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Issue 15, April/May


Market value B

10 20 30 40 50 60 70 80

- 2010 2011

On-premises software Cloud software

On-premises Western Europe software will grow by 2% ($1.7bn) to $84.9bn. better

This a performance

than in 2010, which was a very poor year for software sales.

Cloud software will grow by 48% (€1.7bn) to $5.3bn.

In 2010, cloud software growth was more than 80% of the overall growth but this was due to the very low on-premises software growth. Despite a decline in relative market growth for cloud software, this will still be an outstanding result

in 2011

cloud software. Source: IDC



CONCERNS AND VALUE nfrastructure-as-a-Service value in (IaaS) is

becoming a commodity, but there is much greater


a-Service (SaaS) and Platform-as-a- Service (PaaS) higher up the stack. That is where tomorrow’s leaders will find real differentiation. Hybrid clouds – ie, SaaS and PaaS, in combination with internal applications – will help organizations accomplish tasks they cannot accomplish today and will cement IT’s role as a driver of business growth.

When SaaS also provides a platform it makes it easier to customize and tap into an

expanding ecosystem of third-party

applications. Service providers will begin to provide targeted vertical solutions.


The current focus on infrastructure doesn’t help organizations differentiate themselves. Together, SaaS and PaaS rather than IaaS will enable IT to create value through a combination of cost reduction,

speed to

“Cloud computing will become ubiquitous. Private clouds accommodate a desire, and often a legal requirement, for data to remain within an enterprise. Public clouds meet the needs of many enterprises, and we can expect to see more ‘hybrid’ cloud models. IT pros will have to manage a portfolio of models that include traditional and virtualized cloud as well.”


market, agility and the ability to gracefully integrate business processes with partners and suppliers’ solutions as a way to entice more enterprises to move applications to the cloud.

More organizations will deploy virtualized desktop infrastructure (VDI) for high-security or highly standardized desktop environments.

Private clouds will be utilized for

development and testing, along with transient applications, such as product demonstrations for customers, that



REACTION Positive: Traditional s/w

licenses are not just about initial purchase price. On-going support and maintenance (to get upgrades) are the hidden costs, plus cost of upgrade (the latter is seamless in SaaS), so you don’t have to build an in-house team to support the application and get guaranteed service levels.

Sean Hoban, CEO, Kimble Applications*

Commoditization of IT infrastructure will accelerate.


be set up and retired quickly.

Public clouds

will be leveraged more for non- different iat ing applications or for ‘cloudbursting’ – a computing-on-demand

model for processing heavy,

short-term workloads. But we expect hybrid clouds – mixing public and one or more private services – to emerge as the dominant model in most enterprises.


Before the full potential of cloud computing can be realized, companies and their service providers have plenty of technical and business hurdles

to and managing federated

As data and services are spread across a variety of service providers, hybrid models will provide the best balance of flexibility while managing risk.

We expect the shift to move from the cost of discrete IT components to a discussion about the total cost of ownership (TCO) of cloud solutions. The current emphasis is on economies of scale from volume, automation, commoditization and consolidation.

There are many implicit cost elements

involving quality of service, staff and skill requirements,

the granularity of licensing

costs and charge backs. Load elasticity is another consideration; the ability to reduce utilization when demand is low makes costs variable as well.

overcome. Technologically, IT teams will have to develop strategies for implementing

identities, which are necessary for enabling consistent permissions, roles and traceability across multiple service providers. IT leaders will have to work with cloud service providers to determine the right federation rules for their communities.

WHAT CONCERNS YOU? Concerns for providers include: platform- level version management activities


ability to manage local patches, versioning and upgrades without introducing risk to cloud consumers); and richer application programming interfaces (APIs), which are necessary

for more sophisticated applications.

Concerns for users involve: consistent policy enforcement across cloud providers; access to event meta-data, which is critical for analytics; governance over applications and data that is stored in third-party data centers; better fault- tolerance for application architectures; and network latency. n

Extract from Accenture Technology Visions 2011

Read the full paper at www.


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