Tag Archives: SaaS

Shaking off the Bias Against Enterprise Hosting Services

At the turn of the century, that would be the 21st century, third-party hosting services that handled enterprise-class system like SAP were rare. There was a definite bias against enterprise hosting services because it seemed too risky to hand over mission critical systems to a stranger. It was also very difficult to make a rational business case in support of such a decision. Even more consequential, most people in the U.S. were afraid of the term outsourcing. There were simply too many unknowns and technical hurdles that could not be overcome at that time.

But that was then, now thirteen years later, managed hosting services are viewed in a much more favorable light. There are still trust issues and technical hurdles abound, but the economies of scale outweigh the potential problems. Further, the trust issues have been mitigated by the emergence of high quality security methods and tools that were not available 10 years ago. The term ‘outsourcing’ is even less intimidating now.

The cost advantages that third party hosting providers offer are driving much of the interest in managed hosting services. Hosting providers can spread out their fixed costs across all customers for things such as the datacenter building, HVAC, electric power consumption, the racks, the hardware and even the technical services.

This allows an enterprise hosting provider to fractionalize their fixed costs and charge only a portion of the full costs to each of their customers. This approach typically yields a lower cost to each customer than if they were to bear the entire fixed costs of supporting their own data center.

Cost savings would be irrelevant though if customers could not trust hosting providers to reliably support and maintain their enterprise systems. Trust is where the rubber meets the road. For organizations that utilize SAP outsourcing services, the mission-critical nature of SAP would certainly compromise the entire enterprise if their outsourcing partner could not meet their service level agreements.

Adding momentum to the resistance to ‘outsourcing’ back in the early 2000’s was the cultural notion that outsourcing meant sending U.S. jobs overseas, which is bad for U.S. workers. In 2004, economist Paul Samuelson (a Nobel Prize winner) wrote a paper that claimed the economic impact of outsourcing is similar to opening up the flood gates and allowing mass immigration of workers willing to work at extremely low wages. Obviously, the effect would be to drive down wages for everyone in the middle class, even if it did benefit certain employers.

Considering the incredible mixture of problems, tragedies, and uncertainty that plagued first 10 years of this century, the seed of opportunity for managed hosting and outsourcing was able to survive and grow. Today, nearing the end of 2012 and looking ahead into 2013, managed hosting is being transformed into something called cloud computing, which again puts the enterprise hosting providers at the center of a new trend.

Source: http://www.secure-24.com/shaking-off-the-bias-against-enterprise-hosting-services/

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Cloud computing presents big savings opportunities

With some kind of major budget cutting around the corner, no matter what happens with sequestration, government organizations need to lower their information technology costs. One option that works: Leverage cloud technology. And don’t stop with “routine” IT processes — the impressive savings come when you leverage cloud to truly support your mission.

The government’s Cloud First strategy requires agencies to evaluate secure cloud computing options before making new investments in IT. The strategy identified $20 billion in potential savings from cloud computing; this represents 25 percent of the total IT budget. For agencies to tap into this cost savings opportunity, they must leverage the cloud for mission efficiency and IT efficiency.

The government’s 2009-2010 inventory of its data centers identified more than 3,000 data centers, providing a great opportunity for cost savings and increased efficiency by moving to the cloud. A recent Deltek report estimates that the average use of federal servers is 24 percent — the target is 60 to 80 percent. This means the average federal server operates at only 24 percent of capacity.

Imagine if an employee worked only 24 percent of the time. If you did not look at how to improve that employee’s productivity, you might unnecessarily hire two to three more employees to fill the gap. You might also forgo projects because you think you don’t have manpower to complete them.

When you translate this scenario to IT infrastructure, it’s easy to see room for savings. As IT infrastructure and operations account for 60 percent to 75 percent of an organization’s IT spend, closing that gap is crucial to lowering the cost of government.

Organizations that reduce costs and increase IT resource use have demonstrated three ways to tap into the full cost savings opportunity of the cloud through the delivery of mission efficiency:

• Build a strong foundation through Infrastructure as a Service. By consolidating IT infrastructure through virtualization, among other things, agencies can pool underused resources and create efficient, resilient IT infrastructure. Cost savings are real, because when you consolidate underused servers into a common pool of resources, agencies are in a better position to extend the life and capabilities of existing infrastructure and make smarter future purchases.

• Pay for the software applications you actually use, and make them broadly available on multiple devices via Software as a Service. In this model, cloud providers install and operate application software in the cloud, and users access the software from the cloud clients. This eliminates the need to install and run the application on the user’s own computers, and significantly increases scalability. Price is also adjustable based on the number of users. This is valuable when a lot of users want to access the same application.

Across government, there are many common applications, such as email, collaboration, content management, project management, human resources, finance, grants and procurement. This presents a significant consolidation opportunity, as SaaS is the most efficient model available for the adoption of such applications. Leveraging the SaaS model for these applications has another significant advantage — it will make them more accessible to an increasingly mobile or field-based workforce. This saves money and enhances productivity, motivation and flexibility.

• Use the cloud to make software development easier, faster and more cost-effective. Most application development in the government happens outside of the IT department. As agile development methodologies have entered the mainstream, combining them with the Platform as a Service technologies will result in another level of cost savings. Modern PaaS environments, where applications can be deployed without requiring users to purchase and maintain additional hardware and software, reside upon the IaaS infrastructure model. By combining these approaches, agencies can reduce software development times and costs.

PaaS environments also enable applications to take advantage of the cloud’s flexibility and agility. And some PaaS environments feature tools that allow for the rapid development of mobile applications, which could accelerate the migration of core government services to support a mobile workforce and empower citizens to interact with their government in the same way they do with their insurance companies and banks.

A recent MeriTalk report on migrating mission-critical applications to the cloud reveals that the government could save approximately $16.6 billion annually if all agencies move just three mission-critical applications to the cloud. Of those that have moved a mission-critical application to the cloud, 91 percent report success.

One of the biggest challenges the study found was security. Predictably, 73 percent of IT managers and systems integrators surveyed said security concerns are a primary barrier to virtualization. As a result, most favor private clouds, where the agency owns the cloud and all the information residing there. Despite the challenges that come with virtualization, the study found that the government clearly recognizes the benefits that moving to the cloud would bring in cost savings, efficiency, availability and agility: Federal IT executives say they expect 26 percent of their mission-critical applications to live in the cloud in two years and 44 percent in five years.

Virtualization solutions, which provide the foundation for a smoother transition to cloud solutions, are currently run by all 15 executive branch agencies, including all Defense Department agencies, services and joint commands, and throughout both the legislative and judicial branches. However, recent reports estimate that only one-third of federal servers are virtualized, leaving enormous opportunity to realize savings.

Virtualization is defined as the creation of a virtual (rather than actual) version of something, such as a server, storage device or operating system. Virtualization addresses IT’s most pressing challenge — the infrastructure sprawl that compels IT departments to channel 70 percent of their budget into maintenance, leaving scant resources for business-building innovation. Virtualization helps reduce capital expenses through server consolidation, leaving more budget room for business-building innovation.

Tapping into the significant advantages of the cloud will also increase mobile workforce capabilities, reduce energy costs and consumption, increase agility and, most importantly, allow agencies to more effectively and efficiently meet their missions.

Source: http://www.federaltimes.com/article/20130303/ADOP06/303030004/Cloud-computing-presents-big-savings-opportunities?odyssey=nav%7Chead

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On-Premise vs. SaaS ERP Software Costs

The Cloud has inspired a new way of thinking about ERP software deployments, with companies having the option to purchase a license or obtain a SaaS solution. When purchasing a license you own the software and have the ability to deploy it in your data center (on-premise). When you purchase a SaaS solution (sometimes called an on-demand solution), you rent a complete turnkey package that includes software and the entire delivery mechanism.

There has been a lot of debate about the merits of on-premise vs. SaaS ERP solutions and many of the arguments have been based on assumptions about how much different solutions would cost.  But what do the numbers say about the cost differences between the two options?   With SaaS ERP solutions your business pays less upfront while on-premise requires you to buy the software outright.  However, there are many of other factors beyond the initial investment that go into evaluating total cost of ownership (TCO).  Based on numbers gathered by averaging quotes provided by 3 different ERP providers, we did a cost comparison between the two options.

Small Businesses

With a very small deployment scenario, we pegged the initial cost of licensing the software on-premise at $20,000 and the cost of one year of SaaS is $16,000. So a SaaS deployment can provide lower costs in year one.  On-premise ERP can also require acquiring additional internal infrastructure and may incur additional staff costs to maintain the solution.  So, for small businesses SaaS may offer better ROI.  Since costs remain rather constant, SaaS is also easier to budget for.  However, in some scenarios an on-premise deployment makes more sense.  For example your business might be running a point-of-sale terminal that needs to connect to your server.  In this situation, you may not want to rely on an external Internet connection.

Mid-Sized Businesses

For mid-sized businesses, we obtained pricing information by comparing specific customer proposals from SaaS and license vendors. We ascertained an increase in the cost of the license to $50,000 and the cost of SaaS to $40,000 per year. In this scenario, in year five, the cost of SaaS comes close to equaling the on-premise costs of a license plus internal infrastructure. The numbers level out because the cost of both the fixed license and recurring SaaS payments increased proportionately while the infrastructure cost remained relatively fixed. However, you must also consider labor costs. We assumed the mid-sized business would have the cost of paying for 1/5 of an IT person to maintain the server, operating system, and software application; these costs may mean that the on-premise deployment would be more expensive.

For mid-sized businesses we computed a break-even point over a seven year deployment. Holding other assumptions steady, the break-even occurred when the cost of the SaaS annual fee is approximately 1/3 of the cost of the license plus one year of annual maintenance. So, if your only concern is out-of-pocket expenses, the option to purchase a $50,000 license + maintenance is roughly equivalent to a $20,000/year SaaS license.

Review of Assumptions and Methodology

The cost of the SaaS annual fee compared to the cost of the software license is critical to this analysis. Based on actual market data provided by SaaS providers and on-premise license providers, we devised a formula to approximate the cost disparities. In both cases, the cost per user (when applicable) is reduced as more users are added at approximately the same rate. Also in both cases, the addition of modules increases the cost.

For purposes of the comparison we assumed that the on-premise and SaaS systems deployed the same software. This means that we are not considering a scenario in which legacy client server software is being used. We also assumed that the software was web-based so client upgrades are not required. Doing this kind of comparison requires making a number of other assumptions:

+ Calculations did not include NPV calculations.

+ Hardware and software costs for an on-premise deployment are similar for small and mid-sized customers. This equals approximately $15,000 for the deployments shown. This does not include off-site backup storage.

+ Maintenance fees are 20% per year of the license costs. In the on-premise scenario the maintenance costs cover the application, OS, and database software.

+ Configuration, training, and data migration fees are equal across all deployment models. We used a 1:1 ratio of license cost to consulting fees for this analysis.

+ Customization fees are not included, but would be equal across all models.

+ Application support is not included, but would be equal across all models.

+ For an on-premise deployment, power and replacement server parts were assumed to cost $1,000/year.

When is SaaS Better?

Businesses benefit from SaaS when they cannot dedicate IT resources to installing and managing applications. We assumed upgrades occur two times per year and require approximately five hours to install. In addition, with SaaS expenses are deferred, so the model becomes more attractive as the cost of capital goes up.

The on-premise model contains the most upfront expenses as well as significant ongoing IT expenses paid over time. As the cost of capital increases, the upfront costs are not impacted, but the impact of the ongoing IT costs is reduced, so that the overall benefit is less than with SaaS.

Also, with ERP software there is a significant amount of upfront analysis, consulting, configuration, testing, and training, so these costs should be figured into the calculations. When these expenses are relatively low, the two approaches are roughly equivalent, but if they reach 15% and higher, the SaaS solution will always be less expensive than an on-premise solution. Because all of these factors are different for every business, the best way to decide between SaaS and on-premise is to perform your own TCO evaluation. That way you can take into consideration your company’s unique needs.

Conclusion

This article addressed costs, but costs are only one part of the deployment equation. Your deployment model should be based on your level of IT expertise, your comfort level with outsourcing, the strength of your internet connection and tolerance for downtime, and the timing of expenses.

As your business changes, your business requirements change. Company size, IT expertise, legislation, risk, programming requirements, and other factors will influence your SaaS versus on-premise deployment over time. You should partner with a provider that offers a choice of license and SaaS deployments so you can switch your deployment if your requirements change.

Source: http://www.mbtmag.com/articles/2013/02/premise-vs-saas-erp-software-costs

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How to Avoid the Hidden Costs of Cloud Computing

We all know the conventional wisdom about cloud computing: it’s cheap, fast and easy. But is it really that much cheaper? Or is it simply optics that make it appear cheaper?

Optics can absolutely change your perception of the cost of something. Just think about your morning jolt of coffee. $3.50 for a no-foam, half-caf, sugar-free vanilla latte doesn’t seem that expensive. It’s a small daily expense when viewed by the drink. It appears even cheaper if you pay for it with a loyalty card where you don’t even have to fork over the dough and the vanilla shot is free. But what if you bought coffee like IT buys technology? You would pay for it on an annual basis. That $3.50 latte would now be about $900/year. For coffee? How many of you would go for that deal? That’s optics and it plays right into the marketing hands of the public cloud services your business is consuming today.

But optics aside, is that $99/month per user SaaS application just another $20,000 per year enterprise application? Is that $0.25 per hour virtual machine just another $85 per year hosted VM? No, it’s not the same. Because the pricing models are not just optics but an indication of the buying pattern that is possible. If you buy it the same way you do traditional IT, then yes, the math says, there’s little difference here. The key to cloud economics is to not buy the cloud service the same way you do traditional IT. The key to taking advantage is to not statically and rotely consume the cloud. Instead, consume only what you need when you need it – and be diligent about turning off when you aren’t.

That said, however, there are cost gotchas for which you need to be watchful. Otherwise you will face the "hidden costs" of the cloud. So what are these gotchas and how to you avoid them? You have to look at this question in two groups: SaaS and cloud platforms.

SaaS services nearly always carry a perpetual, per-user license (you pay monthly on an annual or multi-year term). The hidden costs here fall into 3 areas:

1. Customization – the more you can use the SaaS solution as it was designed the lower your costs. Customizations can quickly lead to development and maintenance costs you didn’t anticipate. this is the most widely made error by enterprises. It is more cost effective to teach your employees to use the SaaS as it is designed than to try to bend it to your processes. This isn’t always possible but should be used as a rule of thumb.

2. Integration – you will inevitably integrate SaaS services with in-house applications, data stores and other SaaS services. These integrations must be built, managed and maintained. Best practice is to define a clear integration architecture via as few means as possible.

3. Sprawl – A SaaS app you bought initially for just 15 employees, sounds like a great investment and low-cost solution until you open up the app to 1500 employees. Suddenly $99 per user could be more than an in-house solution. Be diligent about who you grant access to any SaaS app.

On the cloud platform front, these services tend to have a pay-per-use model that can be positively be affected by application behavior rather than use pattern. Thus the hidden costs to avoid are:

1. Not turning things off – It’s easy to see how pay per use makes your startup costs low and elastic scaling as traffic rises easy. But it is just as easy to not pay attention to application use/load patterns when they go the other way. This is where you can save tremendous money, by turning off resources that are no longer needed.

2. Storage grows, it never shrinks – and on a pay-per-use service you are constantly reminded of this. which means you need to actively manage your storage consumption by moving data to lower cost services when they are no longer in constant use, leveraging caching as much as possible and deleting files or copies of files if you don’t need them.

3. Not activating cloud economics – Not every application is a fit with a pay-per-use platform. The best fit are those that take advantage of the pricing model through either elastic scale or transiency. Elastic scale means the app increases or decreases its resource consumption based on use. Best fit are apps that do this as granularly as possible. Transient apps are those that are not active all the time and can be parked or completely shut off when not in use. Batch work, high performance computing, seasonal or cyclical applications are all good examples. An app that just sits there 24/7 consuming the same resources is usually a bad fit and should be moved either back into your data center or to traditional hosting.

Source: http://www.zdnet.com/how-to-avoid-the-hidden-costs-of-cloud-computing-7000011504/

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SaaS remains most popular form of cloud computing

Software as a service (SaaS) continues to be the top cloud service that the UK enterprises plan to use in 2013, despite newer cloud services such as datacentre as a service, database as a service or even testing and development as a service.

A majority (55%) of respondents of the TechTarget and Computer Weekly UK IT priorities survey 2013 cited SaaS as the external cloud service that they will use this year.

Infrastructure as a service (IaaS) was the second most popular cloud service, with around 34% of some 400 IT executives surveyed planning to use it.

In comparison, only 12% of respondents said they will use datacentre as a service and only 11% said they will use collaboration as a service.

Other cloud computing services such as testing and development and private cloud design were also cited by less than 20% of the respondents.

In addition, only 16% said they will use security as a cloud service emphasising the cloud computing security risks and concerns.

UK businesses are still very cautious about investing in cloud computing in 2013, with only 30% of IT executives planning to increase their cloud budget for 2013. This compared with 46% investing in software and 43% investing in hardware resources this year.

Among their IT objectives for 2013, 33% said they planned to expand IT to support business growth, 23% planned to automate the business more and 14% planned to maintain service levels with flat budgets.

But despite cloud being touted as the technology that can help businesses automate, support growth and cut management costs, a large majority (71%) of IT executives said they would use on-premise hardware or software deployment models for 2013.

The study also showed that server virtualisation and datacentre consolidation still topped the list of IT priorities for UK enterprises, with only 13% opting for a public cloud infrastructure deployment model.

Biggest cloud concerns
While security and reliability of data remained the top concerns for UK IT professionals when it came to cloud computing, other challenges such as reliability, lack of interoperability and problems of migrating workloads to and from the cloud also ranked high in users’ cloud concern list.

As for cloud service providers, only a slightly higher percentage of respondents (27%) picked external cloud platforms to private cloud platforms (22%).

The study also revealed that following datacentre consolidation as top IT priority, IT professionals preferred to implement policies around BYOD trends over use of cloud services. For example, nearly half (49%) said they are planning policies around allowing users to bring their own smartphones, and another 29% are looking at how to allow employees to use their tablet devices on the corporate network.

But only 12% said they are planning to implement policies around using email services such as Gmail, 13% are planning to allow employees to use Google Docs, and 16% are implementing strategies for employees to use Dropbox – all personal cloud storage services. 

Source: http://www.computerweekly.com/news/2240177830/SaaS-remains-most-popular-form-of-cloud-computing-for-UK-IT

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Cloud Computing Stocks Rose 6 Percent In January

Cloud computing and cloud services stocks rose nearly 6 percent during January 2013, according to the Talkin’ Cloud Stocks Index, which tracks 20 companies that offer IaaS, PaaS, SaaS and virtualization technologies. For the week ending Feb. 1, 2013, the index slipped 1.33 percent. The biggest weekly loser was VMware (NYSE: VMW), which may face slowing growth amid layoffs.

Although cloud computing stocks are trading at lofty levels are there are two new reasons to be optimistic:

+ Carbonite (NASDAQ: CARB) the cloud-based backup provider, announced strong Q4 growth on Feb. 4.
+ SolarWinds (NYSE: SWI), the IT management software company, also disclosed storng earnings for Q4.

Source: http://talkincloud.com/cloud-computing-funding-and-finance/cloud-computing-stocks-rose-6-percent-january

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2013 Challenges for Developers, Part I: Mobile and Cloud

In 2013, life for developers is going to get interesting, say industry watchers — which sounds great until you remember that old (purportedly) Chinese curse. Living in "interesting times" is likely to prove challenging to hard-working codederos.

Dana Gardner, president and principal analyst for Interarbor Solutions (and a must-read blogger) sees 2013 as the time for developers to make strategic bets on both mobile and cloud, but he also advises caution.

"Sorting out the Web-vs-native development equation (and how to best target the most devices) gets trickier in 2013," he said. "Selling software as native apps is costly and high-stakes. Web-only is lower in costs and may get better adoption, but with really low margins, usually. The bottom line is that developers need to be better at forward-looking business development and micro-economics, no matter how good they are at their coding crafts."

If you want to see where this particular debate is headed, Gardner said, keep your eyes on current trends in game development. He points to cross-platform PC-based virtual environments with cloud services, such as Steam, vs. proprietary consoles, or more pure SaaS games, such as Minecraft.

While you’re sorting out "Web-vs-native," you’re also going to have to think carefully about picking cloud partners, both in terms of the technology and the relationship, Gardner said. Start by asking yourself a lot of questions.

"PaaS strategies and making the right choices about them have huge implications for next five years," Gardner said. "Losing control to a PaaS may be advantageous in economic and risk terms, but it’s still a big bet. Are there ways to hedge? Should a multi-PaaS approach hold for the near term? If tools and IDEs are nearly the same, what not chose a multi-PaaS approach? Write once, PaaS anywhere? Will enterprises also go for multiple sources on PaaS or pick one? Developers should have a say in these decisions, as ISVs and as enterprise dev players."

"The good news," Gardner added, "is that CIOs and enterprise strategists are sorting this out too, and a developer with strong insights can rise quickly by reducing uncertainty and bringing clarity to the planning process. So developers should raise their hands and be heard, not sit back and wait for the dictates from above at this dynamic stage in the business."

Randy Heffner, vice president and principal analyst at Forrester Research, is a leading expert on architectures and design approaches to building enterprise applications (and another blogger worth reading). He agrees that 2013 will a big year for developers defining their mobile strategies, but he argues that those decisions need to be made within the context of "cross-channel interaction."

"It is easy to be all about getting a mobile app out there and to forget that what your customers and employees really need is to be effective across mobile, Web, voice, e-mail, social, and other channels," Heffner said. "Even if today’s challenge is focused on mobile, if you don’t consider how today’s mobile app will, in the future, grow to be cross-channel, you’re building in significant rework."

Heffner goes into this point in detail in his November 2012 report, "Use a Reference Architecture to Speed Cross-Channel Digital Experience Delivery."

Heffner also believes that finding a new way to think about integration is going to be a critical developer challenge in 2013.

"The old mindset for integration is that its purpose is to connect and reconcile among siloed applications," he said. "When you add to this the proliferation of integration technologies and patterns (SOA, BPM, CEP, business rules, etc.), you start adding technology silos on top of the application silos. What we need is an integrated view that focuses on the real goal of business technology: building an effective, agile business. Rather than putting siloed applications at the center of the design model, we need to put the design of our business at the center.

Heffner calls this idea "digital business design," and he blogs on the topic here.

Al Hilwa, program director for IDC’s application development software research, believes that the biggest challenge facing developers in 2013 boils down to effective navigation of their platform choices.

"The world is quickly shifting to one where applications, both on the client and the server, have many choices of platforms competing for developer affectations," Hilwa said. "For applications targeting consumers, and even for those targeting enterprises in the age of BYOD, choices have to be made about which platforms to support and which to leave behind or defer until a later time. For each of the major platforms, like iOS or Android, the developers are aware that their potential users are making selections between ecosystems of content and services, and so they must make choices that are similar to target those users. Once a platform is chosen, then decisions have to be made about whether to approach the application development with native tools or with Web tools targeting mobile browsers, where much of the code can be leveraged for supporting other platforms."

"However, targeting HTML5 involves compromises in functionality and performance that also require careful navigation," he added. "On back-end platforms, developers have to choose cloud services, whether to operate on IaaS and spin their own machines or whether to use more curated models which support certain programming languages in a more intimate fashion. Fundamentally, 2013 is a year of developer choices to an even greater degree than any other which preceded it, and with these choices come a lot of anguish and agonizing."

Hilwa’s latest research reports are available on the IDC Web site.

Mike Gualtieri, principal analyst at Forrester Research (and no-nonsense blogger), offers a succinct New Year’s recommendation for developers:

"Write a mobile app already," he said. "You gotta have mobile app development on your resume. Even if it just means you downloaded the Android SDK or Apple Xcode and hacked out a test app. Carve out a Saturday afternoon and just do it. That’s all the time it will take if you are already a pro Java, C# or C++ developer. Now you can talk with some authority about mobile app development because your next job will probably depend on it."

Source: http://adtmag.com/blogs/watersworks/2013/01/challenges-for-developer-part-1.aspx

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Cloud computing features heavily in 2013 CIO tech priorities

cloud-computing-features-heavily-2013-cio-tech-priorities

The importance of cloud computing in the overall tech sphere has again been emphasised in a Gartner report surveying over 2,000 CIOs on their technology priorities for 2013.

Cloudy areas featured heavily in the top 10 priorities for CIOs, with cloud computing itself – alongside software as a service (SaaS), infrastructure as a service (IaaS) and platform as a service (PaaS) ranked at number three.

Elsewhere, legacy modernisation – a big element of companies moving into cloud-hosted solutions – was ranked at five, with customer resource management (seven), virtualisation (eight) and enterprise resource planning (ERP) apps (10) also make the top 10.

Yet the two priorities ahead of cloud computing in the pecking order, analytics and BI (business intelligence) and mobile technologies, make for interesting reading as of course the areas are all inextricably linked.

Back in 2011, Louis Columbus wrote of how analytics and BI was accelerating cloud adoption, citing the Forrester report ‘Understanding the Business Intelligence Growth Opportunity’ as evidence. Similarly, Forrester’s 2013 cloud predictions last month forecast a convergence of cloud and mobile, citing the fact that almost every SaaS application has a mobile client.

Mobile was also noted as the key trend disrupting the IT industry in the next 10 years with 70% of CIOs citing it, far ahead of big data and analytics (55%), social media (54%) and public cloud (51%).

There was little surprise in terms of the top 10 business priorities for CIOs in the coming 12 months. The Gartner survey revealed that increasing enterprise growth was the top priority, with delivering operational results and reducing enterprise costs making up the top three.

There were plenty of business priorities cited in the top 10 which cloud can help with. These included the aforementioned increasing growth and reducing enterprise costs, as well as improving IT infrastructure (ranked five), improving efficiency (seven) and implementing analytics and big data (nine).

According to Dave Aron, Gartner vice president, the results are indicative of a general growth in IT.

“Reacting to limited budgets by restructuring costs, outsourcing and doing more with less made sense from 2002 to 2011, when the supply of innovative technologies was scarce,” Aron said.

He added: “Adapting to, and leading, in the digital world requires doing things differently, yet in ways consistent with the demands of digital technologies, CIOs need to make the case that mainstream emerging mobile, big data, social and cloud technologies justify revisiting IT budget and investment levels.”

In November, Gartner looked into its crystal ball to look at the development of the three major cloud markets, forecasting in particular that the PaaS market will hit $2.9bn (£1.8bn) by 2016, and showing SaaS at $14.4bn (£8.98bn), IaaS at $6.2bn (£3.87bn) and PaaS at $1.2bn (£754m) at the end of last year.

Source: http://www.cloudcomputing-news.net/news/2013/jan/17/cloud-computing-features-heavily-2013-cio-tech-priorities/

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One in Every Four Outsourcing Opportunities Now Includes Cloud: Survey

About half of surveyed respondents revealed that cloud computing has been a feature of nearly 25% of their pipeline opportunities

Cloud computing industry continued offer steady growth opportunities during the third-quarter of 2012 with at least one in every four outsourcing opportunities now includes cloud, according to a survey conducted by Information Services Group (ISG).

According to ISG Research’s third-quarter survey of service providers, about half of all respondents revealed that cloud computing has been a feature of nearly 25% of their pipeline opportunities.

Major surveyed anticipated cloud services to rise rapidly over the traditional IT outsourcing functions, mostly driven by opportunities in the US market.

ISG Emerging Technology analyst Stanton Jones said that cloud is a disruptive trend in the enterprise, and this disruption is not only expected to continue, but accelerate, especially for the traditional IT service providers.

"From well-known software vendors to more nimble mid-market players and emerging pure-play infrastructure and SaaS providers, traditional IT service providers face significant pressure in nearly every direction," Jones said.

According to an analysis by TPI Index, the number of outsourcing contracts with cloud has reported steady rise along the same trajectory, from 110 in 2010 to 220 in 2011.

Further, ISG Research forecast that by the end of 2012, about 300 contracts featuring cloud computing will be awarded.

"Cloud services, especially shared platforms, are a new terrain for providers and clients alike, as they are highly standardized, and can’t be easily customized — the antithesis of traditional outsourcing," Jones said.

"Although the rate of adoption isn’t consistent across cloud categories, we’re seeing the greatest potential for growth and momentum in Software-as-a-Service (SaaS) – especially for Human Resources, Customer Relationship Management and collaboration.

"We project that Infrastructure-as-a-Service (IaaS) will lag behind SaaS in terms of enterprise-wide adoption."

Source: http://cloudplatforms.cbronline.com/news/one-in-every-four-outsourcing-opportunities-now-includes-cloud-survey-031212

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What will you be outsourcing in the next 12 months

A couple of years into the post financial crisis world I heard an executive say that the downturn wasn’t necessarily bad because booms invariably lead to waste and operating within budget restraints meant only good projects get signed off.

As economic uncertainly is about to enter its fifth year, I think we can dispense with the notion that unnecessary projects are being executed anywhere in the data center.

As companies adopt monitoring strategies to sweat existing assets, conduct application audits to rationalize functions and conduct wholesale consolidation projects to get data centers closed down and off the books as quickly as possible, it is fair to say that if it is not vital it is not happening.

Activities around monitoring and outsourcing always take an upswing in a downturn. Looking through the UK report of the DatacenterDynamics Industry Census for 2012 revealed the types of monitoring and outsourcing being adopted across seven key business sectors.

Investment in the UK data center sector can be estimated at around $US15bn and to increase marginally towards $US16bn. The highest rate of increase will be in outsourcing services. Currently almost one fifth of the UK data center server population is outsourced. Half of users don’t outsource any servers and just under 7% outsource 100%. Most, 25% of UK respondents, outsource between one and 25% of their server estate. However the trend is towards greater outsourcing of servers.

The census found that: “it can be estimated that the number of outsourced racks will increase at a rate between 15% to 20% per annum to around 330,000 by 2016”.

The census asked about physical assets and provides insight into why and where companies are investing in data center operations. End of facility life (29%), to increase IT capacity (46%) to prepare for virtualization or cloud (28%) and to reduce operating costs (58%) are named drivers.

The types of outsourcing being adopted by different sectors varies but the top line figures across all sectors show parity across Infrastructure-as-a-Service and Software-as-a-Service (19.6% and 18.2% respectively – double the figure for Platform-as-a-Service).

Hosted services and managed services are in the low 20% range, private cloud outstripping public cloud 20.3% to 6.3%.

What is clear is that even for today’s requirements companies are struggling with existing assets and are under extreme pressure to deploy efficient new data center capacity.

Source: http://www.datacenterdynamics.com/blogs/what-will-you-be-outsourcing-next-12-months-2&u=2471

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