The cloud transformation journey: Great expectations lead to a brave new world

It's easy to think of cloud adoption as a one-time event – you choose a cloud and you consume that cloud, and the rest is history – but realistically, for most enterprises this is an incremental and iterative process. Traditional refresh cycles drive periodic purchases of new hardware and updates of software – for cloud, rapidly growing feature sets and on-demand consumption require frequent reassessment of the venues and technologies that best meet changing enterprise needs. No one wants to move providers all the time – enterprises naturally try and optimize what they already have; providers that are best at accommodating them are likely to have the most loyal customers.

Our cloud transformation journey model shows the enterprise cloud cost experience over time. We identify the cycle of cloud consumption – migration and implementation, cost-savings and cost-increases, governance and optimization, and transformative value. The ups and downs of this experience and the time required to realize value vary by company and by application; with experience and automation, the amplitude of the curve flattens and the time to value shortens. And then it starts all over again. It represents the costs payable at each stage of the enterprise journey to value-adding 'utility' IT. Read the full report here.

The Cloud Transformation Jorney
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Webinar July 20th: The Economics of Serverless Computing

Serverless is more than just hype; it has the potential to revolutionize the way we develop, build and operate applications in the cloud. Understanding the economics of serverless technology is vital to understanding its role in the world and its longer-term potential to disrupt the industry. In this webinar, Owen Rogers, Research Director for Digital Economics at 451 Research, will review these economics, pit the TCO of serverless against traditional virtual machines and containers, and compare pricing across the big four providers, namely AWS, Google, IBM and Microsoft.

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OpenStack revenues to grow at a 35% CAGR and exceed $5bn by 2020

Private cloud revenue will overtake public cloud revenue by 2019 for service providers

Ahead of the OpenStack Summit in Barcelona, 451 Research has published its latest findings about OpenStack. In the most rigorous analysis of its kind, 451 Research’s Market Monitor service expects revenue from OpenStack business models to exceed $5bn by 2020 and grow at a 35% CAGR.

To date, OpenStack-based revenue has been overwhelmingly from service providers offering multi-tenant IaaS, but the latest research indicates that private cloud revenue will exceed public cloud by 2019. Moreover, while OpenStack’s growth rate is high, overall revenue is still relatively small compared with market leaders such as VMware and AWS.
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451 Research Finds OpenStack and Commercial Private Clouds Can Beat Public Cloud on Cost – But Only at Scale

In the latest Cloud Price Index, 451 Research analyzes the costs associated with using various cloud options to determine when it becomes better value to use a self-managed private cloud instead of public or managed cloud services. Now, for the first time, cloud buyers and vendors have transparency into a complex pricing model that takes into consideration the major factors impacting total cost of ownership (TCO), including salaries and workload requirements.

451 Research finds that because of the prevalence of suitably qualified administrators, commercial private cloud offerings such as VMware and Microsoft currently offer a lower TCO when labor efficiency is below 400 virtual machines managed per engineer. But where labor efficiency is greater than this, OpenStack becomes more financially attractive. In fact, past this tipping point, all private cloud options are cheaper than both public cloud and managed private cloud options.
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Too Many Imperatives, Too Little Time

By Bob Winter

As Managing Director for part of 451’s Advisory team, I work with clients across all of the 451 channels. My team in particular is charged with helping marketers answer the most vexing questions their customers are asking them, using a combination of custom research and analyst insights.

Usually about mid-year, it becomes clear to me that there are three or four questions that thread through the dozens of engagements we do every year.

This year those questions, of course, can all be tracked back to “The Cloud”.

Specifically, it has become clear that the cloud is entering the “Early Majority” market, where mainstream, conservative businesses are embracing the move to a hybrid cloud model of digital architecture.

Some of the questions this raises are:
-How do we determine what workloads to move to the cloud?
-How do I adjust my development model to adapt to this transition?
-How do I deploy in this blurred environment where Infrastructure as a Service (IaaS), Platform as a Service(PaaS) and Containers seem to be converging and offering multiple options to achieve the same result?
-What are the risks ‚Äì and benefits ‚Äì of moving my applications? 

We address these answers in a Black and White paper we did recently for Red Hat entitled:

“THE IMPERATIVE FOR HYBRID IT: CLOUD AND INNOVATION IN THE MODERN ERA” By Donnie Berkholz, Research Director, Development, DevOps and IT Ops, 451 Research

You can download the paper here.

If you have any questions, feel free to contact me: bob.winter@the 451group.com, or Donnie Berkholz: donnie.berkholz@451research.com.
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