Betting on the Cloud

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Nov 3, 2013 (3 years and 9 months ago)

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Cisco Confidential

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1

Betting on the Cloud

Joel A. Pogar, D/V Specialist

jopogar@cisco.com

-

Denver, CO

November 9, 2011


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2

We will speak in “generalities” about the cloud industry


Presentation will cover three key segments:

Cloud

d
efinitions
and
terminology

Why cloud and
why now?

SP deployment
models and
opportunities in
cloud

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3

Before we get started, tell me your top questions or issues.


TPI, it’s required!

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2010 Cisco and/or its af f iliates.
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Presentation_ID

4

What is Cloud
Computing?

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5

2005

Adoption Curve

Cloud Computing

Public or
v
-
Private

. . . . . . . . . . . . . . . . . . . . . . . . . .

V
-
Private Cloud

Public Cloud

2000

2010

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6

IT resources and services that are abstracted from the
underlying infrastructure and provided “On
-
Demand”

and “At Scale” in a multi
-
tenant environment

WHAT IS

CLOUD COMPUTING?

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7

Virtualization

Grid Computing

Application Hosting

Utility Computing

Platform as a Service

Infrastructure as a Service

Software as a Service

Storage as a Service

Database as a Service

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8

Cloud Definition from NIST

Public

Private

Hybrid

Community

Deployment

Models

Service

Models

Software as a
Service (
SaaS
)

Platform as a
Service (
PaaS
)

Infrastucture

as a
Service (IaaS)

Essential

Characteristics

On
-
Demand

Self Service

Broad Network

Access

Resource

Pooling

Rapid Elasticity

Measured Service

Visual Model of NIST’s Working Definition of Cloud Computing

http://www.csrc.nist.gov/groups/SNS/cloud
-
computing/i ndex.html

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9

Cloud Service Delivery at Scale

(Public / Private Cloud Providers)

Software

as a Service

Applications at Scale

(End users)

Platform

as a Service

Execution Platforms at Scale

(Developers)

Infrastructure

as a Service

Infrastructure at Scale

(System Administrators)

Enabling

Technology

Cloud Service Delivery at Scale

Unified
Service
Delivery and
Private Cloud Solutions

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10

Infrastructure
as a Service
(IaaS)

Platform as
a Service
(PaaS)

Software

as a

Service

(SaaS)

SaaS
-
Enabled Applications

Platform
-
Enabled Applications

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11


Network Service Providers

Are driving competitive differentiation by
tying together their hosting offerings
and MPLS networks as next
-
generation
service models for application and
business process delivery.


Pure
-
play Managed
Hosting Service
Providers

Data center service
providers delivering a
suite of collocation,
hosting, storage services

Technology owners

Technology (Voice, security,
storage, application software …)
selling services based on their
technology (
IBM,
Microsoft …)

Over the top players

New players such as Skype, Google, Amazon… selling
services carried over the networks, delivering value to
customers, but without any carrier service provider
being involved in planning, selling, provisioning, or
servicing them and of course without any traditional
telco

booking revenue directly from them.

IT outsourcing (ITO)
firms


Systems Integrator

System Integrators
-

take a bottom
-
up
view, subsuming the hosting function
into broader value propositions
around enterprise IT outsourcing or
application management.

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12

Figure 1: Magic Quadrant for Web Hosting and Hosted Cloud Systems

Infrastructure Services (On Demand), 2009

Source: Gartner (June 2009)

Challengers

Leaders

Media Temple

Quality Technology Services

Niche Players

Visionaries

AT&T

Savvis

Terremark

Rackspace

Amazon

GoGrid

(previously Servepath)

Joyent

OpSource

Softlayer

Layered Technologies

SunGard

CSC

IBM

Navisite

Completeness of Vision

Ability to Execute

A Scorecard
for Cloud Service Providers

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2010 Cisco and/or its af f iliates.
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Presentation_ID

13

Why Cloud and
Why now?

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14







Virtualization

Un
-
tethered applications,
un
-
tethered clients

High reusability

The Media
-
Rich
Internet

Application and
content quality

of experience

Ubiquity

Computing on demand
anywhere, anytime

Green

Technology responds
to demand for
improved energy use

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15


$0

$50

$100

$150

$200

$250

$300

Spending

(
US$B
)

0

5

10

15

20

25

30

35

40

45

50

55

60

60

Virtualization makes
things worse

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Physical server

installed

base

(
millions)

Logical server

installed base

(
millions)

Source: IDC

Admin
Costs
Dominate
Budgets

New server spending

Power and cooling costs

Server mgmt. and admin. costs

Operations & Maintenance Now ~80% of IT Budgets and Growing

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16

By
schuhfits

on
Flickr

© All Rights Reserved


Approx 80% of ‘mid
-
sized’ companies
do
not have a viable


second
site
& 25
% do not have viable primary production site

-
SunGard Research


41.7% of companies’ data centers will run out of

power, cooling or space by the year 2011

-
Uptime Institute


~11.8 million servers in data centers with average

utilization rates around 15%

-
Martin MC Brown
ComputerWorld

Blog


“If you move your data centre to a cloud provider,


it will cost a tenth of the cost.”




Brian
Gammage
, Gartner Fellow

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2010 Cisco and/or its af f iliates.
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Presentation_ID

17

Survey Says
!

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18

Projected Global Cloud
Computing

Services Revenue in 2013

Description & Examples

$ billions

Source:
Cisco
IBSG
; Saugatuck, IDC, Gartner,
TripleTree
, Deutsche Bank

Platform
-
as
-
a
-
Service

App dev &
run
-
time environment

I
nfrastructure
-
as
-
a
-
Service

Physical IT resources, on
-
demand

Software
-
as
-
a
-
Service

Usually delivered to browsers


SMBs are currently the
drivers of the cloud market
(Especially the sub 100 market)


SaaS Opportunity for SMB
is about delivering
functional application at
lower cost per user /
transaction


Enterprises, while a future
driver of cloud services will


buy different services


have different buyer
behavior


Emphasize private cloud




Key Points

SaaS

$29.5 B

IaaS

$11.2 B

PaaS
$
3.2 B

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19

2009


2011 General Awareness of the Term “Cloud Computing”
Among SMBs <250 Employees

December 2009, SMB <250 Employees,
N
=
510

March 2011, SMB <250 Employees,
N
=
543


Those ‘very aware’ of cloud computing has
more than doubled
-

from 20% to 44% of
respondents


A full 79% of the respondents are ‘very or
somewhat aware’ of cloud computing


20% of the respondents are very aware of
cloud computing


56% of the respondents are very or somewhat
aware of cloud computing

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20

2009


2011 SMB General Perceptions Business Value of ‘Cloud Computing’

Among SMBs <250 Employees



0%
20%
40%
60%
Provides Limited or No Value for our Biz
Provides Stable Way to Manage Expenditures
Provides Better Support / Service
Reduce Up-Front CAPEX
Provides Access to Tech and Innovation
Eliminates Need for Onsite Installation
Pay only for Tech Needed and Used
Reduces Total Cost of IT Ownership
Current Use All SMB 2009, N = 248
Current Use All SMBs 2011, N = 433
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0%
10%
20%
30%
40%
50%
Other
Difficult to Use
Poor Performance
Poor Support
Not Relevant to Our Business
Too Costly
Security Concerns
Percentage (up to 3 responses)

N =
397

2009 Priority Ranked Concerns from Current
Hosted/Subscription Services

(SMBs <250 Employees using at least one cloud service)

0%
10%
20%
30%
40%
50%
Difficult to Use
Poor Performance
Poor Support
Unclear Uptime SLAs
Lack of Proactive Monitoring
Not Relevant for Small Biz
Too Costly
Security Concerns
Percentage (up to 3 responses)

2011 Priority Ranked Concerns from Current
Hosted/Subscription Services

(SMBs <250 Employees using at least one cloud service)

N =
354

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22

2011 Likely Providers of Hosted/Subscription Services

Among SMBs <250 Employees



0%
10%
20%
30%
40%
50%
60%
Other
VAR
Retailer
Hosting Company
Tech Equipment Provider
Online Company
Software Provider
Service Provider
Percentage of Respondents
(select one)

N=543

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23

SMBs Know and
Use Cloud


The awareness of “Cloud Computing” amongst SMBs has increased dramatically since 2009.
(Today 44% claim to be very aware with a full understanding of what it means, up from 20% in 09)


SMBs continue to use basic cloud services
--
(
43% report using at least one cloud service)


SMBs are highly satisfied with the basic cloud services that they are already using;
(satisfaction
ratings have increased from an average of 6.76 to 7.47)

SMBs Will

Use
More Cloud


Most SMBs intend to shift more of their IT spend to cloud services; there is significant upside to be
had for more advanced services among larger SMBs


Almost 50% of companies expect to be spending 30% or more of their total IT budget on cloud
services; today 17% spend 30% or more of their IT budgets on cloud


The number of companies spending more than 30% of their software budget on SaaS will more
than double in 2 years to 45%

Vendor Trust is
Key


With greater awareness comes a more demanding customer base: Security has increased in
importance and access to innovation matters more


Security assurances & demonstrated business impact are
the

key buyer factors


and barriers


Performance guarantees and price remain important criteria for SMBs in choosing a Cloud
Provider; services tailored for SMB and price are now the single biggest drivers of provider choice


The majority of customers are open to buying future cloud services from their Service Providers

Service
Providers

are
Well Positioned


Service Providers have the ability to offer the kinds of features SMBs want:
QoS
/ availability and
uptime guarantees,
SLAs
, security and privacy features


Software and online providers are well aligned with growth areas like SaaS and IaaS


Service Providers need to increase emphasis on advanced cloud services in order to capture
market and mind share

Service Providers
are Differentiated


SMBs prefer bundled offers that focus on “remote worker”, “secure access” and “collaboration”


Interest remains high for cloud offerings that emphasize SP network differentiation (e.g. security
and uptime guarantees)


The ability to tailor the offer to SMB and their needs specifically (as opposed to simply offering an

Enteprise
-
light’ solution) will support SMBs continued preference for SPs

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2010 Cisco and/or its af f iliates.
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Presentation_ID

24

Cloud Deployment
Models

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25

Complexity

Revenue &
Revenue/Sq. Ft.

Co
-
location

Hosting

IaaS

PaaS

SaaS

SP Cloud Services

Virtual

Desktop

VDI

Disaster


Recovery

Dev/Test

Quality

Assurance

Compute

as a

Service

Maintain these services
since the revenue is there,
but deliver in a new (multi
-
tenant manner)

Smallest revenue opportunity and those
already in this space have a strong
position. Do not focus on it for now

This is the destination. If the skills exist create
these services in parallel to IaaS, otherwise
focus on IaaS which is the foundation that can
be monetized and then leveraged for future
SaaS offers

IaaS

$11 B

PaaS

$3 B

SaaS Hosting

$30 B

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26

&
Mission Critical

Enterprise

Service Level

99.995% SLA for HA

Stateful

Firewalls

3x Private VLANs

1
Gbps

Guarantee

3
-
Tier ILM Storage

Enterprise Web
Hosting

Web Hosting, eCommerce


99.99% SLA

Stateful

Firewalls

1x Private VLAN

100 Mbps Guarantee

2
-
Tier ILM Storage

“Test/Dev”

Start using clouds for
application development
and testing environments


99.9% SLA

Lowest Cost

Easy On
-
boarding

Application Requirements

Premier

Balanced

Essential

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Performance

Normalization

Green

Need It


Get
It Instantly

Don’t Need it



Give It Back

Pay
-
as
-
You
-
Go

Suitability

Capacity

Request a Resource

Pay as You
Use

Resource Pool

Subscription

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28


Selling By Pool of resources

Compute Power : CPU, GHz of CPU or
VPU

+ Memory and Storage

Navisite
, Terremark


Selling by aggregation of resources

Choose
VPU+Mem+HD

Service charge by total amount used

SAVVIS



Selling by Virtual Machine

Naked Predefined
CPU+Mem+HD

configs

Predefined
CPU+Mem+HD

+ OS
configs




Add
-
on Services


Licenses (via
SPLA
)


OS
-

MSFT NT, Linux, etc


Apps
-

SQL, Exchange


Security


Firewall (ACL/basic features)


IDS/
IPS
/ A la carte


Load balancing (included)


Additional IP addressing


Backup and disaster recovery


Compliance requirements




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29

Business

Application

Solutions


Unified

Data Centre

Networking



Unified

Fabric

Unified

Computing

Unified
Network

Services

Integrated
Computing
Stacks

Hosted

Collaboration

Solution

Cisco Virtual Experience

Infrastructure and Virtual

Desktop

vBlock Infrastructure
Packages

FlexPod

Cloud

Management

Tier
-
1

Business Applications

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Service Provider
Solutions

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Refers to the separation of the physical endpoint from the
logical desktop


Endpoints may be variety of devices; applications are hosted
where ever the best user experience is offered (locally at
endpoint or data center)


Access from the endpoint to the logical desktop is delivered
through the network

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Personal Computer is disaggregated


Compute, memory,
and storage
are moved
to the data center


Keyboard, Mouse, and Display stay with user


Client is connected to the Display, Keyboard, mouse


Client connects to the VM in the data center


Supports Rich media and UC applications

Broker

Compute

Storage

Keyboard, Video, Mouse

Network

VXI

Client

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Solutions are
Continuing
to mature


VMware View 4.5


Citrix
XenDesktop

5.0


Hypervisor improvements and support


CPU and Server architecture improvements


Nehalem


Cost effective
8GB

dimms


Windows 7


XP is 9 years old, soon
EOL


SP1

for
Win7

RC1

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34

Thank You
& Questions