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Private cloud

space for Microsoft


Sudhir Kamble

Content
Executive summary
Defining the cloud
Private cloud introduction
Overview Private cloud market
Market Trends
Drivers and inhibitors
Competitive landscape
Opportunities
Conclusion

Executive summary
Private cloud computing is a large and growing market that is particularly

attractive for large and medium businesses which offers significant


potential for players of all sizes
To stay competitive, Microsoft should focus on managing the top and

bottom line, use traditional and creative means to do both


Over the coming years, customers will move toward the cloud in a

multitude of ways. The one-size-fits-all approach that has brought providers


this far will prove unsustainable.
In contrast, the next generation of cloud computing winners will be focusing

on their product development pipelines, marketing strategies and sales


approaches on the segments that they are best equipped to address. In the
process, they will widen their lead against the competition.

Defining the cloud


Internetbased data
access &
exchange

Internetbased
access to
low cost
computing
&
application
s

The
Cloud

Fundamental principles
Highly
abstracted
Hardware
Hardware and
and
related
related
infrastructure
infrastructure is
is
highly
abstracted
highly abstracted
from
from the
the users
users

Immediate
ly scalable
Usage
Usage and
and cost
cost
can
be
scaled
can be scaled
according
according to
to the
the
needs
without
needs without any
any
additional
additional
contracts
contracts or
or
penalties
penalties

Source: Deloitte, KPMG report - The Cloud Changing the Business Ecosystem

Multitenant
Multi-tenant
Multi-tenant
architecture
architecture
enables
enables numerous
numerous
enterprises
enterprises to
to have
have
computing
computing
capabilities
capabilities

Pay-asyou-go
Payment
Payment is
is
variable
variable based
based on
on
the
actual
the actual
consumption
consumption of
of the
the
users
users

Private cloud introduction


Private cloud computing model is a model based on a consolidated

infrastructure dedicated specifically to a private enterprise


Private clouds are either set on or off premises of the company and are

managed either internally or by third-party service providers


Private cloud environment enables companies to centralize their IT

resources instead of working with separate environments.


Private clouds offers highest level of security and control but are expensive
Over 50% of the respondents in a survey have indicated that they

use/intend to use Private Clouds


Large organizations would like to implement Private Clouds to deal with

issues such as data security and performance. Smaller companies are less
interested in Private Clouds probably due to costs concerns.

Source: https://www.signalalliance.com/wp-content/uploads/.../Private-cloud.pptx

Overview Private cloud market


The private cloud market is expected to be more than double from its current

market in 2011. Private Cloud Market to Reach $69 Billion by 2018. For this
private cloud market is expected to grow with a CAGR of 22% for the period of
2013 2018.
Application virtualization tools is the leading segment in the private cloud with

around 37% market share in 2011 followed by infrastructure virtualization and


In
business
virtualization
tools.
marketpurpose
sizing terms
Application

Virtualization Tools, Infrastructure


Virtualization Tools and Business Processes
Virtualization tools is expected to nearly
double its market by 2015
On the other hand Middleware Virtualization

Tools is expected to grow nearly 10 times


from its 2011 market
Source: Slideshare, http://finance.yahoo.com/news/research-markets-global-private-cloud-101100499.html

Market Trends
Increased adoption of
hybrid cloud computing
models

Enterprises are increasingly using


hybrid clouds because they can host
critical applications on private clouds
and applications with relatively low
security concerns on the public cloud.
Also computing resources can be
accessed from the public cloud
infrastructure as and when required.

Increased productivity of
the network infrastructure

Organizations which have adopted


private clouds are increasingly using
virtualization, which is more efficient.
Most organizations prefer private
clouds as it helps reduce hardware
infrastructure costs. A virtualized
network increases an organization's
performance and productivity.

Major challenge is
migrating legacy
applications on a private
cloud computing platform

Legacy applications limit information


to a certain number of end-users. In
addition, the private cloud imposes
restrictions when managing and
validating data, which forces
organizations to think twice before
migrating to a private cloud.

Source: http://www.reuters.com/article/2014/09/08/research-and-markets-idUSnBw085454a+100+BSW20140908

Drivers and inhibitors


Drivers

Quicker payback
Increased ROI
Accelerated deployment
Lower upfront investment
Greater flexibility and scalability
Focus on core competencies

Inhibitors
Resistance to IT change
Security and compliance issues
One size fits all approach

Source: Deloitte

Competitive landscape
ORACLE

HP

VMware

Microsoft

Targets

Medium to Large
Enterprise Customers

Consumers, SMB, Medium


and Large Customers

Consumers, SMB,
Medium and Large
Customers

Consumers, SMB,
Medium and Large
Customers

Go-to-Market

Direct and Channel

Heavy Channel, also


Direct

Direct and
Channel

Heavy Channel, also


Direct

Hardware

Lean portfolio targeting


enterprise solutions &
optimization

Very large portfolio that is


point product focused,
increasing focus on
converged solution
bundles

VMware owns only


the virtualization
platform

Microsoft doesnt own


hardware and
engineered systems
and relies on other
vendors

Software

Oracle-IP = Best-inclass Enterprise


Database, Middleware,
Applications, Operating
Systems, Management

HP-IP = Hardware centric


with very limited MW and
DB/DW (Autonomy,
Vertica), mainly
infrastructure related
focus (OS, management)

VMwares offers
only the IaaS
platform

Solutions

Optimized/engineered
HW+SW Oracle-IP
solutions to solve
complex computing
needs in the data
center

Layered HW+SW and


Converged Solution
bundles (with reference
architectures but lacking
deep HW/SW crossoptimization)

VMware vCloud
Suite
VMware vSphere
OpenStack Virtual
Appliance

Microsoft Windows
Server 2012 (includes
Hyper-V)
Microsoft System
Center 2012
Microsoft provides
common cloud
management, but still
requires management
components from
partners since it
doesnt own the full IT
stack

Opportunities
The preference for third party delivered, or managed, private cloud will increase

over the next two years as hybrid integration, increased complexity of clouds
and security concerns challenge enterprise IT skills and capabilities, according to
a report from Technology Business Research.
This migration is expected to result in customers using a systems integrator or

private cloud vendor to save time and reduce costsoverall the $41 billion
private cloud market in 2014 will grow at a 14 percent compound annual growth
rate (CAGR) to $69 billion vendor opportunity by 2018.
The cloud-based security services market will be worth $2.1 billion in 2013,

rising to $3.1 billion in 2015, and the top three most sought-after cloud services
moving forward will remain email security, Web security services and identity
and access management (IAM), according to a recent report from IT research
firm Gartner.

Source: http://www.eweek.com/cloud/private-cloud-market-to-reach-69-billion-by-2018.html

Conclusion
Microsoft has been the most influential and dominant player in the technology

industry for many years; however, it faces numerous challenges as the PC world
dramatically changes. It has a strong presence in the data center and has
aggressively embraced cloud computing, but faces significant competition from
other cloud infrastructure and platform service providers.
Microsoft should aggressively invest in expanding the number of its own data

centers and also push in parallel its own partners to expand their own capacities
Microsoft has been playing catch-up, with the objective to become a leader in

cloud productivity, social collaboration and storage markets. Microsoft is facing


stronger competition from its partners, making it more difficult to succeed. It
should relook at its market approach once again.
Microsoft should partner with leading technology firms to expand the addressable

market of its cloud portfolio and grow the overall ecosystem of capabilities and
end users on its cloud platform.