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Posts tagged ‘cloud computing landscape’

Oct 22

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The Top 100 Enterprise Analytics Startups Of 2014

public-cloud-computing-forecast-2011-2016With the potential of removing legacy IT silos and freeing up valuable data to gain greater insights into their operations, enterprises continue to invest heavily in analytics.

Providing powerful analytics tools to business analysts who can get to work immediately on complex challenges instead of having to wait for ITs’ often over-committed resources is also driving analytics market growth. The better a business unit or division gets at understanding their own business, the faster they change their future.

Analytics Are Streamlining Industry Value Chains

Across every area of an enterprise, from supply chains, quality, manufacturing, marketing, services and pricing, analytics are making an impact daily.  IDC forecast that the advanced and predictive analytics software market will grow from $2.2B in 2013 to $3.4B in 2018, attaining a 9.9% compound annual growth rate (CAGR).  Wikibon’s excellent analysis of the Big Data market projects a $28.5B market in 2014, growing to $50.1B in 2015. For additional forecasts please see my post Roundup Of Analytics, Big Data & Business Intelligence Forecasts And Market Estimates, 2014.

Admit It: Analytics Startups Are the Sexiest Of All

The field of analytics is proliferating with entirely new approaches to solve very challenging, difficult problems, removing the barriers that held business analysts and the divisions they work for from accomplishing more.

That’s what makes analytics startups the sexiest of all. With the insights these companies are capable of delivering you can completely change your approach to marketing, selling, service, supply chains, pricing, service and over time reach an entirely new level of performance. There are many excellent startups in this arena and I’ve been tracking many of them out of personal interest for years.

Tracking Analytics Startups

Having seen just how much pain there is in enterprises trying to get the data they need to better manage their business units, divisions and departments, I’ve tracked many of the analytics startups mentioned in the list below.  Using manually-based methods to track their funding rounds and momentum in the market proved incomplete.

To gain a greater insight into analytics startups I signed up for a free first month trial of Mattermark (opt in).  Mattermark uses a combination of artificial intelligence and data quality analysis to provide insights into over 500,000 companies, over 125,000 with employee data, and over 90,000 funding events.  It’s a fascinating company that has created many new metrics for tracking momentum of startups on specific metrics and key performance indicators (KPIs) including their own Mattermark score.  This score is not meant to provide guidance on which startup to invest in.  Rather it’s a measure of momentum across the metrics and KPIs that Mattermark measures.   Their service is easy to use, powerful in the insight it delivers, and produced the following list of 100 enterprise analytics startups, ranked by total funding in the table below.  You can download the table here in Microsoft Excel format as well.

Top 100 Enterprise Analytics Startups Infographic

 

May 4

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Software Firms Now 42% Of Venture Capital Invested In 2014

Cloud Computing SaaS Forecasts Just over $4B was invested in software deals by venture capitalists (VCs) during Q1, 2014, four times as much as biotechnology.

Software deals netted out 42% of all dollars invested in the first quarter of 2014, with biotechnology receiving 11%.  VCs invested $816M in IT Services or 9% of all dollars, making this the third largest investment category.  Interest in IT Services continues to accelerate, with dollars invested in this category increasing 33% compared to the prior quarter.

These findings are from the latest edition of The MoneyTree Report, a quarterly study of venture capital investment in the United States produced by PricewaterhouseCoopers and the National Venture Capital Association (NVCA) using Thomson Reuters data.  You can find the full data sets of the study here in Microsoft Excel format.  The MoneyTree Report Q4 2013/ Full-year 2013 is also available in PDF form here and there is no opt-in to download it.

Take-Aways From The Study

  • A total of $9.5B in 951 deals was invested in the first quarter of this year, up 12% in dollars and down 14% in the number of deals compared to the 4th quarter of 2013.  In the previous quarter, a total of $8.4B was invested in 1,112 deals.
  • In 2013, $11B (37%) of all venture investments were in software, $4.6B (16%) in biotechnology and $2.96B (10%) were in Media and Entertainment.  The following graphic shows the distribution of amounts invested by industry in 2013.  Please click on the graphic to expand for easier reading.

Distribution of amount invested by industry 2013

  • In the first quarter of 2014, software companies also received three times the number of deals of the next closest industry category, Media & Entertainment.  46% or 126 software deals were completed in Q1, compared to 40 in Media & Entertainment. Biotechnology companies were third with 8% or 22 deals.  The following graphic provides a comparison of deals by industry for Q1, 2014.  Please click on the graphic to expand it for easier reading.

distribution of venture capital deals Q1 2014

  • Kleiner Perkins Caufield & Byers, First Round Capital, New Enterprise Associates, Inc. and Andreessen Horowitz LLC completed the most venture capital deals in 2013, as the graphic below shows.  Please click on the graphic to expand for easier reading.

distribution of deals by vc firm in 2013

  • Software’s dominance in Q1, 2014 relative to other industries is evident in the following graphic, showing 42% of dollars invested followed by biotechnology (11%) and IT Services (9%).  The study data shows nine of the 17 industries are shrinking it terms of venture investments.  Telecommunications is down 68%, Networking and Equipment down 47% and semiconductors, down 17%.  Please click on the graphic to expand it for easier reading.

distribution of amounts invested by industry Q1 2014

  • Overall first-time financing decreased 25% to $1.2B in Q1, with a corresponding 24% drop in the number of companies to 271.
  • 48% of dollars invested during Q1 into companies receiving venture capital for the first time are in the software industry.  46% of the deals to 126 companies who captured $571M in Q1 lead to this industry dominating first sequencing investments.
  • Top regions where startups received funding in Q1 include Silicon Valley (50% of all VC funding), New England (11%) and the New York Metro Area (10%).  The Los Angeles/Orange County area was fourth with 5% of all venture funding in Q1, 2014.

Mar 29

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45% of Global Enterprises Are Running Production-Level Cloud Apps Today

cover graphicMicrosoft’s latest study shows enterprises’ pace of cloud computing adoption continues to accelerate.  Nearly half of the respondents (45%) report they have cloud-based applications running in production environments.  58% report that they selectively target new applications and projects for cloud computing.

Microsoft commissioned 451 Research to complete one of the most comprehensive global surveys to date of hosting and cloud computing, titled Hosting and Cloud Go Mainstream releasing the results earlier this month. The 74 page slide deck of results provides a wealth of insights into the current and future state of hosting and cloud computing.  451 Research constructed the methodology to include interviews with 2,000 companies and organizations of all sizes from 11 countries, with more than a third of respondents coming from the United States.  Microsoft and 451 Research provided the slides showing the result of screener questions, which provides a useful context for analyzing the survey results.

Here are the key take-aways from the study:

  • 45% of enterprises globally are running production-level cloud computing applications today.  North America and Asia have the greatest percentage of enterprises reporting broad implementation of production cloud-based applications (17% each).  North America has the greatest percentage of enterprises in the discovery and evaluation phase of cloud computing adoption at 29%.

cloud computing adoption by region

  •  58% of global enterprises are selectively target new applications for cloud computing, with 18% heavily relying on cloud computing for new projects.  The following graphic shows the distribution of organizations’’ approaches to using cloud computing for new applications or IT projects.

New Apps By Region

  • SaaS (71%) and Hosted Infrastructure Services (69%) are the two most common IT services currently purchased today, with 14% growth forecasted in each by 2016. The fastest growing category is Platform-as-a-Service (PaaS), with 37% purchasing these services today projected to grow another 26% in two years.

current future it services

  • SaaS is most prevalent in enterprises with over 500 employees, and Hosted Infrastructure Services, in government and education.  Please see the graphic below for the distribution of responses by IT service and organization type.

 

current it services by company size

  • Spending on hosted private clouds will increase from 28% of spending today to 32% in 2016, with traditional dedicated infrastructure services dropping from 48% to 42%.

Hosted Infrastuctrure Services

  •  The majority of SaaS users are employees (45%) followed by businesses (which could be interpreted as suppliers and the broader supply chain) (22%), consumers (18%) and business partners (including distribution channels (14%).

primary application users

 

  • Telephone conversations with customer support specialists is the most valuable form of communication (just over 60%) across all support channels.  It is also the most preferred channel for SaaS support.

valuable forms of communication

  •  Business applications (17%), databases (14%) and e-mail 12%) are the top three application spending categories today in hosted and cloud applications.  The following graphic breaks out spending by hosting and cloud configuration.

hosted and cloud applications

  • Having a well-defined architecture for security (7.7 out of 8.0), understanding who the end-users are (7.6) and train users to be cautious with access & security (7.5) in addition to having a well-defined architecture for performance (7.5) are the three top best practices for cloud computing projects.

best practices cloud computing projects

  • 44% of enterprises globally have “shadow IT”, meaning business units are spending their own budget on cloud computing projects outside of the IT approval processes.  The following graphic provides the breakdown by type of organization included in the survey.

shadow it

  •  87% of respondents globally would recommend cloud computing to a peer or colleague and 13% would not. When asked why or why not, respondents most often mentioned a good experience and better service/it works (approximately 17%), followed by improving costs/cost effective/cheaper (approximately 16%).  Security issues and concerns (25%) and uncertainty/it’s too new (approximately 16%) are the reasons for not recommending cloud computing.

recommend cloud computing

Mar 23

Roundup Of Cloud Computing Forecasts And Market Estimates, 2014

By 2018, CIOs expect it to play a critical role in enabling their organizations strategic vision according to IBM’s latest study, Moving from the back office to the front lines – CIO insights from the Global C-suite Study. The IBM study and recent cloud computing forecasts and market estimates illustrate how quickly CIOs’ roles are changing.

CIOs in high performance enterprises are increasingly seeing the world much more like their CEO counterparts.  Both are now focusing more on how cloud computing can improve customer engagement and operational performance while anticipating market and macro-economic factors.  IBM’s study provides a glimpse into their Institute for Business Value’s 1,600 face-to-face conversations with CIOs from 70 countries and 20 industries worldwide.

Here are the key take-aways from the report including an infographic summarizing key points of the study:

  • Cloud computing has rapidly accelerated from 30% of CIOs mentioning it as a crucial technology for customer engagement in 2009 to 64% today.
  • 67% of CIOs IBM interviewed are actively looking into how cloud technologies can better serve and collaborate with customers.
  • 84% of CIOs are focusing on mobility solutions to support closer customer engagement, 83% are evaluating business analytics and optimization and 64%, cloud computing.   The following graphic shows a comparison of how priorities have changed between 2009 and 2013.

ibm study

  • CIOs in outperforming enterprises are nearly twice as likely as their peers (59% versus 31% for underperformers) to have a cohesive strategy for uniting the digital and physical elements of their businesses.  One respondent CIO from a banking firm in The Netherlands stated that “We want to create an integrated, 24/7 customer experience across channels and services.”  The following infographic summarizes key points of the analysis.

infographic on CIOs new boss

  • Cloud-related tech spending by businesses is forecast to triple from 2011 to 2017 according to IHS Technology.  By 2017, enterprise spending on cloud computing will amount to a projected $235.1B, triple the $78.2B spent in 2011 according to the research firm’s analysis.  In 2014, global business spending for infrastructure and services related to the cloud will reach an estimated $174.2B, up 20% from the amount spent in 2013. Source: Cloud- Related Spending by Businesses to Triple from 2011 to 2017.  

cloud spending soars

  • Centaur Partners predicts that total SaaS revenue will shift from just over 10% of the total enterprise software market in 2010 to just over 16% by 2015, and predict that SaaS and cloud-based business application services revenue will have grown from $13.5B in 2011 to $32.8B in 2016.  The following graphic is from their latest SaaS Market Overview presentation.

centaur partners

cloud focus of investment

Cisco cloud traffic

  • Bain & Company predicts that direct spending on hardware, software and services could top $70B by 2017 based on the proliferation of the Internet of Things (IoT).  The research brief, Is your company ready for the Internet of Things? predicts that companies that can capitalize on mobility, analytics and cloud computing will have the highest probability of success.  Bain & Company also presented their taxonomy of market growth by enterprise spending category below, projecting software and applications will generate $180B in sales by 2017.

Bain & Company Taxonomy

  • IDC is predicting that the cloud software market will surpass $75B by 2017 attaining a five year compound annual growth rate of 22% in the forecast period. IDC also found that current organizations using the cloud expect to spend 53.7% of their IT budget on cloud-based applications and platforms in the next 24 months.  Major benefits of the cloud for IT operations include reducing the size of the IT budget, improving IT staff productivity, and simplifying and standardizing IT infrastructure.  For other departments, benefits include improved resource utilization, enabling business units to control IT solutions more directly, and launch revenue generating services faster with more efficient time-to-market strategies. These findings are from the Cisco infographic based on IDC research data titled Midsize Enterprises Leading The Way With Cloud Adoption.

Accenture infographic

Mar 3

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The Best Cloud Computing Companies And CEOs To Work For In 2014

Job Growth2014 continues to be a year marked by the accelerating hiring cycles across nearly all cloud computing companies.

Signing bonuses of $3K to $5K for senior engineers and system design specialists are becoming common, and the cycles from screening to interviews to offers is shortening.  The job market in the cloud computing industry is leaning in favor of applicants who have a strong IT background in systems integration, legacy IT expertise, business analysis and in many positions, programming as well.

One of the most common questions and requests I receive from readers is who the best companies are to work for.  I’ve put together the following analysis based on the latest Computer Reseller News list The 100 Coolest Cloud Computing Vendors Of 2014.  

Using the CRN list as a baseline to compare the Glassdoor.com scores of the (%) of employees who would recommend this company to a friend and (%) of employees who approve of the CEO, the following analysis was completed.  You can find the original data here .  There are many companies listed on the CRN list that don’t have than many or any entries on Glassdoor and they were excluded from the rankings below.  You can find companies excluded here. If the image below is not visible in your browser, you can view the rankings here.

results

The highest rated CEOs on Glassdoor as of February 23rd include the following:

  • Jeremy Roche of FinancialForce.com (100%)
  • Robert Reid, Intacct (100%)
  • Randy Bias, Cloudscaling (100%)
  • Sridhar Vembu, Zoho (98%)
  • James M. Whitehurst, Red Hat (96%)
  • Larry Page, Google (95%)
  • Christian Chabot, Tableau Software (95%)
  • Aneel Bhusri, Workday (94%)
  • Bill McDermott & Jim Hagemann Snabe, SAP (93%)
  • Marc Benioff, Salesforce (93%)
  • David Friend, Carbonite (93%)

Feb 14

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Why Cloud ERP Adoption Is Faster Than Gartner Predicts

200393880-001A recent study completed by Gartner titled Survey Analysis: Adoption of Cloud ERP, 2013 Through 2023 published on January 24, 2014, written by Nigel Rayner advises CIOs and application leaders of financial services institutions to “consider cloud ERP as a potential replacement for aging core ERP systems that are out of support or running on an old technology platforms (such as mainframes).“

The methodology is based on a survey of Gartner Research Circle members from North America, EMEA, APAC and Latin America from companies that range in size from $10M to $10B.

Key take-aways of the study including the following:

  • Including the 2% that already have core ERP in the cloud, a total of 47% of organizations surveyed plan to move their core ERP systems to the cloud within five years. This is because their ERP requirements tend to be focused around administrative ERP (financials, human capital management and procure-to-pay) where there is a wider range of cloud options (compared with manufacturing).
  • In aggregate, 30% of respondents say that the majority of their ERP systems will be on-premises for the foreseeable future as can be seen from the following graphic.

cloud adoption pie chart

  • 30% of organizations surveyed said they planned to keep the majority of their ERP systems on-premise for the foreseeable future.  Manufacturing organizations dominated this survey segment.

Why Cloud ERP Is Accelerating Faster Than Gartner Predicts

Two-tier ERP is the Trojan Horse of cloud ERP.  If Gartner had asked their respondents about if and how cloud-based ERP systems are being considered and used in two-tier ERP strategies globally, their survey and previous forecasts would have been significantly different.

From researching and working with manufacturers where two-tier ERP strategies make perfect sense for extending their legacy ERP systems to move into new markets, the following key take-aways emerge:

  • Achieving faster time-to-market while reducing cost of quality.  This is quickly turning into a year of transition for many supply chains, with the shift most noticeable in aerospace and defense.  Tighter project schedules driven by reduced budgets, coupled with more aggressive launch schedules is making this the year of the agile supplier.  Cloud-based ERP systems are essential to suppliers in this industry especially.
  • Legacy ERP systems lack scalability to support 21rst century compliance. One CIO who is a good friend jokingly refers to the legacy ERP systems populating each division of the manufacturing company he works for as fuel for his silos of excellence.  His point is that legacy ERP systems don’t have the data models to support the current quality management and compliance requirements corporate-wide and are relegated to siloed roles in his organization.  Cloud-based applications, specifically designed for ISO 9100, AS9100 Rev. C can do what legacy systems can’t, which is span across the aerospace manufacturer’s entire operations.
  • SaaS-based manufacturing and distribution software will increase from 22% in 2013 to 45% by 2023.  According to MintJutras, a leading research and advisory firm tracking ERP trends, a survey completed in 2013 shows SaaS-based applications will steadily grow from 22% of all manufacturing and distribution software installed to 45% within ten years.  The catalyst for much fo this growth will be two-tier ERP system adoption.
  • Microsoft’s New CEO knows the enterprise and cloud’s role in it. Satya Nadella has the daunting task of bringing innovation back into Microsoft.  As Anshu Sharma writes in his blog post today Satya Nadella: Microsoft, Coffee and the Relevance Question provides an excellent analysis of the challenges and paradoxes faced by the new Microsoft CEO.  It’s common knowledge in the Microsoft Partner community that the company runs one of the largest two-tier ERP system architectures in IT today, with an SAP R/3 instance in headquarters and Microsoft Dynamics AX running in each subsidiary.
  • All cloud ERP providers including Microsoft intend to monetize two-tier as much as they possibly can, architecting their respective Cloud OS strategies and enterprise suites to capitalize on it. Microsoft released an overview of their Cloud OS strategies in the following presentation, which provides a thorough overview of their perspective of the hosting market and how it relates to their apps business. Also included is the following graphic, Cloud OS: Innovation at Scale.  All of the factors taken together will drive up adoption of Microsoft Dynamics AX 2012 and streamline two-tier enterprise sales across all cloud ERP providers.  Last year at Microsoft Worldwide Partner Conference the announcement was made that Microsoft Dynamics AX 2012 would be available on Windows Azure in July, 2014.

cloud scale

  • Mobility is unifying the manufacturing shop floor to the top floor faster than anyone thinks.  In traditional ERP systems mobile platforms are most often used for material handling, warehouse management, traceability, quality management, logistics and service tracking. From the discussions I’ve had with CIOs and a few CEOs of manufacturing companies, there’s a high level of interest in analytics, alerts and approvals on Android and Apple tablets.  These apps and the speed of results they deliver are the new corporate bling. Intuitive, integrated and fast, these mobile apps make it possible for senior managers to check up on operations for wherever they are globally, in addition to approving contracts and being notified of events via alerts.  For Gartner’s assessment of cloud ERP to have been complete in this survey, mobility also needed to be covered

Dec 30

Roundup Of Cloud Computing And Enterprise Software Predictions For 2014

cloud computing predictions 2014 Alan Kay’s saying that the best way to predict the future is to create it resonates through the best cloud computing and enterprise software predictions for 2014. Constraints that held start-ups back from delivering sophisticated new apps and services are disappearing fast.  The dynamics of one of my favorite books, The Innovator’s Dilemma by Clayton Christensen, are in full force across the cloud and enterprise landscape.

There are many predictions being generated right now and instead of writing yet another set,  I’m providing a listing of those that are the most interesting and thought-provoking. They are listed below:

  • 10 Cloud Computing Predictions for 2014 – In-depth analysis of ten predictions including how more companies will realize they are really in the software business, private cloud computing having a moment of truth and continued adoption of cloud brokerages.  This set of predictions is an interesting read and provides useful insight.  I’d just add that as application developers go, so goes an industry, a point Bernard Golden refers to in this post.
  • Analytics Eats the World in 2014 – George Mathew of Alteryx is one of the most driven people I’ve ever met about analytics programming and development.  He’s very focused on breaking down constraints that hold analysts back from getting more value from their data. His predictions provide insight into how business analysts’ roles are changing based on rapid advances in analytics app development, model development and use.
  • Changing Cloud Scapes in 2014 – Jeff Kaplan, Managing Director of THINKstrategies provides ten insightful predictions regarding the continued adoption of cloud computing platforms in the enterprise.  His fourth prediction, “Although horizontal cloud solutions will continue to experience significant growth, vertical market solutions aimed at specific industries will grow even more rapidly” is starting to emerge today.  The recent success of Veeva Systems supports his prediction and points to next year seeing more vertical market solutions being successfully launched.
  • Cloud computing experts forecast the market climate in 2014 – Excellent summary of seven cloud computer experts’ predictions for 2014 including Mark Eisenberg, Roger Jennings, Paul Korzeniowski, David S. Linthicum, Tom Nolle, Dan Sullivan and Mark Szynaka.  Highlights include IDC analysts predicting the “Over the 2013 to 2017 forecast period, public IT cloud services will have a compound annual growth rate [CAGR] of 23.5%, five times that of the IT industry as a whole,” and PaaS will lead IaaS and SaaS with a CAGR of 29.7%. What’s useful about these set of predictions is the breadth of expertise reflected in market statistics, market and technology projections and insights shared.
  • Cloud Computing Predictions for 2014: Cloud Joins The Formal IT Portfolio – James Staten of Forrester Research has compiled an excellent series of predictions for the year with emphasis on security and SaaS becoming the de facto choice for new applications.  While he hasn’t quoted adoption figures of SaaS relative to on-premise, he does point out that Forrester believes HCM, CRM and collaboration will be the leading categories of SaaS apps in 2014.
  • My One Big Fat Cloud Computing Prediction for 2014 – I have been following the industry analysis, writing and research of Joe McKendrick for years based on the excellent insight he provides.  Joe predicts that cloud computing is set to become mainstream computing, period.  He cites Cisco’s research showing the majority of data center will be cloud-based and shares his perspective of the market.  Joe has an innate sense of how enterprises adopt and use technology and this post reflects that expertise.
  • SaaS predictions for 2014 – Chris Kanaracus is predicting that multitenancy will fade away as a major concern in SaaS, geographic depth of coverage will accelerate with cloud vendors announcing new data center openings around the world, and more vertical market adoption of SaaS.  He also prefaces his predictions with the Gartner forecast for SaaS (software as a service) quoting their figures of the total market will toping $22 billion through 2015, up from more than $14 billion in 2012.
  • Top Predictions about Software Companies in 2014 – In-depth analysis and predictions of which companies are going to be the most interesting to watch in 2014 and predictions regarding the enterprise software landscape.  This post provides a great overview of how industry veterans see enterprise software changing as a result of cloud computing as well.
  • Troubling, Challenging 2014 ERP Predictions – Brian Sommer’s predictions are the most thought-provoking and honest of any written so far this year. He writes “for an ERP vendor to sell CX (customer experience) software and then mistreat their own customers so badly is more than ironic (or moronic). It’s a death wish.  Yet, it happens.”  If there is only one set of predictions you read from this list, be sure to read this set.
  • What Should CMOs Do In 2014? IDC’s Top Ten Predictions – Gil Press provides in-depth analysis of IDC’s predictions of how the role of CMO will change in 2014.  He’s summarized the key points of the recent webinar including market forecasts from IDC, providing his insight and expertise in this post.  IDC is predicting that digital marketing investment will exceed 50% of total program budget by 2016, up from 39% in 2013 and that by the end of 2014, 60% of CMOs will have a formal recruiting process for marketers with data skills.

Nov 10

Cloud Predictive Analytics Most Used To Gain Customer Insight

AnalyticsUsing analytics to better understand customer satisfaction, profitability, retention and churn while increasing cross-sell and up-sell are the most dominant uses of cloud-based analytics today.

Jim Ericson and James Taylor presented the results of Decision Management Solutions’ cloud predictive analytics survey this week in the webinar Predictive Analytics in the Cloud 2013 – Opportunities, Trends and the Impact of Big Data.  The research methodology included 350 survey responses, with a Web-based survey used for data collection.  The survey centered on the areas of pre-packaged cloud-based solutions, cloud-based predictive modeling, and cloud deployment of predictive analytics.  You can see a replay of the webinar at this link.

Key takeaways of the study results released during the webinar include the following:

  • Customer Analytics (72%), followed by supply chain, business optimization, marketing optimization (57%), risk and fraud (52%), and marketing (58%) are the areas in which respondents reported the strongest interest.
  • When the customer analytics responses were analyzed in greater depth they showed most interest in customer satisfaction (50%) followed by customer profitability (34%), customer retention/churn (32%), customer management (30%), and cross-sell/up-sell (26%).
  • Adoption was increasingly widespread and growing, with over 90% of respondents reporting that they expected to deploy one or more type of predictive analytics in the cloud solution.
  • Industries with the most impact from predictive analytics include retail (13% more than average), Financial Services (12%) and hardware/software (4%). Lagging industries include health care delivery (-9%), insurance -11%) and (surprisingly) telecommunications (-33%).  The following graphic illustrates the relative impact of cloud-based predictive analytics applications by industry.

Adoption of Cloud-based Predictive Analytics by Industry

  • The most widespread analytics scenarios include prepackaged solutions (52%), cloud-based analytics modeling (47%) and cloud-based analytic embedding of applications (46%).  Comparing the 2011 and 2013 surveys showed significant gains in all three categories, with the greatest being in the area of cloud-based analytic modeling.  This category increased from 51% in 2011 to 75% in 2013, making it the most likely analytics application respondents are going to implement this year.

Comparison of Analytics Applications Most Likely To Deploy, 2011 versus 2013

  • 63% of respondents report that when predictive analytics are tightly integrated into operations using Decision Management, enterprises have the intelligence they need to transform their businesses.

Impact of Predictive Analytics Integration Across The Enterprise

  • Data security and privacy (61%) followed by regulatory compliance (50%) are the two most significant concerns respondent companies have regarding predictive analytics adoption in their companies.  Compliance has increased as a concern significantly since 2011, probably as more financial services firms are adopting cloud computing for mainstream business strategies.

Concerns of Enterprises Who Are Using Cloud-based Predictive Analytics Today

  • Internal cloud deployments (41%) are the most common approach to implementing central cloud platforms, followed by managed vendor clouds (23% and hybrid clouds (23%). Private and managed clouds continue to grow as preferred platforms for cloud-based analytics, as respondents seek greater security and stability of their applications.  The continued adoption of private and managed clouds are a direct result of respondents’ concerns regarding data security, stability, reliability and redundancy.

Approach To Cloud Deployment

  • The study concludes that structured data is the most prevalent type of data, followed by third party data and unstructured data.
  • While there was no widespread impact on results from Big Data, predictive analytics cloud deployments that have a Big Data component are more likely to contribute to a transformative impact on their organizations’ performance.  Similarly those with more experience deploying predictive analytics in the cloud were more likely to use Big Data.
  • In those predictive analytics cloud deployments already operating or having an impact, social media data from the cloud, voice or other audio data, and image or video data were all much more broadly used as the following graphic illustrates.

Which Data Types Deliver The Most Positive Impact In A Big Data Context

Oct 6

451 Research Summit: Enterprises Competing With Digital Infrastructure & Cloud Computing

bellagio1Enterprises are defining their own cloud strategies, their own way, ignoring vendor hype and requiring metrics that reflect security (61%), mean-time-to-recover from outages (57%), number of data center outages (51%).

This and many insights were gained from attending the 451 Research Hosting and Cloud Transformation Summit at the Bellagio Resort & Casino in Las Vegas last week. 451 Research provided a free pass to the event but did not cover travel, hotel or meals.

What’s refreshing about 451 Group’s conferences is that each of their companies including 451 Research, Uptime Institute, and Yankee Group rely on solid methodologies to research their coverage areas and markets. This results in presentations that are packed with insight and are based on a solid foundation of interviews and research.  I had a chance to catch up with SoftLayer’s Lance Crosby, Simon West and Andre Fuochi for an update on how the IBM acquisition is going, which is summarized in this post as well.  The slides shown are from Michelle Bailey, Vice President, Datacenter Initiatives and Digital Infrastructure’s excellent presentation given at the conference.

The following are the key take-aways from the summit:

  • Enterprises are defining their own cloud strategies, their own way, ignoring vendor hype and requiring metrics that reflect security (61%), mean-time-to-recover from outages (57%), number of data center outages (51%). When asked which metrics beyond Service Level Agreements (SLAs) service providers should report, respondents to the 451 Research survey provided the following insights, shown below:

  • The top three SaaS applications in two years will be for the enterprise, business support, and database platforms per 451 Research’s latest survey:

  • Infrastructure-as-a-Service (IaaS) growth is critical to off-premises hosting deployments succeeding in the next two years, as the following graphic illustrates:

  • 80%of enterprises would experience a severe impact to their operations if there was a cloud outage of just a day which make security and availability must-haves for any hosting and cloud services provider.  The following graphic breaks down the impact of service provider outage by time:
  • Worldwide Infrastructure-as-a-Service (IaaS) is projected to grow from $4.475B in 2013 to $10.23B in 2016, with Platform-as-a-Service (PaaS) growing from $2.23B in 2013 to $5.24B in 2016.  The following slide provides a breakout of forecast categories by hosting and cloud business categories:

Why Enterprises Need A Digital Infrastructure Playbook

The focal point of the summit was the launch of the digital infrastructure playbook.  Tony Bishop, Chief Strategy Officer, The 451 Group introduced the Digital Enterprise Playbook Series which you can download here. His presentation provided insights into how enterprises are struggling to align legacy IT, infrastructure including data centers, cloud, applications and system management to business goals while becoming more agile.

I had a chance to speak with Tony after his presentation and asked him why enterprises need a digital infrastructure playbook now.   “Digital transformation is breaking down the barriers to sustainable global prosperity by shifting power towards the individual,” he said. “This revolution will transform how enterprises create and deliver value. Digital enterprises will pursue and build dynamic infrastructure capabilities to innovate and differentiate customer experience, constantly empower employees and disseminate prescriptive knowledge across the enterprise.”

One of the most passionate and knowledgeable people I’ve ever met in infrastructure and IT research is Martin McCarthy, Chairman and CEO, The 451 Group.  He told me he’s seeing more pressure than ever for edge-to-core integration in the enterprise, which is forcing CIOs to be strategists over experts in cost reduction.  “Digital infrastructure will be the backbone enabling enterprise transformation in coming years. To blaze this trail, organizations need an ‘edge to core’ digital infrastructure playbook,” he said.   Presented below is a page from the Digital Enterprise Playbook Series:

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IBM SoftLayer Update

  • IBM’s acquisition of SoftLayer is going excellently and many IBM divisions now are actively collaborating with the Softlayer team to migrate existing apps and develop new ones. Thank you Lance Crosby, Simon West and Andre Fuochi for the update provided at the conference, it was invaluable.
  • Softlayer will be the foundation for a global cloud services infrastructure capable of delivering applications across multiple continents and thousands of users within hours, not days.  Lance Crosby explained the vision IBM has of delivering a continual stream of new applications and services over the global cloud services infrastructure network, which has the potential to turn into a high margin business quickly.
  • Softlayer is assisting with making the IBM Request for Proposal (RFP) more efficient based on their deep expertise in this critical area. Based on personal experience it can take anywhere from several weeks to up to several months for an RFP response.  SoftLayer has devised processes and systems that make RFP response times a fraction of that.
  • The majority of the top ten customers Softlayer has today are running large-scale clusters of Hadoop, with 40 Hadoop clusters being commonplace.  Lance Crosby mentioned these customers are very sophisticated in their use of Hadoop and many of them are in consumer products companies, looking to gain greater insights into customer behavior.
  • Bare metal servers running Hadoop are one of the fastest growing areas of the Softlayer business right now.  Simon West made an excellent point that running Hadoop on bare metal servers instead of through virtualized environment leads to a higher level of throughput, given Softlayer’s internal testing results.  Bare metal servers continue to accelerate in the industry and Softlayer’s executives confirmed they are seeing an acceleration of demand in this area.
  • An additional six data centers are planned for 2014, and SoftLayer has the capability to build one data center every two months of needed.  When asked what the global expansion plans are for SoftLayer since the acquisition, Lance Crosby told me London and Germany are of primary interest.  He also added that whenever the demand for a given nation reached between four and five thousand servers, Softlayer and IBM will consider building a data center in-country.

Sep 26

451 Research: Cloud-Enabling Technologies Revenue Will Reach $22.6B by 2016

cloud-computing-forecastDefining Cloud-Enabling Technologies (CET) as those that are installed, delivered and consumed on-premises, Market Monitor a service of 451 Research recently released their annual forecast of virtualization, security and automation and management revenue through 2016. The report, Market Monitor Cloud-Enabling Technologies has taken a bottoms-up approach in defining the three primary categories they include in their definition of cloud-enabling technologies.  Market Monitor’s methodology is explained in the report’s summary here.

Here are the key take-aways from this report:

  • Cloud-Enabling Technologies defined as virtualization, security and automation and management global revenues will grow from $10.6B in 2012 to $22.6B in 2016, attaining a 21% Compound Annual Growth Rate (CAGR).

  • Cloud-as-a-Service revenues will grow from $5.7B in 2012 to $19.5B in 2016, attaining a 36% CAGR.  Market Monitor defines Cloud-as-a-Service as externally delivered services, specifically 3rd party, that are hosted and pay-as-you-go with the cloud being relied on as a service delivery and consumption model. The following graphic provides a comparison of Cloud-as-a-Service and Cloud-Enabling Technologies revenue forecasts by year from 2012 through 2016.

  • 451 Research forecasts that the majority of CET revenues will be from virtualization-based systems and services (66%).  This segment is projected to attain a 16% CAGR in the forecast period and serve as the foundation of Phase I CET Adoption shown in the following graphic.  Phase 2 of CET Adoption is projected to be dominated by the need for tools to manage and control virtualized environments.  Phase 3 is projected to signal a shift to internal IT resources and internal IT cloud service providers.

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