The document discusses how the software industry is at a crossroads due to economic pressures forcing cuts to IT budgets. It predicts that chief information officers will increasingly demand software as a service (SaaS) models from vendors to reduce costs. For vendors to provide competitive SaaS offerings, they will need to build virtual private clouds that span legacy and new applications across on-premise and cloud infrastructures. This transition will significantly change the economics of the software industry.
7. … and will handover
the entire IT to a
vendor with a pay-
per-use model
to reduce the
total cost of IT
ownership. 7
8. Welcome to
Software As A Service
This is not about
technology but a business
8
imperative.
Buyers will force the
adoption of Software as a
Service even before the
infrastructure is ready. 8
9. To provide Software As a
Service, vendors will demand:
-- long-term commitments
-- more control over how
the environment will be
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managed.
… and at the right
price they will get it.
9
10. To provide this service at
the price point being
demanded, vendors must
build Virtual Private
Clouds that span legacy
applications and new
technology and are
deployed on premise and
in the cloud. 10
11. Enterprise Virtual
Private Cloud will be
Private, secure and firewalled
Some components on premise and
11
others will be distributed across the
cloud.
Centrally managed
One fine-grained pay-per-use bill
11
12. Infrastructure for Virtual Private
Clouds must be super
efficient.
Must support:
12
Multi-tenancy
Virtualization
Security
Remote Monitoring
Handle Legacy Applications 12
13. manage relationships with
enterprises and ensure
continuity of business processes
including legacy systems.
13
own, create and
manage high
performance cloud
environments.
13
14. own, create and manage high
performance cloud
environments.
14
manage relationships with
enterprises and ensure
continuity of business
processes including legacy
systems.
14
15. manage relationships with
enterprises and ensure
continuity of business processes
including legacy systems.
15
own, create and
manage high
performance cloud
environments.
15
16. System Integrators who
understand enterprise
processes with significant wallet
share and good relationships
with CIOs are candidate Virtual
16
Private Cloud Operators
16
18. Three Level Eco-System
CIO – the ultimate buyer of IT.
18
Virtual Private Cloud Operators
Cloud Operators
18
19. Enterprise Data will be
an integral part of the
Virtual Private Cloud*
19
* And not part of the application.
Data Integration challenges will force
CIOs to accept standardization of
data, processes and the application 19
20. The Cloud Operator
and the Virtual
Private Cloud
Operator are not
ready to provide
20
the service at the
price that the
Enterprises are
demanding today. 20
23. Software Vendors can be classified as
• Infrastructure software providers.
They provide software that is part
of the cloud infrastructure.
• Application software providers.
23
They provide software that runs on
the cloud.
23
25. Since data is part
of the cloud
infrastructure
and a not part of
the application,
25
replacement of
software
components will
be easier. 25
26. Who will buy
Application Software?
CIO: Directly for
the Enterprise
26
or
Virtual Private
Cloud Operator
26
27. In both scenarios the Application Software
Vendors have limited lock-in for their
products.
Application Software must be built
• Quickly
27
• Upgraded continuously
• Have new features otherwise be replaced
• Componentization and Service Oriented
Architectures will be standard design
philosophies.
27
29. The economics of the
new software industry
will be very different.
Vendors will provide
software with regular
29
(monthly) payments
being made depending
on how the product is
used.
29
30. With this model, we may expect the
following changes to the life of the
software vendors:
The need to deploy
faster
The need to upgrade
30
frequently – if you
cannot, you run the
risk of getting replaced
Operate at a lower cost
base 30
31. The market will
change very
fast. CEOs want
to cut cost now!
31
Once the
change
begins, it will
become a
31
32. Software vendors must invest
now to be ready for this new
world or become extinct.
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