream enterprises to adopt cloud storage, 2 contract elements need to improve: »Clearly defined and customer measurable SLAs »Penalties that reflect the risk of data loss Current SLAs are too vague, and cloud customers have limited ability to verify performance With relatively low fees and very high stakes at risk, it’s hard to get an SLA and penalty structure that makes sense for the enterprise

19. 19 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Data Migration and Integration When data lives in the Cloud, it can be hard to get to it, and even harder to integrate applications to it Data migration for refresh is very challenging within the walls of a data center, doing it to a cloud seems harder still Ceding control over data and moving it out of the enterprise can cut off application integration projects like information management, data warehousing etc. Does the cloud provider force users to buy into their proprietary tools, or are there many options?

20. 20 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Looking Forward Cloud storage is likely to reshape the industry in ways that traditional models struggle with Getting data management as a service is likely to provide much better economies of scale, and ease the strain of hiring experts But, significant barriers need to be resolved before the model becomes viable for mainstream companies Early wins in clearly defined use cases will start to shape the industry in years to come

21. 21 Entire contents © 2008 Forrester Research, Inc. All rights reserved. Andrew Reichman 617.613.6172 areichman@forrester.com Thank you www.forrester.com