Cloud Computing is in its infancy, but ITCandor is measuring it. In this presentation Martin Hingley sizes the UK medium-sized corporate IT market and analyses the developing 'political' issues among users and suppliers.

1. The ‘Politics’ Of Cloud
Computing
Evolving Managed Services Adoption In Medium Sized
Companies
Martin Hingley
IT Candor Limited
Email: mhingley@itcandor.com
Web Site: http://itcandor.com/
ITC Market Research Report ITCandor 2010

2. Agenda
• Some Market Sizing
• Outsourcing, Managed Services and SaaS Spending
• The Development Of Cloud Computing
• ‘Political’ Considerations
• Forecasts And Conclusions
ITC Market Research Report ITCandor 2010

3. UK Cloud Computing developments
• NGD opens a massive Cloud Computing data centre in Newport – BT
and Logica become customers
• HP opens and new air cooled data centre in Wynyard
• Centrix Software offers Workspace Discovery and Workspace iQ
• Quest Software builds monitoring and metering products
• HP, IBM and Fujitsu help with Implementation Services and SaaS
mainly for large organisations
• Citrix continues to build ‘client access’ offerings, big plans for Cloud
• DataScape Online offers self-service SaaS
• Double-Take Software offers Recovery as a Service
• Storage Online considers offering online storage
• FNZ offers Platform as a Service
• Fasthosts launches Rise SaaS for SMBs
ITC Market Research Report ITCandor 2010

4. The Effect of The Credit Crunch on UK IT
Spending Growth (£)
25% • Consumer and
2008 2009 small business
20% spending
remains positive
Consumer
15% • Medium and
Small Companies large business
spending
10%
remains negative
Large • Market
5%
Companies development is
clouded by
0% exchange rate
movements
Medium Companies
-5%
Total IT Spending
-10%
Source: ITCandor, 2010
ITC Market Research Report ITCandor 2010

5. The Declining Value of The Pound
1.0 • The massive
collapse in the
value of the
0.9
Pound
• Is nearing parity
0.8 with Euro
• Two dollars to a
0.7
£/€ pound in 2007 is
one and a half
today
0.6
• This is making IT
0.5
£/$ kit more
expensive in the
UK
0.4
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: ITCandor, 2010
ITC Market Research Report ITCandor 2010

6. Medium Company Quarterly Spending on
IT Service and Software (£m)
£1,000 • Medium sized
Implementation companies have
£900 Service 100-1k employees
£800 • IT usage varies
between advanced
£700 and non strategic
• Implementation
£600 Application Software Services is biggest
category
£500 Internet Service • Spending on
Internet
£400 Outsourcing/ Service larger
Managed Services
£300 than on
Hardware Maintenance Software as a Service
Application
£200 Software Maintenance Software
• Outsourcing/
£100 Infrastructure Software
Managed Service
Operating System and SaaS are
£0 growing fastest
2008 2009
Source: ITCandor, 2010
ITC Market Research Report ITCandor 2010

7. Medium Company Quarterly Spending on
IT Hardware (£m)
£350 • Networking is
largest category
£300 • PC is small and
Networking similar to spending
on Converged
£250
Device
PC
• Storage Systems
£200 and Servers are
Converged now the smallest
Device categories
£150
Peripheral • Hardware
spending is
£100
Storage System growing in H1
Server 2010
£50
£0
2008 2009
Source: ITCandor, 2010
ITC Market Research Report ITCandor 2010

8. The Varying Needs of Four Types of Cloud
Computer Participants
• Finance
•Maximise Value Directors also
•Enforce SLAs have to consider
•Manage Supplier data protection,
Contracts environmental and
•Balance Cap Ex
other laws
v Op Ex
Financial Director • CIOs have a
difficult task in
managing a mixed
environment
Data Center • End-users have
Software Developer lots of SaaS
Manager/CIO Cloud Computing experience as
•Infrastructure as •Internet-wide Distribution
Public/Private consumers
a Service •Scalable Deployment
•Hardware •Free Development • Software
•Management •Web Apps •Simplified SDK Developers use
•Virtualization •Self Service the evolving
•Cluster •Pay-per-Use ecosystem
•Grid •Utility Computing • These groups often
•Software as a Service compete for
End-User resources and don’t
Source: ITCandor, 2010 always talk to each
other!
ITC Market Research Report ITCandor 2010

9. Cloud Computing Supplier Participants by
Type and Example
• Lots of
OS and Middleware Outsourced Data Centre Infrastructure
Goole Java Google Microsoft development
Python VMWare AmazonAsk
Ask • Large business
Websphere Redhat NCD HP software suppliers
Citrix VMWare offer SaaS versions
Microsoft • Hosting
companies offering
Hardware Telecoms data centre space
Cisco BT and/or dedicated
Dell
Cloud Computing resources
T- Mobile
EMC Suppliers Orange • Telecoms
HP suppliers will find
Vodafone Cloud easier than
IBM NTT general IT services
Rackable
• Plenty of scope for
Sun Applications Metering/Billing ‘cross the park’
Verari Microsoft Salesforce selling to different
Salesforce SAS user types
Google Mail Fujitsu Software
Quicken Source: ITCandor, 2010
ITC Market Research Report ITCandor 2010

10. The Developing Cloud Computing and
Hosting Ecosystem
• Cloud development
ecosystem is split
hulu
Application Windows Live
into 3 camps –
Lamp, Azure and
Layer (SaaS) facebook Bing Google Apps
JAVA
php MySQL SQL Server 2008 • Offerings are split
python php
Middleware memcached
in three horizontal
IIS7 layers – IaaS,
Layer (PaaS) Apache hadoop .Net JAVA PaaS and SaaS
Linux • Can be used to
OS and/or Linux design new or
VMWare ESX HyperV
-V
-
Hypervisor ‘Cloudify’ existing
Xen corporate
(IaaS) applications
Lamp* Windows JAVA
Azure
Source: ITCandor, 2010
ITC Market Research Report ITCandor 2010

11. Virtualising Client Computing for Cloud
Computing
• Cloud Computing
and Client
Laptop Local VM Virtualisation are
highly connected
• Users want Smart
Phone access to
Desktop corporate
Streamed
applications – not
just email
• PCs can be used as
Thin Client thin clients
External Hosted
• Users want fully
functional PCs
• Citrix, Redhat,
Smart Phone Microsoft and
Internal Hosted VMWare are
leaders in client
virtualisation
Client Devices Virtual Clients
Source: ITCandor, 2010
ITC Market Research Report ITCandor 2010

12. The Pitfalls of Cloud Computing
• Cloud Computing is in its infancy – has not yet helped in the shift from
Capital to Operational Expenditure
• It is being adopted from the ‘bottom up’ – consumers and small
businesses use SaaS for social networking and office where no
technical expertise is expected
• Modifying corporate computing usually requires significant
consolidation activities first
• Data Protection, Environmental laws are often not addressed by US
developments
• Location issues are vital for Managed Services and Outsourcing success
• You can get just as locked into pay-as-you-go as other services
ITC Market Research Report ITCandor 2010

13. The ‘Politics’ Of Cloud Computing – Some
Conclusions
• The UK IT market is in recession and the failing Pound makes IT expensive
• Cloud Computing is the hottest IT subject in years
• Outsourcing, Managed Services and SaaS are small but are the fastest growing
spending areas for medium companies
• Implementation services include systems suppliers helping convert internal IT
into private Cloud
• Cloud Computing ‘politics’
– The needs of financial directors, CIOs, software developers and end-users
all differ
– Suppliers will begin to sell ‘cross the park’ to exploit differences of opinion
inside organisations
• Cloud Computing can be seen as a natural extension of Managed Services and
Outsourcing
• Client Virtualisation and Cloud Computing are linked
• Issues of security, location, responsibility and compliance need addressing
• As always it’s better to partner with companies you know and trust Internal
External
Users
(mainly)
External
Internal
Users
(mainly)
Cloud Computing
Private Public
Cloud Cloud
Martin Hingley Implementation PaaS
IT Candor Limited Consolidation
Modernisation
IaaS
SaaS
Email: mhingley@itcandor.com Virtualisation
IT Supplier
Service
…aaS
ISV
Hosting
Provider (Telco)
Web Site: http://itcandor.com/
ITC Market Research Report ITCandor 2010