Cloud Computing Overview
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Cloud computing provides on-demand access to configurable computing resources over the network. It has driven market shifts due to economics like pay-per-use and agility. While security and reliability are risks, consumers benefit from collaboration and a focus on core business strengths. The cloud computing market was worth $111 billion in 2012 and is projected to reach $131 billion in 2013, with software as a service making up nearly half of revenue. Infrastructure as a service, platform as a service, and software as a service are the main service models.
Cloud Computing Overview
- 1. Cloud Computing Samba Pedapalli 1
- 2. Change in PC computing in past decade 2
- 3. What is Cloud Computing ? “…. ubiquitous, convenient, on-demand network access to pool of configurable computing resources” - NIST 3 REF: http://pre-developer.att.com/home/learn/enablingtechnologies/The_NIST_Definition_of_Cloud_Computing.pdf
- 4. What’s driving the market shift ? 4 REF: IDC
- 5. Value for consumers Economics Better capital utilization rates Pay per use Agility & Speed Collaboration Social aspect Focus on core business strengths 5
- 6. 6 Source: http://geekandpoke.typepad.com/geekandpoke/cloud/
- 7. Risks Security ? Reliability / Service level Agreement (SLA) Vendor lock-in 7
- 8. The Demand factor 8 ref: cloudonomics.co
- 9. Revenue model - Subscription “Satisfied” Customer Renewal Down Year Year Year Payment 1 2 3 9
- 10. $111 Billion Market 2.80% 1% 5.50% Cloud Advertising Biz Process services segment 14.70% (BPaaS) Software as a Service 48% Infrastructure as a Service Cloud Management & Security Platform as a Service 28% $ 131 Billion projected for 2013 10 src: www.gartner.com/newsroom/id/2352816
- 11. Service Models Infrastructure As A Service (IaaS) Platform As A Service (PaaS) Software As A Service (SaaS) 11
- 12. M & A activity src: 12 http://www.grantthornton.com/staticfiles/GTCom/Technology/Software%20industry%20M&A%20update/Software%20- %20Fall12%20-%20FINAL.pdf
- 14. Gartner’s Hype Cycle (2012) 14
- 15. 15 Source: http://geekandpoke.typepad.com/geekandpoke/cloud/
- 16. 16
- 17. It’s the service…. ….forget the product 17
- 18. References Greylock Partners Bessemer Ventures Interesting article on costing analysis 5 C’s (committed recurring revenue, Cash flow, acquisition costs, customer life time value, churn) Cloud Economics – Check out the blog Overview of concepts. Gartner prediction on market 18
- 19. Thank You ! 19
- 20. What is Cloud Computing ? 20
- 21. Cloud Computing Back up slides 21
- 22. Revenue model (typical) Length of the contract – 3 to 5 years in SaaS market Pre-paid contract – 40% Costs: Customer Acquisition cost Customer life time value ? Recurring revenue Committed Monthly recurring revenue 22
- 23. 5 essential characteristics On-Demand self-service Broad network access Resource pooling Rapid elasticity Measured service 23
- 24. Challenges (on-premise to cloud) Culture shift Software to Service Management & Operation processes Funding model Service / interface description Politics Customization / Integration 24
- 25. Technology Drivers Commoditization of hardware and software (Open source) Faster networks Web 2.0 and beyond Mobile technologies 25
Editor's Notes
- #2: Insights, views and thoughts on Cloud Computing.
- #3: Customer computing has changed knowingly or unknowingly from software as a product to service.
- #4: Where to access, how to access and when to access data …..
- #5: Analogy: Utilities such as centralized power generation over individual power gen
- #6: Just 4 of the many benefits
- #7: So can we just outsource ?? What are the risks ?
- #8: 3 of the top risks:Security: Whole organization data is in some one’s else hand – unnerving. But SaaS providers have been able to convince their customers by being pro-active on security – encrypting data, periodic external audits etc.. The rate at which customers are embracing cloud, looks like this barrier is being overcome.Reliability: Netflix unavailable on Christmas eve. Fragmented Netflix customers’ limited leverage. But for enterprise customers, deal breaker if data is not available at right time. Vendor lock-in : with outsourcing, internal expertise is lost and regaining that expertise can be costly or impossible.Given the adoption rate, above risks have not been big time barriers for SaaS providers.
- #9: Options available based on Demand:Fixed Capacity: Either on-premise – business as usual.Fixed Capacity: Cloud. Gain benefits reviewed above.Variable Capacity: Hybrid model. Seasonal spikeThis slide adds the demand factor to the story. If demand is fixed, on-premise could be the way to go. Or if previous mentioned benefits take a precedence, cloud is the way to go. If demand is variable eg: retailers see a spike in activity – they kick off servers on the cloud to process the demand spike. This is hybrid cloud.
- #10: Renewal model. Customer renews product subscriptions.
- #11: Overall market is estimated to be $111 B in 2012 per Gartner. In 2013 this is expected to grow to 131B. This includes the cloud advertising model which to me was interesting that Gartner decided to club it with other services.
- #12: Three primary service models are IaaS – where processing power is the service. Platform where certain applications are made available on top of the processing power. Getsentreprenuers and developers to hit the road in hours over days – VCs’ love this. VC money is used to acquire better human capital and build IP.SaaS– where a fully baked software is delivered as a service.
- #13: % of Volume of SaaS acquisitions in software market has increased more than 9 times since 2009. Clear indication this industry is heating up.
- #14: Another perspective here. Enterprise value to Revenue – SaaS companies seem to be on a progressive upward trend while incumbents are on a plateau.Only 21.2% of the acquiring companies were SaaS companies. Which means incumbents see this glaring change and are going big in acquisitions. SAP the largest vendor in enterprise software, has acquired 9 companies in the past 2 years. 2 deals were worth $7.7BIts competitor, Oracle, acquired 20 companies amongst which the two major ones were in SaaS space worth $3.4 BIDC expects the market the compounded market growth rate to be 24% from $23 B to $67 B
- #15: This slide from Gartner shows different flavors or applications of cloud computing. One term you would see widely used is BigData. Big Data is primarily managing the volumes of data we continue to create on line – whether consumer based or in enterprises. The problem with this term is it loosely used, atleast from my perspective. Challenge is identifying solutions / answers to customers using BigData.
- #17: Categorizes SaaS companies across various industry segments.
- #18: In conclusion – the shift is software delivered as a service not as a product. The whole IT industry will be impacted by this change in a way internet had an impact.