Western European Private Cloud Infrastructure Growth

The detractors of cloud computing benefits will state that the typical adoption is still limited at most enterprises -- they're deploying cloud services to a few early-adopters. That being said, some leading markets are confidently moving ahead with mainstream deployments, regardless of the caution. While others, such as western Europe, are apparently in transition.

The western European private cloud market will grow at a CAGR of 23.2 percent for the next five years to reach $7.9 billion in 2016, according to the latest market study by International Data Corporation (IDC).

IDC has been looking in-depth at the private cloud marketplace -- from a hardware, software, services and networking points of view.

"The growth of private cloud is even more impressive in the context of the current economic situation," said Mette Ahorlu, research director, IDC European Services.

According to IDC's assessment, demand in the region is being driven by the need for cost savings and efficiency and with a longer perspective of creating increased flexibility, and is across the board -- from hardware, to software, to management, networking and services.

Creating a private cloud has an impact on all aspects of IT infrastructure.

Key findings from the market study include:

• Most enterprises are still in early phases of cloud adoption, typically testing out cloud and perhaps rolling out one or a few cloud services to the full range of relevant users, but not deploying cloud on a really large scale.
• There is growing interest in pre-packaged private clouds, pre-configured with servers, storage, network and management that speed up implementation and reduce need for services.
• The cloud computing approach is to become a critical part of the IT strategy for the majority of EMEA organizations in the next two to three years.
• While security, compliance and data location are barriers to public cloud they become drivers for the adoption of the private cloud.
• Partnering between technology companies and service companies is important to help create transparency in a complex market where clients think there are too many moving parts.
• Hosted private cloud is not nearly as popular as clouds on customers' premises, but hosted private cloud will grow even faster and revenue will exceed on-premises clouds by 2016.
• While the market is serviced by traditional IT providers and outsourcing companies, telecom service providers have also seen it as a great opportunity to expand their businesses.

IDC believes that managed cloud services is fundamentally a network-based offering. It's becoming an established commodity, scales to a mass market customer base, and builds on the kind of support or billing relationships that telecom service providers are capable of offering.

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Enterprise Mobile Benchmark Study Offers Guidance

A comprehensive enterprise mobile device and application strategy, if executed correctly, can become a significant competitive advantage. But, there's a growing need for answers to the questions troubling many IT executives -- with regard to their mobile device policies, the adoption of media tablets, and mobile application development costs and practices.

According to the latest market study by International Data Corporation (IDC), corporate-liable devices still prevail with 77 percent of survey respondent organizations providing smartphones to their employees and 49 percent providing media tablets in 2011.

Of these corporate-liable devices, 70 percent were purchased by the organization and issued to the employees while only 7 percent were purchased by the employee with full or partial reimbursement.

The goal of the study, based on responses from CIOs and IT professionals in the U.S. and Europe, is to provide IT organizations with insight into how their peers have addressed similar mobility issues.

Highlights from the IDC Mobile Benchmark Study include:

• Employees in executive, sales, IT, and marketing job functions are more often issued a smartphone over other functions within an organization.
• For corporate-liable smartphones, most organizations (73 percent) pay the entire mobile service bill (voice and data) directly to the mobile service provider. Similarly, 71 percent of organizations pay the entire mobile service plan for corporate-liable tablets.
• To mitigate risk and support costs of letting employees bring their own devices, 45 percent of the respondents provide limited IT help desk support for business applications on individual-liable smartphones, while 42 percent report they provide limited IT help desk support for business applications on individual-liable tablets.
• In both cases, hardware issues are relayed back to the mobile service provider. In 33 percent of the organizations surveyed, no support is provided for individual-liable smartphones and 44 percent of respondents reported no support for individual-liable tablets.
• Surprisingly, a high percent of respondents reported they expect tablets will be a second device to the traditional laptop/desktop PC.
• The notion that tablets would be treated as second devices to laptops -- and refreshed every 2.5 years -- will be costly for IT organizations in the long run. IDC estimates it will cost the average large organization an additional 1 percent of their IT budget every year just to refresh these media tablets.

"Many IT organizations are currently working through their mobile device strategy and policy issues. To be successful, IDC recommends that IT executives establish a governance committee including finance, HR, and Legal to outline a comprehensive Bring Your Own Device (BYOD) strategy, including use policies and cost allocation methods," said Meredith Whalen, senior vice president, IT Executive & Industry Research, IDC.

Most importantly, IDC recommends that IT executives identify the costs associated with developing and supporting multiple mobile platforms, and apply a governance strategy to mobile application development efforts to ensure projects are prioritized based on the highest value add to the enterprise.

IDC's Mobile Benchmark Study was designed to address the biggest questions IT executives are facing around their mobile device policies, including tablet adoption and mobile application development costs and practices.

The study surveyed 52 CIOs and senior IT professionals in the U.S. and Europe during the months of September 2011 and November 2011. Ms. Whalen provides a summary the study findings in the following brief video presentation.

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Cloud Service Usage Now Mainstream in UK and Ireland

The increased uptake in cloud service adoption is truly a worldwide phenomenon. New research published by Cisco Systems demonstrates the dramatic shift in attitudes towards cloud services in the UK and Ireland.

The report -- entitled "Cisco CloudWatch 2012" -- is the second in Cisco's annual Cloud series and finds IT decision makers in a bullish mood, increasingly placing applications and services from across their business into the cloud and planning for further investment over the coming 12 months.

Furthermore, the message that cloud services can deliver significant cost reduction is now resonating within the IT community -- cost saving has become a top driver for adopting cloud applications.

Granted, security remains the number one concern when migrating services and applications to the cloud. But that concern is noticeably less pronounced than in last year's report.

The use of public cloud is up 11 percent, although private cloud still dominates.

Key findings of the market study include:

• IT decision makers say that cloud is now on their agenda -- a resounding 90 percent up from just 52 percent in 2011.
• Of this number, 31 percent consider cloud as being critical and underpinning much of the organizations' activity (this was just 7 percent in 2011).
• Of those organizations where cloud is on the agenda, 85 percent are planning further investment in the next twelve months.
• In CloudWatch 2011, reducing cost ranked fifth in a list of most important things when considering cloud -- in today's report it ranks as the number one priority.
• 20 percent reduction in concerns over security (52 percent in 2012 compared to 72 percent in 2011).
• 54 percent of respondents currently use private cloud (up from 34 percent in 2011) and public cloud usage is up from 18 percent in 2011 to 29 percent in 2012

Cisco commissioned independent research amongst IT decision makers across a broad range of vertical sectors including retail, finance, healthcare, public sector and service provider.

The results clearly show that cloud has moved from hype to reality, with cloud now seen as a mainstream element of IT strategy.

"This new report validates a shift that many of us in the IT industry have been witnessing first hand over the last 6-12 months. Cloud usage has now gone mainstream. After several years of ‘hype' across the IT industry, it now seems that cloud is maturing and organizations across a broad range of sectors are realizing the benefits of moving to a cloud model, said Ian Foddering, Chief Technology Officer and Technical Director, Cisco UK and Ireland.

Foddering continues, "Against this backdrop it's encouraging to see progressive companies realize the potential of cloud to revolutionize their respective industries. All these signs point towards a well-established market where the previously blurred boundaries of cloud computing are clearing. IT decision makers now more educated about the distinctions between cloud and managed services and more willing to invest."

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Top 10 BYOD and Virtualization Market Insights

Like it or not, some enterprises have already entered a post-PC world -- where their business communication network must accommodate new user-driven choices. These include traditional applications, mobile apps, social apps and operating systems; various server architectures; and an array of mobile devices ranging from smartphones to tablets and other mobility tools. Are you experiencing this phenomenon? If not, you will soon. Moreover, this latest business technology trend has huge ramifications.

Cisco’s Internet Business Solutions Group (IBSG) conducted extensive research and analysis to uncover key insights about BYOD (“bring your own device”) and desktop virtualization trends in U.S. enterprises. The Cisco IBSG Horizons BYOD and Virtualization study surveyed 600 enterprise IT leaders from 18 industries.

The Top 10 Market Insights

Insight 1: Mobility Is Pervasive

• Seventy-eight percent of U.S. white-collar employees use a mobile device (e.g., laptop, smartphone, or tablet) for work purposes.
• Respondents indicated that 65 percent of white-collar workers in their organizations require mobile connectivity to do their jobs.
• Forty-four percent of knowledge workers telecommute at least once per week.
• Cisco IBSG estimates that telecommuting once a week saves $2,500 per employee annually.

Insight 2: Growth of Mobility Has Impacted IT Profoundly

• By 2014, the average number of connected devices per knowledge worker will reach 3.3, up from an average of 2.8 in 2012 (18 percent increase).
• On average, mobility initiatives will consume 20 percent of IT budgets in 2014, compared to 17 percent in 2012.

Insight 3: How Much Longer Will Traditional Funding Models Exist?

• Sixty-two percent of respondents’ organizations pay for both employees’ devices and their voice/data plans.
• Seventy-five percent of respondents expect the share of employee-owned devices connected to company networks to increase “somewhat” to “significantly” over the next two years.
• Forty-one percent of respondents indicated a majority of smartphones connecting to their company network are actually employee-owned.
• According to Cisco IBSG, employees are willing to invest to improve their work experience. Cisco BYOD employees, for example, pay an average of $600 for their preferred devices.

Insight 4: BYOD Is Here, and It’s Not a Bad Thing

• Eighty-eight percent of surveyed IT leaders perceive growing technology “consumerization” in the enterprise.
• Seventy-six percent consider consumerization “somewhat” or “extremely” positive for their companies.

Insight 5: BYOD Delivers Several Benefits to the Enterprise

• Among respondents, the top two perceived benefits of BYOD were improved employee productivity (more opportunities to collaborate) and greater job satisfaction.
• The benefits of BYOD vary based on an employee’s role and work requirements. Cisco IBSG estimates that the annual benefits from BYOD range from $300 to $1,300, depending on the employee’s job role.

Insight 6: BYOD Does Bring Its Share of Challenges

• Respondents cited the top challenges of BYOD as (1) ensuring security/privacy of company data and (2) providing IT support for multiple mobile platforms.
• Thirty-six percent of respondents said that their organizations’ IT departments provide full support for employee-owned devices connected to the company network, with an additional 48 percent indicating that their IT departments support selected devices. Eleven percent said that their companies tolerate employee-owned devices but don’t support them, and just 5 percent said their organizations forbid employee-owned devices.
• According to Cisco IBSG, 86 percent of BYOD costs are non-hardware-related, highlighting the importance of choosing the right governance and support models to control these costs.

Insight 7: Employees Want To Control Their Work Experience

• Employees are turning to BYOD because they want more control of their work experience, thus improving productivity and job satisfaction.
• Forty percent of respondents cited “device choice” as their top BYOD priority (the ability to use their favorite device — anywhere).
• Respondents’ second BYOD priority is the desire to perform personal activities at work, and work activities during personal time.
• Employees also want to bring their own applications to work. Sixty-nine percent of respondents said that unapproved applications — especially social networks, cloud-based email, and instant messaging — are somewhat to much more prevalent today than two years ago.

Insight 8: Desktop Virtualization Is on the Rise

• Desktop virtualization enables employees to enjoy a similar experience across a broad range of devices — from desktop and laptop PCs to smartphones and tablets. This capability is alternately referred to as virtual desktop infrastructure (VDI), hosted virtual desktop (HVD), desktop as a service (DaaS), and server-based computing.
• Eighty percent of respondents indicated that they are “very aware” of desktop virtualization, and 18 percent said they are “somewhat aware.”
• Sixty-eight percent of respondents agreed that a majority of knowledge worker roles are suitable for desktop virtualization.
• Fifty percent noted that their organization is in the process of implementing a desktop virtualization strategy.

Insight 9: Desktop Virtualization Also Poses Challenges

• While 70 percent of IT leaders recognize that half or more of their organization’s employees could benefit from desktop virtualization, they also expressed some concerns.
• Respondents’ top concern (33 percent) was data protection — ensuring that only the right people have access to sensitive company and customer data. The No. 2 concern was business continuity — the ability to continue operations under adverse conditions, such as interruptions due to natural or man-made hazards.

Insight 10: Desktop Virtualization Will Impact Much of the Business

• Desktop virtualization is already making its mark and will continue to have a significant impact on enterprise business. Survey respondents noted the following as the three areas that will benefit most from desktop virtualization: (1) business continuity, (2) employee productivity, and (3) IT costs.
• Among devices, respondents listed their top desktop virtualization priorities as laptops (81 percent), desktops (76 percent), smartphones (64 percent), and tablets (60 percent).
• Survey respondents stated that the top four job roles being targeted for desktop virtualization are (1) field-/customer-facing employees, (2) employees who handle sensitive company data, (3) employees who work from home frequently, and (4) executives.
• Desktop virtualization and BYOD are changing the way applications are provisioned to employees. For example, 35 percent of respondents said that employees can download only pre-approved applications from the company app store, while 23 percent indicated that both approved and nonstandard applications are available from the company app store.

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Market Insights on the Pending Business Tablet Invasion

Here's the scenario, you're a busy executive working away from your office and you just want to quickly research something on the Web. You turn on the company-provided notebook computer and you wait the standard 3-6 minute delay, before you can actually use it.

The corporate IT department has numerous mandatory processes that must load first -- such as virus protection, data backup, system and app software updates, etc. -- on a typical Windows system. That's often dozens of processes running at start-up, and some will consume 100 percent of the available processing power.

That automated cycle can temporarily incapacitate a notebook PC. Don't bother attempting to load a web browser while this PC start-up sequence is in motion. What's the alternative? If you have a media tablet, simply use it instead and you're on the Web in a matter of seconds.

Mobile Workers and Their Virtual Workspace

Is your company prepared for the pending business tablet invasion that will likely raise the bar of expectations for corporate mobile computing? Ready or not, this trend is already in motion. Cisco announced findings from a global survey of IT managers' perceptions about tablet form-factor mobile devices in the enterprise.

Cisco commissioned Redshift Research to perform a market study to assess attitudes, fears and hopes for media tablets in the workplace from a survey of more than 1500 IT managers and executives in the U.S., Canada, UK, France, Germany and Spain. While it's still considered a nascent market, this year we'll surely see an increase in the adoption of business-oriented tablet computing.

Key findings from the market study include:

Media Tablet Demand

• Tablets vs. smartphones: which win? Globally, IT departments report employees place one tablet request for every three smartphone requests today.
• Which countries lead? Of the countries surveyed, the US and France are tied for tops -- each report a tablet is requested by 21% of the workforce. Senior executives are most likely to be issued a tablet in the US (38%) and least likely to be issued one in the UK (27 percent).
• Who's most excited? Spain tops the list, with 90% of IT managers believing the tablet will become more popular in the next two years.
• "Uber-connected sales guys". Tablets are significantly more prevalent among salespeople in Germany (31%) than in all other countries (21% on average).

IT Manager Fears And Wants

• Tops in security concerns? The U.S., the country with the most experience managing tablets, also ranks #1 on the "security issue": 75% of US IT managers said new rules must be established around security and device usage.
• What about app access? Nearly half (48%) of all IT managers surveyed agree that access to company applications should be restricted for all employees. Canada and UK were the top countries in wanting to see restricted access on tablet form-factor devices (55% and 56 %, respectively).
• Custom apps? IT managers universally agree that custom tablet applications would benefit their business.
• Top "want list" features? Globally, three-quarters of IT managers indicated email and document sharing are "must haves". About half agreed or strongly agreed that these are desirable: video conferencing, IM, access to company databases and seamless synchronization with other business devices.

Bring Your Own Device (BYOD)

• Turning a blind eye to BYOD. Globally, 48% said their company would never authorize employees to bring their own devices to work, yet 57% agreed that some employees use personal devices without consent.
• 51% of the respondents reported the number of employees bringing their own devices to work is on the rise.
• Using personal devices without consent was highest in the US (64%) and lowest in Germany (49%).
• Access to company servers was highlighted as a "huge problem" of the "bring your own device" to work phenomena as was lost/stolen devices (64% globally).
• Globally, 44% say that handling BYOD issues diverts IT attention from other important projects.

"Mobile workers and virtual workspaces are here to stay -- but so are the demands on IT to continue to ensure enterprise-grade security, manageability and interoperability. 2012 promises to be an exciting year and IT leaders are a critical component in unleashing innovation and enabling organizations to take advantage of the next wave of business growth and opportunity. Cisco is keenly focused on helping its customers navigate the post-PC era and transform their business," said Tom Puorro, director of product management, IPCBU, Cisco Systems.

Survey respondents were from a wide variety of global companies and are either primary IT decision makers or play a key role in the procurement process. Sole proprietors were excluded from the study. Field work was conducted in late 2011.

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Cloud Storage Spending to Reach $22.6 Billion by 2015

Cloud computing demand will drive new IT spending over the next five years, as public cloud service providers and the adopters of private cloud solutions invest in the supporting infrastructure, according to a recent market study by International Data Corporation (IDC). Therefore, the leading managed cloud service providers have been busy expanding their service delivery platforms.

Overall spending by public cloud service providers on storage hardware, software, and professional services will grow at a compound annual growth rate (CAGR) of 23.6 percent from 2010 to 2015, while enterprise spending on storage for the private cloud will experience a CAGR of 28.9 percent. By 2015, combined spending for public and private cloud storage will be $22.6 billion worldwide.

"Despite current economic uncertainties, IDC expects cloud service providers -- both public and private -- to be among the most expansive spenders on IT products and services as they continue to build out their facilities worldwide and expand their service options," said Richard Villars, vice president, Storage Systems & Executive Strategies at IDC.

According to the IDC assessment, the most significant driver of storage consumption over the past three years has been the emergence of public cloud-based application and infrastructure providers. Many of these service providers act as content depots -- gathering, organizing, and providing access to large quantities of digital content.

Meanwhile, other cloud-based service providers have emerged with a focus on delivering IT infrastructure and applications in an "as a service" model. Collectively these companies have undertaken massive storage buildouts as they have expanded their service offerings, entered new markets, and extended their geographic reach.

In parallel to the expansion of the public cloud, many organizations have started to deploy their own private clouds for application, compute, and archival storage. Some of these private cloud deployments -- government and research sites -- are comparable in scope and complexity to public cloud environments, while others are limited in scope.

 Five information requirements are driving storage demands:

• Enabling more efficient delivery of information/applications to Internet-based customers.
• Reducing upfront infrastructure investment levels (i.e., cutting the cost and time associated with deploying new IT and compute infrastructure).
• Minimizing internal IT infrastructure investment associated with "bursty" or unpredictable workloads.
• Lowering and/or distributing the ongoing costs associated with long-term archiving of information.
• Enabling near-continuous, real-time analysis of large volumes and wide varieties of customer-, partner-, and machine-generated data (Big Data).

To meet these diverse requirements, IDC believes that organizations will continue to demand access to low-cost storage capacity -- plus a growing range of complementary advanced data transformation, security, and analytics solutions.

"The challenge facing the storage industry will be to balance public cloud service providers' demand for low-cost hardware while boosting demand for advanced software solutions in areas such as object-based storage, automated data tiering, Big Data processing, and advanced archiving services," noted Villars.

"Big Data developments will be perhaps the most critical new marketplace for storage solutions providers in the coming decade. Providing a strong portfolio of complete Big Data solutions -- hardware, software, and implementation services -- will be a high priority to succeed. Similarly, a strong portfolio of active archival storage solutions will be a critical differentiator for private content or archive cloud deployments."

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Cloud Services are Instrumental to IT Transformation

According to the latest market study by International Data Corporation (IDC), cloud computing will continue to reshape the business technology landscape over the next five years -- as spending on public cloud services expands at a CAGR of 27.6 percent, from $21.5 billion in 2010 to $72.9 billion in 2015.

That said, apparently the trend and resulting impact of cloud services will extend well beyond information technology (IT) spending. Managed cloud services are a critical component in a much larger transformation that IDC expects will be instrumental in driving IT industry growth for the next 25 years.

"Cloud services are interconnected with and accelerated by other disruptive technologies, including mobile devices, wireless networks, big data analytics, and social networking," said Frank Gens, senior vice president and chief analyst at IDC.

This collective group of technologies are merging into the industry's third major platform for long-term growth. Similar to the mainframe and PC eras, managed cloud services promises to radically expand the applications of IT infrastructure, resulting in a variety of unified service delivery solutions.

As a critical component to the third platform, cloud services represent a strategic growth area for traditional managed IT services and broadband service providers.

A Pathway Through the Disruptive Transformation

With spending for public IT cloud services growing at more than four times the rate of the worldwide IT market as whole, IDC expects one of every seven dollars spent on packaged software, servers, and storage offerings in 2015 will be related to the public cloud model.

Moreover, the eventual winners of the ongoing competition within the managed cloud service delivery marketplace will likely be the new business productivity trend leaders.

Highlights from IDC's latest market study include:

• In 2015, public cloud services will account for 46 percent of net new growth in overall IT spending in five key product categories -- applications, application development and deployment, systems infrastructure software, basic storage, and servers.
• Software-oriented cloud services (SaaS) will account for roughly three quarters of all spending on public cloud IT services throughout the forecast. This includes all three software-oriented cloud categories, not just applications. Spending on hardware-oriented cloud services (servers and storage) will be largely driven by SaaS providers building out their infrastructure.
• The United States will dominate overall spending throughout the forecast period, with nearly 50 percent of all public IT cloud services revenues coming from the U.S. in 2015. But regions outside the U.S. will show much stronger growth as cloud services adoption accelerates.
• In particular, IDC found that there are more cloud services vendors and greater end user spending in Asia-Pacific and Western Europe than previously thought.
• IDC defines public IT cloud services as those offerings designed for, and commercially offered to, a largely unrestricted marketplace of potential users. The forecast does not include revenue from private cloud deployments, which are dedicated to a specific customer.
•  While private clouds provide businesses with the ability to specify access limitations and the level of resource dedication beyond what is currently available in public cloud offerings, IDC's expectation is that public clouds will mature and eventually incorporate many of the capabilities  -- particularly security and availability -- that make private clouds a more attractive option today.

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Managed Services Gaining Global Momentum

Savvy business leaders are increasingly turning to managed services to enable them to focus more attention on their core competencies, according to the latest market study by Pyramid Research. Managed services free up valuable IT and networking resources, decrease staffing needs and enable investment in activities that differentiate companies from their competition.

That said, the primary adoption driver is the current state of the global economy. As business leaders everywhere face increased financial pressure, they’re looking to managed services to offload their capital expense burden and improve operational efficiencies.

Analysts typically define managed network services as the management and monitoring of telecom infrastructure or applications by a third party -- either with equipment at the customer’s premise or hosted in a managed services provider (MSP) data center.

Responding to the Growing Global Demand
MSPs have responded to the increasing demand for new managed cloud services with a dramatic increase in investment to grow their managed services portfolios to include different types of out-tasked IT services for their customers. They are creating additional services that can be layered on top of the basic transport network offerings.

To learn more about the current market potential, Pyramid Research conducted an independent survey of more than 200 IT professionals from around the world to determine the types of managed services they’re using.

Primary conclusions from the market study include:

• Executives polled were willing to spend a large portion of their IT budgets -- between 10% and 20% -- on network-centric managed services, as the providers continue to prove the value and reliability of their offerings.
• The majority of enterprises -- almost 60% -- already use a managed service and have been doing so for between one and four years.
• Europe still has had the highest adoption of managed services -- driven in large part by the challenges of managing and maintaining business across multiple borders. However, the economic recession drove more North American companies to adopt managed services -- to lower costs and improve employee productivity.
• Additionally, emerging markets, such as those in Africa and Latin America, are preparing for managed services -- especially as broadband network access becomes more established.
• Multinational corporations and large enterprises have the most uptake in network-centric managed services, with SMEs now also looking for proven solutions that lower their costs.
• IT managers are applying a significant portion of their budget to managed services. Almost 25% of enterprises spend between $10,000 and $50,000 annually. Additionally, 26% of enterprises allocate between 10% and 20% of their IT budgets for managed services.
• The types of managed services that MSPs are providing are growing at a phenomenal rate. They manage everything from unified communications (UC) applications, to network security, to network connectivity and telepresence video collaboration services.
• Service trends over the next 18-24 months include managed machine-to-machine (M2M) services, such as automotive telematics, smart utility metering, fleet management, mobile health, point-of-sale transactions, mobile computing, wireless alarms, remote monitoring and wireless local loop (WLL).
• Growth is expected to continue throughout the U.S. and Europe -- especially in Eastern European countries, over the next 18 months. Latin America and Asia will provide continued expansion of these managed services.

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