North Bridge Future of Cloud Computing Survey Finds Public and Hybrid Cloud Strategies on the Rise

THE FUTURE OF
5TH ANNUAL SURVEY 2015
NORTH BRIDGE FUTURE OF CLOUD COMPUTING SURVEY IN PARTNERSHIP WITH WIKIBON
CLOUD COMPUTING
@North_Bridge @FutureofCloud @Wikibon #futureofcloud

@FUTUREOFCLOUD #FUTUREOFCLOUD
full spectrum
cloud
behind the
scenes: growing
pains
cloud means
business
great
expectations
where data
lives
demographics seismic shifts
in it
AGENDA
investments insights

THE COLLABORATORS 2015+
PLATINUM COLLABORATORS
COLLABORATORS

@FUTUREOFCLOUD #FUTUREOFCLOUD@FUTUREOFCLOUD #FUTUREOFCLOUD
DEMOGRAPHICS

2011 2012 2013 2014 2015
417
785
855 859
952
RECORD-BREAKING SURVEY
>50%
OF SURVEY
RESPONDENTS FROM
TECH INDUSTRY
USERS
35%
VENDORS
65%
SURVEY
RESPONSES FROM
38 COUNTRIES

USER-VENDOR LINE BLURS
Almost
50%
of respondents
have role as a
user or IT buyer.
Within vendor
organizations more and
more are consuming cloud
services.
USERSVENDORS

FULL SPECTRUM CLOUD
public
PaaS
hybrid
private
IaaS
SaaS
Emerging techs
SDN
DBaaS

JIM MORAN, GENERAL PARTNER, NORTH BRIDGE
Cloud has been gaining momentum year-over-year since the Future of Cloud
Computing survey was launched five years ago. Last year, we discussed the
second cloud front and the rise of “cloud-native” companies. This year, we’re
seeing the pervasiveness of cloud disrupt industries across the board as
companies look to maximize and implement cloud as a strategic and integral
technology. We’re also seeing the emergence of the cloud as the only way
businesses can truly get more out of their data including analyzing and
executing on it real-time. This will be a huge opportunity, but as the survey
showed, because data rarely moves between clouds (Public/Private) companies
must first learn how to interconnect disparate data sources into new
applications.@engineyard@JIMMORAN1

GAINS IN PUBLIC AND HYBRID STRATEGIES
PUBLIC PRIVATE HYBRID34% 19% 47%
UP FROM 2011 UP FROM 2011DOWN FROM 2011
+43.3%
PUBLIC
-48.4%
PRIVATE
+19.2%
HYBRID

SPECIFIC USE CASES DRIVING HYBRID
STRATEGIES
Changing use patterns of applications among end-users, partners and customers is
driving hybrid strategies
Only 1 in 4 Users of Hybrid Cloud
believe they’re leveraging 50-100% of the
full capabilities of the hybrid cloud.

MIKE SCHUTZ, GENERAL MANAGER, CLOUD PLATFORM MARKETING
@engineyard@schutzmike
The Future of Cloud 2015 Survey reflects what we see in the
marketplace—that public cloud adoption is accelerating while private
cloud is still essential for housing significant volumes of data. As cloud
adoption continues to gain momentum, businesses—particularly
enterprises—will look to hybrid cloud to bring those strategies together
as they consider ways to maximize investments and streamline
operations with comprehensive, open, and flexible services. This
combination is what will help companies transform more quickly, remain
relevant, and compete more in today’s era of disruptive innovation.

SAAS & IAAS MOST PERVASIVE
77%
OF ALL ORGANIZATIONS
SAAS IS IN
9%
INCREASE
FROM 2014
IAAS
IS IN
INCREASE
FROM 201467% 19%

SaaS, PaaS AND IaaS
PaaS
$2.3B
SaaS
$53B IaaS
$25B
CAGR +19%CAGR +38%CAGR +18%
SaaS, PaaS AND IaaS
Customer sentiment and revenues
associated with SaaS, PaaS and IaaS
Year: 2015
From Wikibon 2015-2026 Public Cloud Market Forecasts:
http://wikibon.com/public-cloud-market-forecast-2015-2026/

OTHER CLOUD TECHNOLOGIES SHOW
STRONG GROWTH
IN TWO YEARS, DBaaS EXPECTED TO
continue its strong
growth up
20% from 2015
DbaaS
PaaS SDN
38% 52% 23%

THE PERVASIVENESS OF CLOUD
ENTERTAINMENT
NAVIGATION
MAINTENANCE
COMMUNICATIONS

BRIAN GRACELY, SENIOR CLOUD ANALYST, WIKIBON
@engineyard@BGRACELY
Deploying to Public Cloud or Hybrid Cloud are no longer
‘if’ questions, but ‘when’ questions. Wikibon forecasts
that over the next 10 years, Hybrid Cloud will be the
predominant usage model that will include 1/3 of IT
spending on Public Cloud. The Future of Cloud data
shows that businesses see cloud as a way for IT to deliver
business agility for competitive advantage.

SEISMIC SHIFTS IN IT

DRIVERS
cost
scalability
agility
scalability
cost
agility
innovation
innovation

AGILITY AND SCALABILITY CO-PILOTS
scalability agility
innovation
Innovation is far less cited as a
reason than it was 5 yrs ago

SYSTEMS OF ENGAGEMENT +
SYSTEMS OF INSIGHT MOVE TO THE CLOUD
sales &
marketing
systems of
record
business
analytics
customer
service

JOE KINSELLA, FOUNDER AND CTO, CLOUDHEALTH TECHNOLOGIES
@engineyard@JoeKinsella
The cloud has finally gone mainstream. Companies of all
sizes, across all industries are taking advantage of
everything the cloud has to offer. This has lead to a
seismic shift in IT where they are taking on more of a
leadership role as organizations increasingly prioritize
centralized cloud governance while maintaining
decentralized management.

BEHIND THE SCENES;
GROWING PAINS

INHIBITORS
regulatory
interoper-
ability
security
complexity
reliability
lock-in
2011 2015 security
lock-in
privacy
complexity
regulatory

COST INCREASINGLY A CONCERN
Cost is 3X as likely
to be a concern today v. 5 yrs ago

IT HAS JOINED THE PARTY
disaster
recovery
comms app devweb content
mgmt

WHERE DATA LIVES

DATA IS ON THE MOVE
of data moved in 2015 from
public to private/hybrid
38%
WHY?
52%
cost
56%
control
62%
privacy
52%
speed

CHALLENGES MOVING DATA
WHY?
29%
privacy
33%
bandwidth
40%
technical
difficulties
28%
cost
Many of the early inhibitors
to cloud adoption from
our 2011 survey have
resurfaced when it
comes to data transfer

CASE STUDY
CASE STUDY FOR
CHALLENGE
CUSTOMER
APPLICATION CATEGORY
Like other major companies
worldwide, Rockwell
Automation needed better,
faster, and cheaper ways to
manage and analyze ever-
larger amounts of data.
@ROKAUTOMATION
Rockwell had an overwhelming number of control systems to monitor,
analyze, and support. The company had outgrown the capacity of its
internal datacenters and needed a solution that would support big
data. Building that solution itself would have required integration
with the company’s existing systems, as well as integrating on-
premises with cloud, and batch processing with live streaming.
Discrete
Manufacturing
Rockwell has taken major steps forward with a comprehensive data
approach based on Microsoft Azure technologies. The company’s data
strategy is paying off with solutions that come to market faster, cost
less to build and maintain, and enable the company to build its
business and to serve its customers in entirely new ways.
90% Reduction in costs

IT’S NOT A HYBRID WORLD
¾
of company data in significant
volumes is living in private or
public clouds. Very few are
adopting a hybrid approach

IT’S NOT A HYBRID WORLD… YET
Company data in public/private,
hybrid clouds is forecast to grow
over the next two years
2X

PRAT MOGHE, FOUNDER AND CEO, CAZENA
The 2015 Future of Cloud survey data highlights the cloud's
continuing maturation and spread to all aspects of enterprise
IT. Data migration and security challenges still hinder
adoption but are now being addressed with automation and
controls. As enterprises gain confidence and trust, big data as
a service in particular is poised for rapid growth over the next
24 months, driven by business analytics, customer service and
marketing initiatives.
@engineyard@pratmoghe

THE CLOUD MEANS BUSINESS

CLOUD LIFTS OPEN SOURCE

WHAT’S STOPPING YOU?
Standards and vendor policies
aren’t serving as deterrents
Top
Factors holding back
Users from Public Cloud
3
expertiseprivacysecurity
user

GREAT EXPECTATIONS

CLOUD TIME TO WOW:
SAAS
78%EXPECT ROI IN <3 MOS

CLOUD TIME TO WOW: PAAS
58%
EXPECT ROI IN <3 MOS

CASE STUDY
CASE STUDY FOR
CHALLENGE
CUSTOMER
The City of Los Angeles
launched an initiative to
replatform more than 20 city
websites on the Acquia
Platform with an eye toward
faster innovation, mobile
delivery, and increasing
online services on behalf of
the city’s 4 million residents.
@ACQUIA
Before its move to an open cloud platform, the City of Los Angeles
was hamstrung by an aging, 12-year-old CMS that provided little
ability to keep up with citizens’ rapidly shifting expectations for
online services.Digital Experience
Delivery
Los Angeles is scaling its digital presence and increasing citizen
access to services while ensuring a consistent, mobile-friendly
experience for the city’s visitors. Better services, delivered through
rapid, agile development in the cloud, resulted in a 20 percent
increase in pageviews in its first year.
4Million Residents

DEVOPS – FASTER FEATURES, LOWER COST
of all survey respondents have begun
devops in small teams
37%
DEVOPS ADOPTION IS STILL IN ITS EARLY STAGES
("PIONEERS") AND IN SMALL GROUPS.

DEVOPS IS THE BRIDGE TO GET YOU TO
TRUE SCALABILITY AND AGILITY
Full agility and constant product cycles
call for move to software model and
critical changes in operations

CHRISTOPHER STONE, CHIEF PRODUCTS OFFICER
@engineyard@ACQUIA
Competitive advantage starts with the cloud. Survey
respondents understand well that the cloud delivers
immediate results. Organizations adopt a Platform as a
Service so they can start fast, deploy continuously, and
scale without limits. With the cloud, organizations can
build higher quality applications and innovate more
rapidly with greater resiliency and security than
otherwise possible.

USER PERSPECTIVES

FOR CLOUD RELATIONSHIPS COMPANIES
WANT SIMPLE, CLEAR RELATIONSHIPS
are using direct or credit card
channels with cloud vendors
direct credit
card3in 4
user

ad hoc relationships
CHOOSING A CLOUD VENDOR
50-50
as part of a strategic plan.
STILL
ABOUT
VS.
user

NUMBER OF VENDORS: LESS IS MORE
75%
OF COMPANIES ARE USING LESS
THAN 10 VENDORS
user

HOW MANY VENDORS – SAAS, PAAS, IAAS
61% using one
vendor
71% using more
than one
vendor IaaS
SaaS
PaaS
50/50 between
one and many
vendors
user

WHY USE MULTIPLE VENDORS?
45.9%
CLOUD
EXPERTISE
MATTERS
CHOOSING MULTIPLE VENDORS
BECAUSE OF THEIR
CAPABILITIES
user

vendor
CLOUD GO-TO-MARKET STRATEGIES
FOR VENDORS
>50%
Cloud vendors are
providing direct to
user cloud services

CLOUD GO-TO-MARKET STRATEGIES
FOR VENDORS IN THE FUTURE
Even more are expected to buy
it online in the next 2 yrs up
56%@FUTUREOFCLOUD #FUTUREOFCLOUD
vendor

CASE STUDY
CASE STUDY FOR
CHALLENGE
CUSTOMER
Nightingale publishes
Electronic Health Record
(EHR) and Practice
Management software with
the goal of simplifying the
way healthcare is managed.
The company’s technology
keeps track of more than 17
million patient records.
Nightingale selected
CenturyLink for a hybrid
solution consisting of cloud
hosting and colocation
services.
@CENTURYLINKENT
Nightingale, a provider of Electronic Health Records (EHR) and
Practice Management solutions for healthcare organizations, needed
a cost effective way to accelerate expansion in the United States
market while expanding their product’s feature set to make it
compatible with a broader range of end user devices.
Cloud, hybrid cloud,
colocation and hybrid
IT services
Nightingale is enjoying the ability to operate cost effectively in
multiple regions while maintaining compliance with data sovereignty,
a high level of reliability, system availability, and disaster
preparedness.
“We can build a completely new pod environment in a new
location in an hour. This gives us a whole new level of
confidence in our ability to deliver high service levels to our
customers.”
Ijaaz Ullah
VP of Information Technology and Privacy Officer
Nightingale

INVESTMENTS IN CLOUD

53
SAAS PRIVATE INVESTMENTS OF $70M+
CAP IQSource
0
5
10
15
20
25
2010 2011 2012 2013 2014 2015 YTD
#oftransactions
DRAMATIC rise in large funding rounds
for SaaS companies over last 6 years

54
SAAS M&A AND PUBLIC EQUITY RAISED
CAP IQSource
8369
16067
21985
17005
30118
14978
959
970
1990
3581
3971
7789
0
5000
10000
15000
20000
25000
30000
35000
40000
2010 2011 2012 2013 2014 2015 YTD
$Millions
M&A Public Equity (IPO & Follow-on)
$127.8B in SaaS value creation since 2010
$9,328
$17,037
$23,975
$20,586
$34,089
$22,767

CLOUD & SAAS PRIVATE FINANCINGS
*Note: (As of 6/16/2014) larger deal size due to seven $100M+ amounts raised this year from
Actifio, Anaplan, Domo, Dropbox, Inside Sales, New Relic, Pure Storage
Source
$1.9B
203 deals
$9.2M/deal
2010
$3.2B
323 deals
$9.9M/deal
2011
$4.2B
386 deals
$10.8M/deal
2012
$4.8B
417 deals
$8.4M/deal
2013
$5.3B
334 deals
$15.7M/deal
2014
$7.6B
470 deals
$16.2M/deal
2015YTD
Total financing rose 4X over the past five years
Deal size rose 1.8X over the same period

PRIVATE VS. PUBLIC CAPITAL
RAISED IN SAAS
CAP IQSource
Will Public Capital Fundraising in SaaS
OUTPACE Private Capital Fundraising
for the first time since 2010?
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2010 2011 2012 2013 2014 2015 YTD
#Millions
Private Financings Public Equity (IPO & Follow-on)

57
INVESTMENTS IN CLOUD
$6.9B
VALUATION
4NEW INVESTMENTS
3 EXITS

INSIGHTS

RADICAL SHIFTS IN RULES

NEW WAVE OF DATA
OPPORTUNITIES ONLY POSSIBLE
IN THE CLOUD

CLOUD IS INTEGRAL IN
EVERY NEW PRODUCT

A NEW IT

THANK YOU+
PLATINUM COLLABORATORS
COLLABORATORS

FIND OUT MORE
#FUTUREOFCLOUD I @FUTURE OF CLOUD
WWW.NORTHBRIDGE.COM I @NORTH_BRIDGE
http://wikibon.com/ I @WIKIBON
FUTURE OF CLOUD
@JIMMORAN1
JIM MORAN
@BGRACELY
BRIAN GRACELY

North Bridge Future of Cloud Computing Survey Finds Public and Hybrid Cloud Strategies on the Rise

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