Is South Africa behind the enterprise cloud curve?

4 July 2013
Cloud Computing – Are you behind the curve?
Brian Pinnock
Head of Product Strategy and Innovation

2© Copyright 2010 Internet Solutions 4 July 2013
Cloud isn’t new anymore
2006 1999

Cloud definitions
Reference: National Institute of Standards and Technology (2012), Africa Analysis, DCSRM
Personal
Cloud
On-demand
Self service
Network access
Resource pooling
Rapid elasticity
Measured service

Agenda
Is Enterprise Cloud inevitable?
Where is the curve?
Where is the curve in SA?
Catching up to the curve

Is Enterprise Cloud inevitable?

Underlying macro trends
Reference: Nicholas Carr | The Big Switch 2006

Similar patterns - electrification
Steam and water
Electricity
Self generation
Utility power

Similar patterns - electrification
Networks
Standards (AC/DC)
Economies of scale
Competitive disadvantage
95% utility power

Why now?
100 years later
it’s IT’s turn!
Mainframe
Client/server
Cloud
Moore’s Law
Grove’s Law

World wide computer
“When the network becomes
as fast as the processor,
the computer hollows out and
spreads across the network”
- Eric Schmidt, 1993

“Most of our needs are more sophisticated”
Source: Gartner 2012
Lower app cost
Criticalityoftheapplication
Higher app cost
70% of
Enterprise IT
budget
30% of Enterprise IT budget
Public Cloud computing
sweet spot

A classic disruptive technology
Source: Clayton Christensen: Innovator’s Dilemma (1997, 2011)
Time
Performance
Performance demanded at
the high end of the market
Performance demanded at
the low end of the market

Past the peak of inflated expectations?
Source: Google Trends (2012)
“Cloud computing”
0
20
40
60
80
100 2005
2006
2007
2008
2009
2010
2011
2012

Gartner Hype Cycle for Cloud

• Virtualisation • Big data
• Cloud advertising
• Cloud computing
• Community Cloud
• Platform as a Service
• DevOps
• Application PaaS
• Cloud BPM
• Cloud management platforms
• Cloud security and risk standards
• Cloud/web platforms
• Cloud-bursting
• Cloud optimised application design
• Elastic multi-tenancy
• Enhanced network delivery
• Infrastructure as a Service (IaaS)
• Personal Cloud
• Private Cloud computing
• Cloud application
development services
• Cloud parallel processing
• Cloud services brokerage
• Hybrid IT
• Cloud email
• Database platform as a Service (dbPaaS)
• IaaS + Middleware
• Private platform as a Service
• Public Cloud storage
• Software as a Service (SaaS)
• BPaaS
• Cloud collaboration
services
• MDM solutions in the
Cloud
• Sales force automation
SaaS
• Dedicated email service • Browser client OS
stress | plan | relax | ignore
less than 2 years 2 to 5 years 5 to 10 years more than 10 years
stress plan relax ignore
transformational
high
moderate
low

Predicted global Cloud market
Source: Forrester 2012
0
50
100
150
200
250
300
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Revenue($bn)
Predicted

What the 2012 surveys are saying
Source: Symantic (2012), IDC (2012), Dimensional Research (2012)
94%
Enterprise at least
discussing Cloud
58%
Cloud met compliance
requirements
40%
Enterprises adopting
hybrid Cloud platforms
51%
Cloud offered greater
competitive advantage
69%
Enterprises say
Private is top choice
25%
Rogue Cloud
is more frequent

Cloud has gone mainstream…
…but adoption is in relatively early stages
Source: Everest Global (2013)
20%
23%
11%
18%
10%
5%
36%
22%
23%
26%
27%
10%
27%
27%
36%
26%
25%
28%
17%
28%
30%
31%
38%
57%
0% 20% 40% 60%
Hybrid cloud (IaaS)
Business process as a Service (BPaaS)
Private cloud (IaaS)
Public cloud (IaaS)
Platform as a Service (PaaS)
Software as a Service (SaaS)
Enterprise Cloud adoption by Cloud layer
Already adopted Adopt in near future
Adopt in distant future No plans to adopt
48%
34%
18%
Enterprise IaaS adoption plans
Plan to implement cloud infrastructure
Already have cloud infrastructure
No plans for cloud infrastructure

The reason we’re at an early stage is that there are still
many obstacles
Capacity
Security
Compliance
Reliability
Lock-in
Skills
Application profile
Standards

SA interest (not technology) is behind the curve
Source: Google Trends (2012)
Cloud computing IaaS SaaS PaaS
0
20
40
60
80
100
2005 2007 2009 2011 Average

SA data centre adoption trends
Source: Frost & Sullivan 2012
Low
High
Adoptionrate
Introduction Growth Maturity Decline
Cloud storage, virtual server and
desktop, remote backup and hosted
exchange
are promising service segments as
traditional product lines are maturing
Cloud
storage
Virtual
desktop
SaaS
Virtual
server
Web hosting
WAN
Managed servers LAN
Hosted enterprise security
Remote backup
Hosted managed backup
DR
Basic
hosting

Data centre space by region
Source: Africa Analysis (2011)
71%
27%

Predicted data centre space in SA to 2016
Core DC Services: All except ‘Other’ Source: Africa Analysis (2011)
Cooling
Power
Space
0
10
20
30
40
50
2009 2010 2011 2012 2013 2014 2015 2016
Space(thousandm²)
Core DC services

Future SA data centre revenues?
• Virtualisation solutions are a
key technology trend as they
offer significant efficiencies
and cost savings to
companies of all sizes
• As a result, SaaS, virtual
desktop and virtual server are
expected to have the highest
growth rates to 2016
• The importance of core
services to overall data centre
revenues will decline by
2016, as these services also
become more commoditised
0 200 400 600 800 1000
Basic hosting
Cloud storage
Disaster recovery
Hosted enterprise security
Hosted managed backup
LAN
Managed servers
Remote backup
SaaS
Virtual desktop
Virtual server
Web hosting
2010 2016
SaaS uptake
will be driven by
hosted
exchange, CRM and
UC
Cloud storage
is a small
sub-product of
Cloud-based services
CAGR
8%
13%
30%
23%
10%
8%
2%
8%
10%
5%
12%
5%
Virtualisation
SaaS

Financial sector Retail Manufacturing
Cloud adoption by Sector in SA
Low barrier Medium barrier High barrier
Managed servers
SaaS
Virtualisation
Basic hosting
IaaS

Total fibre market: route km 2011-2016
Source: BMI
0
4,000
8,000
12,000
16,000
2011 2012 2013 2014 2015 2016
FibreCo Co-build Telkom (new build) Telkom (maintenance)
Broadband Infraco Neotel Metro Municipalities Provincial governments
Open access metro build FTTH

The expected journey to Cloud?
Hybrid
Public
Private
Consolidation
Automation
Virtualisation

Ensuring enterprise Cloud adoption
Customer adoption cycle
● Technical and business drivers ●
Preferred
entry
Ad hoc
entry
Disillusionment
Early exit point ●
Provider adoption cycle
● Customer drivers and needs
Influence
If problems
fail to change
● Customers exit

Hybrid IT Departments
IT organisation acting as
a provider and broker
User or consumer
Traditional IT Private Cloud Hybrid Cloud Public Cloud
Traditional IT
management
group
Private Cloud
management
group
Public Cloud
management
group
IT Services
Broker group

Ubiquitous
power
unlocked
innovation

The embrace of utility power
0%
20%
40%
60%
80%
100%
1910 1920 1930
Utility supply Private supply

Is South Africa behind the enterprise cloud curve?

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