Ioug Cloud Study Final

PRIVATIZING THE CLOUD
2010 IOUG Survey on Cloud Computing
By Joseph McKendrick, Research Analyst

Produced by Unisphere Research, a division of Information Today, Inc .
October 2010
Sponsored by Produced by
Thomas J. Wilson,
President
2
TABLE OF CONTENTS
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Shared Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Applications and Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Managing Private Clouds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Public Cloud and Software as a Service Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Demographics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
Privatizing the Cloud—2010 IOUG Survey on Cloud Computing was produced by Unisphere Research and sponsored by Oracle. Unisphere Research is the market research unit of Unisphere
Media, a division of Information Today, Inc., publishers of Database Trends and Applications magazine and the 5 Minute Briefing newsletters. To review abstracts of our past reports, visit
www.dbta.com/research. Unisphere Media, 229 Main Street, Chatham, NJ 07928. Tel: 973-665-1120, Fax: 973-665-1124, Email: [email protected], Web: www.dbta.com.
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Data collection and analysis performed with SurveyMethods.
3
EXECUTIVE SUMMARY
percent report that at least some piece of their organization’s
There has been no shortage of excitement and chatter in the IT workload processing or infrastructure is already available
past year over the rise of public cloud computing, in which through private cloud services, a number that will likely grow
resources and applications are purchased on a pay-by-the-sip to 50 percent by next year. Adoption is strongest among the
basis from third-party service providers. However, an even larger large organizations. Almost one out of 10 has already exposed
and more pervasive cloud revolution has been happening, almost a sizeable share of their IT resources to a private cloud layer.
quietly, within the walls of today’s enterprises. Companies are ■ When looking at private cloud implementations, there is a
packaging and virtualizing their own IT assets into “cloud”-like strong focus on “platform as a service” (database and
services to offer across various departments and divisions, and middleware) capabilities, versus “infrastructure as a service”
even to outside partners. These “private clouds” offer the same (compute and storage services).
flexibility and incremental cost advantages to end users as public ■ Adoption of private cloud solutions for IT workload processing
clouds, but with less perceived risk and greater assurances of or infrastructure is outpacing use of public platform service
security and accountability. providers. About 14 percent use the services of public cloud
A new survey of 267 IT and data managers and professionals platform providers, compared with 37 percent using private
with the Independent Oracle Users Group (IOUG), conducted cloud for parts of their operations. Adoption of software as a
by Unisphere Research, a division of Information Today, Inc., service (SaaS) applications is more common, used by close to
finds that private cloud formations are growing in many one out of four respondents. However, security issues continue
companies, often outpacing adoption of public cloud services. to be a concern with use of public cloud and online application
The survey, conducted in partnership with Oracle, was fielded services, making private clouds a more attractive option to
in August 2010. enterprises. IT departments also play a leading role in
Respondents to the survey have a variety of job roles and identifying and managing public cloud and SaaS.
represent a wide range of company types and sizes. The largest ■ The larger the investment in private cloud, the greater the
segment of respondents has the title of database administrator, benefits seen—almost nine out of 10 mature cloud adopters
followed by IT manager and developer. More than one-quarter have realized significant benefits, compared with about one-
come from very large organizations with more than 10,000 third of respondents overall. However, organizational issues
employees. But there is also a sizeable contingent of small to hamper the growth of private cloud deployments. A majority
medium-size businesses in the survey, as well. In terms of of respondents have not established formal ways to fund their
industry groups, the largest segments seen in this survey are private clouds, and there is uncertainty about funding private
IT services/consulting, government agencies, utilities/ cloud service development and deployment. The main benefit
telecommunications, and education. (See Figures 30-33 being seen is cost savings.
at the end of this report.)
On the following pages are the detailed survey results, which
Key highlights of the survey’s findings include the following: explore the growth of private cloud computing. Respondents
■ Forty-four percent of organizations in the survey already have also provided insights on their own experiences with cloud
a private cloud—either already running or are piloting, computing. As one survey participant observed: “As our
planning or considering one. Adoption of private clouds will experience with cloud computing grows, we can realize
expand significantly over the next 12 months. At this time, 37 smoother transitions and improve overall efficiencies.”
4
SHARED SERVICES
Forty-four percent of organizations in the survey already party service provider. The third party may even be running the
have a private cloud—either already running or are piloting, company’s servers and software. A handful of respondents’
planning or considering one. Adoption of private clouds will companies, eight percent, say that their companies have private
expand significantly over the next 12 months. At this time, 37 cloud services that are actually hosted or maintained outside the
percent report that at least some piece of their organization's walls of their enterprises—functioning as “virtual private clouds.”
IT workload processing or infrastructure is already available Another 11 percent are considering such an arrangement. (See
through private cloud services, a number that will likely grow Figure 3.)
to 50 percent by next year. Adoption is strongest among the For the most part, among those companies that have private
large organizations. Almost one out of 10 has already exposed cloud services in production, they are likely to currently have
a sizeable share of their IT resources to a private cloud layer. fewer than 10 services in production. (See Figure 4.)
What is a “private cloud,” and how is it distinguishable from While interest in private cloud is running high, the survey
public clouds, or, for that matter, clusters of computing power confirms that these are still the early days for private cloud
within organizations? For purposes of this survey, we defined computing. Still, nine percent of respondents report that a
“private clouds” as virtualized IT resources, controlled and owned sizeable segment of their organization’s IT workload processing
by the organization, providing on-demand shared services to end or infrastructure has been exposed as private cloud services. This
users within or affiliated with the organization. By contrast, for figure is likely to grow to 15 percent over the coming year. While
purposes of this study, public clouds are services offered to any and 43 percent of respondents at this time do not have private cloud
all users on a commercial, pay-per-use basis by a third party. services, this proportion is expected to drop to 26 percent over
In this survey, close to one out of four respondents, 24 the next 12 months. (See Figure 5.) “We found the ease of use
percent, say they already provide or use private cloud services surprising,” relates one respondent. “Demand for private cloud
that are accessible to internal departments or lines of business computing is increasing as the various departments learn and
within their enterprises. Another 10 percent are piloting such understand the advantages,” says another.
services, or planning to roll out such services. (See Figure 1.) Along with IT-enabled services made available to parts of the
Private cloud computing is strongest within larger companies, organization, a similar percentage also extend these services to
which is not surprising, since many of these organizations likely their external networks of customers and partners. Nine percent,
already have extensive investments in expansive IT infrastructures. in fact, say that a sizeable segment of their IT services are now
Overall, 38 percent of the largest organizations in the survey (with also available outside their firewalls. (See Figure 6.) Along with
more than 10,000 employees) either already have cloud the smallest companies in the survey, respondents in larger
computing or are piloting cloud computing projects. In contrast, companies seem less inclined to be provisioning services outside
only 15 percent of the small companies in the survey (100 the firewall. However, this may be a statement about the lack of
employees or fewer) are ready for private clouds. (See Figure 2.) centralization and governance around cloud services at this time.
Then there’s another type of private cloud—one that is Many simply don’t seem to know if services are being offered this
exclusive to the organization, but is run within a “cage” at a third- way somewhere within their enterprises. (See Figure 7.)
5
Figure 1: Provide or Use On-Demand Shared Services?

(a.k.a. internal or private clouds)
Yes, in production at scale 11%

Yes, in limited use 13%
Yes, in pilot stage 5%
Preliminary planning 5%
Under consideration 11%
No 47%
Don't know/unsure 9%
0 20 40 60 80 100
6
Figure 2: Provide or Use On-Demand Shared Services—

By Company Size
Small* SMB** Medium*** Large****
11%
22%
Yes, in production or limited use 26%
24%
4%
10%
Yes, in pilot stage or planning 5%
14%
14%
14%
8%
68%
No 48%
49%
35%
4%
7%
18%
0 20 40 60 80 100
* 1-100 employees
** 101-1,000 employees
*** 1,001-10,000 employees
**** More than 10,000 employees
7
Figure 3: Maintain or Access Private Cloud Services Hosted and

Managed by Outside Provider (Virtual Private Cloud or
Hosted Private Cloud)?
Don’t know/unsure 23%
Under consideration 11% No 58%
Yes 8%
Figure 4: How Many Private Cloud Services Used?
None yet 45%

1 to 10 23%
11 to 25 5%
26 to 50 3%
More than 50 1%
0 20 40 60 80 100
8
Figure 5: Amount of IT Workload Processing/Infrastructure

Available Through Private Cloud Services
Now One year from now
None at this time 43%

26%
1 to 5% 11%
11%
10%
6 to 10%
13%
7%
11 to 25%
11%
6%
26 to 50% 9%
3%
More than 50% 6%
20%
0 20 40 60 80 100
9

Available to Customers/Partners Through
Private Cloud Services
1 to 5% 9%
6 to 10% 9%
11 to 25% 8%
26 to 50% 6%
More than 50% 3%
0 20 40 60 80 100
10

Available to Customers/Partners Through Private
Cloud Services—By Company Size
66%
41%
43%
15%
1 to 25% 34%
29%
20%
7%
26 to 50% 6%
3%
8%
0%
More than 50% 4%
2%
0%
11%
25%
29%
0 20 40 60 80 100
* 1-100 employees
*** 1,001-10,000 employees
11
APPLICATIONS AND INFRASTRUCTURE

When looking at private cloud implementations, there The survey found that a wide range of applications run
is a strong focus on “platform as a service” (database and on private clouds. Back-office applications are the most
middleware) capabilities, versus “infrastructure as a service” common types of applications being seen in private cloud
(compute and storage services). implementations, likely because these are not what differentiate
There is a notable trend toward looking at private cloud the business or give it strategic competitive advantage. The most
computing as a middleware and database-level strategy, versus popular type of applications being seen on private cloud service-
purely providing compute power or storage services, as is seen enabled implementations are financial and accounting functions,
with many public cloud models such as Amazon EC2 or S3. cited by 20 percent. Additional functions include human
In terms of the type of platform service being provided, most resources and benefits functions (19 percent) and email,
companies are providing application server platform as a service collaboration, and communications applications (18 percent).
(25 percent) and database platform as a service capabilities (21 (See Figure 9.)
percent) within their enterprises. (See Figure 8.)
Figure 8: Types of Private Platform and Infrastructure

(PaaS and IaaS) Cloud Services Provided
Application server platform as a service 25%

Database platform as a service 21%
Storage as a service 18%
Software development and test 15%
as a service
Compute as a service 10%
Identity as a service 5%
None 37%
Other 0%
0 20 40 60 80 100
12
Figure 9: Applications Run on Private Cloud Services
Financial/accounting 20%
Human resources/benefits 19%
Email, collaboration, communication 18%
applications
Home-grown applications 16%
Inventory/shipping 10%
Procurement/purchasing 11%
Customer service 4%
Desktop productivity applications 10%
Virtual desktop 14%
Departmental or line-of-business 9%
applications
Marketing/sales 8%
Other 9%
0 20 40 60 80 100
13
MANAGING PRIVATE CLOUDS

The larger the investment in private cloud, the greater the While there are a number of business benefits to be seen
benefits seen—almost nine out of 10 mature cloud adopters through private cloud computing, most companies are fixated
have realized significant benefits, compared with about one- on cost savings. One-third see cost reduction through
third of respondents overall. However, organizational issues elimination of duplicate functions, and a similar portion seek
hamper the growth of private cloud deployments. A majority of greater standardization across their enterprises to save costs.
respondents have not established formal ways to fund their Another 30 percent are interested in seeing cost savings through
private clouds, and there is uncertainty about funding private the consolidation and higher asset utilization that potentially
cloud service development and deployment. The main benefit could result from cloud. (See Figure 16.) In addition, one-third
being seen is cost savings. of respondents say they have realized at least some of the benefits
About four out of 10 respondents report that their companies mentioned above.
have established some type of funding mechanism for their private Companies further along in growing and leveraging private
cloud services. However, these sources tend to be all over the map. cloud implementations are more likely to have seen these
The largest segment of respondents, 18 percent, have chargeback benefits, the survey also confirms. Eighty-seven percent of the
mechanisms (allocation-based or utilization-based) to lines of more advanced cloud sites (with more than 10 services in
businesses or departments. Sixteen percent report that their IT production) say they have realized at least some of the benefits
departments shoulder the costs, while another 12 percent draw from promised by private clouds, such as cost savings or higher asset
a central corporate budget to make things happen. (See Figure 10.) utilization. Close to two-fifths of the advanced deployers report
As private cloud implementations grow, however, more costs the benefits gained as “significant.” (See Figure 17.)
are shifted back to the IT department. A majority of sites with What are the challenges to implementing or managing a
advanced private cloud implementations (defined as those with private cloud? Respondents are evenly divided about the
more than 10 services in production) say the costs of developing significance of many issues, but business and organizational
and maintaining private cloud services are attached directly to the issues come to the fore. More than one out of four cite issues
IT department budget, compared to only one-fourth of early- with creating the business case and funding model, and a similar
stage sites. Early-stage deployers are twice as likely, in fact, to be portion report issues with gaining cross-organization support or
supporting private cloud services through a central corporate participation, as well as implementing process, policy and role
budget. (See Figure 11.) Respondents with business units that are changes or transformation. Taking the second tier were more
directly charged for use of cloud-based services are evenly split technical concerns such as provisioning servers, storage or
between “metering” on a pay-per-usage basis, or simply paying a ensuring service levels. (See Figure 18.)
flat fee for the services on a regular basis. (See Figure 12.) Challenges shift as private clouds expand. In this survey,
Information technology departments are most likely to be more than half of the “advanced” deployers (with more than 10
the providers of private cloud services, as revealed by half of the services) say their greatest challenge is adequately provisioning
respondents. It’s notable, however, that there is a large segment server capacity to meet the new demands of the cloud, compared
(36 percent) of respondents who are uncertain of who takes with about one-third of the early-stage sites. By contrast,
responsibility for private cloud services. (See Figure 13.) companies in the early stages of private cloud deployments are
Does IT also drive and direct decisions about which private three times more likely to be concerned about implementing
cloud services will be implemented? For the most part, IT process, policy and role changes than their more advanced
departments or managers lead the effort, the survey finds. Close counterparts. (See Figure 19.)
to half (45 percent), however, say there either is no governance Challenges remain—particularly in terms of establishing
of private clouds at this time, or that they simply don’t know if cross-organizational support and funding for cloud services.
there is governance. (See Figure 14.) However, as the survey confirms, many organizations are in the
Does a stronger pattern of governance emerge as private cloud formative stages of private cloud computing, and are beginning
installations grow and mature? The survey finds that more to recognize the benefits that provisioning cloud services provide
governance responsibilities shift to the IT department in more to the enterprise.
advanced private cloud formations. (See Figure 15.)
14
Figure 10: How Private Clouds are Funded
Solely through the IT department budget 16%

Through a central corporate budget 12%
Through allocation-based chargebacks 10%
to the lines of business or departments
Through utilization-based chargebacks 8%
to the lines of business or departments
No formal funding mechanism at this time 25%
Other 3%
0 20 40 60 80 100
15
Figure 11: How Private Clouds are Funded

—By Private Cloud Maturity
Mature* Early Stage** Laggards***
Solely through the IT department budget 56%

23%
10%
12%
Through a central corporate budget 26%
10%
Through allocation-based chargebacks 12%

16%
to the lines of business or departments 5%
6%
Through utilization-based chargebacks 13%
to the lines of business or departments 6%
6%
No formal funding mechanism at this time 17%
42%
12%
30%
0%
Other 0%
7%
0 20 40 60 80 100
* 11 or more services in production

** 1-10 services in production
*** No services in production (expected funding sources)
16
Figure 12: How Business Units are Charged for Private Cloud
Service Usage
Yes, IT resource usage is “metered” 11%

Yes, participating units pay a flat fee 12%
or allocation
No, participating units are not charged 27%
or assessed
Other 4%
0 20 40 60 80 100
Figure 13: Who Manages and Provides Private Cloud Services?
IT department 50%
Independent subsidiary/division 3%
Individual business units 6%
Service provider, outsourcer, 8%
managed hosting provider
Other 7%
0 20 40 60 80 100
17
Figure 14: Private Cloud Service Governance: Who’s in Charge?
IT department 42%
No formal governance at this time 15%
Management of dedicated subsidiary/ 11%
division overseeing cloud
Cross-departmental or corporate committee 9%
Center of excellence or competency center 5%
Other 4%
0 20 40 60 80 100
Figure 15: Private Cloud Service Governance: Who’s in Charge

Mature* Moderate**
IT department 87%
64%
No formal governance at this time 0%

11%
Management of dedicated subsidiary/division 13%

overseeing cloud 15%
Cross-departmental or corporate committee 20%

21%
Center of excellence or competency center 7%

11%
0 20 40 60 80 100
* 11 or more services in production ** 1-10 services in production
18
Figure 16: Greatest Benefits Expected from Private Cloud Adoption
Save costs through elimination of 33%

duplication
Save costs through standardization for 32%
operational efficiency
Save costs through consolidation to 30%
achieve higher asset utilization
Greater information sharing 20%
Greater security 19%
Faster response to dynamic workloads 17%
Faster time to market for new application 16%
deployment
Reduce “rogue” service acquisition 11%
Greater leverage with vendors 8%
Other 4%
0 20 40 60 80 100
19
Figure 17: Have Companies Realized Private Cloud Benefits?
Mature* Moderate**
Yes, significantly 37%

17%
Yes, somewhat 50%

48%
Not yet 0%
26%

9%
0 20 40 60 80 100

20
Figure 18: Private Cloud Challenges
Adequately provisioning server capacity 26%

Creating the business case and funding 26%
model
Gaining cross-organization support or 25%
participation
Implementing process, policy and role 25%
changes (transformation)
Adequately provisioning storage capacity 21%
Building awareness of available services 23%
Inability to ensure service levels for apps, 16%
DBs, storage, systems
Loss of visibility/control of apps, 15%
databases, storage or systems
Available services not suitable for existing 14%
functions/processes
Integration of private to public cloud or 13%
other in house solutions
Other 3%
0 20 40 60 80 100
21
Figure 19: Private Cloud Challenges—By Maturity
56%
Adequately provisioning server capacity 35%
19%
31%
Creating the business case and 33%
funding model 29%
31%
Gaining cross-organization support or 35%
participation 21%
12%
Implementing process, policy and role changes 35%
24%
Building awareness of available services 31%

30%
20%
0 20 40 60 80 100

22
PUBLIC CLOUD AND SOFTWARE AS A SERVICE

DECISIONS
Adoption of private cloud solutions for IT workload applications, provided through a public cloud provider. The most
processing or infrastructure is outpacing use of public platform prominent type of application employed is financial. (See Figure
service providers. About 14 percent use the services of public 22.) Interestingly, while SaaS and public clouds are often portrayed
cloud platform providers, compared with 37 percent using as solutions for small companies with fewer IT resources, adoption
private cloud for parts of their operations. Adoption of software is fairly consistent across the company size categories measured in
as a service (SaaS) applications is more common, used by close this survey. Thirty-six percent of the smallest companies in the
to one out of four respondents. However, security issues survey (100 employees or fewer) report using at least one category
continue to be a concern with the use of public cloud and online of cloud or SaaS-delivered application, compared to 35 percent of
application services, making private clouds a more attractive the larger companies with more than 10,000 employees.
option to enterprises. IT departments play a leading role in As with private clouds, organizations are more focused on
identifying and managing public cloud services and SaaS. middleware and applications from public service providers than
In this survey, we asked respondents with, or planning, private they are on raw compute power, the survey finds. When asked
cloud implementations why they saw the private cloud as more about the type of platform being adopted from public services,
advantageous than securing similar services from a public cloud the largest segment report they are using application server
or SaaS provider. The main issues boiled down to a concern seen functions (18 percent), followed by database services (12
as the Achilles’ heel of many publicly offered services—security. percent). (See Figure 23.)
Forty-three percent of respondents say security is the driving While public services are often seen as a way for business
factor for seeking a private cloud formation versus that of a departments to get around their IT departments, the survey finds
public service. Long-term costs of public services also factored IT departments actually play a prominent role in public services
into decisions in one out of four cases. While the incremental acquisitions. Forty-two percent of respondents say that IT
costs of using publicly available services may be far lower than recommends/approves public cloud acquisitions, or has input
leveraging one’s own IT assets at the initial stages, costs can into the decision-making process. Only eight percent report that
quickly add up over the months. Quality of service is also an IT has no say in such decisions. Forty-five percent, however, just
advantage of private over public cited by one-quarter of aren’t sure. (See Figure 24.)
respondents. There may be a perception that an internal IT For the most part, the public cloud services being brought
department running cloud services may be more responsive in by the business are new applications, and tend not to be
and accountable to end users than a third-party service would intended to replace services or applications offered by companies’
be. (See Figure 20). own IT departments. (See Figure 25.) This trend is less
When looking at private cloud sites by level of maturity— pronounced among small to medium-sized businesses in
as measured by number of private cloud services now in the survey, in which two out of five report replacing existing
production—security is seen as less of an urgent reason for going applications with those from public cloud services, compared
with a private cloud than quality of service and costs. For to only 14 percent of the largest companies. (See Figure 26.)
example, while 64 percent of the “early-stage” private cloud sites At this time, only 14 percent of respondents use services
(10 or fewer services) point to security, only 42 percent of the offered via public cloud and online application providers (from
more “advanced” sites (more than 10 services) see this as an providers such as Amazon, Rackspace or Salesforce), the survey
advantage. The mature sites are far more likely to see quality of finds. Another 11 percent are considering adoption of such
service as a reason to stay with private clouds (53 percent versus services. Overall, 75 percent either don’t use such services or
36 percent of early-stage sites). (See Figure 21.) aren’t even aware if they do. (See Figure 27.) The sweet spot for
However, there is a sizeable segment of respondents whose the public services platform market currently is the small-to-
organizations do use public cloud in some capacity. At least 37 medium business segment, with both very small and very large
percent of respondents indicate that they use SaaS-based businesses not showing as high rates of adoption. However, a
▲
▲
23
significant portion of businesses at these extremes also appear to Respondents mentioned additional challenges with public
be considering public platform service adoption. (See Figure 28.) clouds. “The biggest is that, once your data leaves the control of
Adoption of cloud solutions from mainstream software your IT department, there are really no safeguards on the use of
vendors (such as Oracle on Demand, SAP, IBM, Microsoft) tracks that information,” says one respondent. “Namely, clouds are a
closely to that of cloud platform providers. About 14 percent say threat to the stability of any company.”
they have adopted cloud services via their software vendor, with Another adds: “Our biggest challenge is finding the best fit
another 14 percent considering such solutions. (See Figure 29.) across our enterprise.” One IT manager says there is still uncertainty
By company size, the smallest firms in the survey (with 100 or as to how far current software licensing goes in terms of allowing
fewer employees) are the most likely adopters, and the largest for the additional usage. “We don’t know whether all the software
organizations the least likely. (See Figure 30.) used by application have the license to run on cloud,” he says.
Figure 20: Why Implement Services via Private Versus Public Cloud
Security concerns 43%

Quality of service concerns 26%
Long-term cost 25%
Services already existed internally 23%
Regulatory compliance concerns 16%
Difficulty to customize 14%
Difficulty to integrate with in-house systems 12%
Concern about lock-in and ability to switch 8%
Other 9%
0 20 40 60 80 100
24
Figure 21: Why Implement Services via Private Versus Public Cloud
42%
Security concerns 64%
37%
53%
Quality of service concerns 36%
14%
47%
Long-term cost 38%
17%
Services already existed internally 37%

34%
10%
0 20 40 60 80 100

25
Figure 22: Types of SaaS Applications Procured Through

Public Cloud Providers
Financial/accounting 11%
For development use 10%
Human resources/benefits 10%
Marketing/sales 10%
Email, collaboration, communication 9%
applications
Customer service 8%
Procurement/purchasing 4%
Desktop productivity applications 4%
Departmental or line-of-business 4%
applications
Inventory/shipping 3%
Virtual desktop 2%
None of the above; don't use public 26%
SaaS applications
Other 5%
0 20 40 60 80 100
26
Figure 23: Types of Public Platform and Infrastructure

(PaaS and IaaS) Cloud Services Used
Application server platform as a service 18%

Database platform as a service 12%
Compute as a service 10%
Storage as a service 9%
Software development and test 7%
as a service
Identity as a service 1%
None: 46%
Other 0%
0 20 40 60 80 100
27
Figure 24: Role of IT Departments in Public Cloud and Online

Application Adoption Decisions
IT recommends or approves most or all

public cloud service deployments— 30%
all public cloud service deployments
IT has input into public cloud service

deployments; but selection and final 12%
approval is up to business managers
IT has no input in public cloud service

choices; business managers oversee 8%
and approve their own adoption
Don't know/not sure 45%
Other 7%
0 20 40 60 80 100
Figure 25: Have Any Public Cloud Services Replaced

IT Department Offerings?
Yes, some replaced Don't know/unsure 34%

existing applications 18%
Yes, most or all public cloud

services replaced existing
internal applications 6% No, these are new
applications for us 42%
28
Figure 26: Have Any Public Cloud Services Replaced IT

Department Offerings?—By Company Size
15%
39%
Yes, most or some 26%
14%
59%
No, these are new applications 29%
36%
44%
26%
38%
41%
0 20 40 60 80 100
* 1-100 employees
*** 1,001-10,000 employees
Figure 27: Use Cloud Offerings from Cloud Platform Providers

(Such as Amazon, Rackspace, Salesforce, Service-now)?
Yes 14%
No 55%
29
Figure 28: Use Cloud Offerings from Cloud Platform Providers

(Such as Amazon, Rackspace, Salesforce, Service-now)?
—By Company Size
11%
16%
Yes 15%
8%
11%
12%
12%
0 20 40 60 80 100
* 1-100 employees
*** 1,001-10,000 employees
Figure 29: Use Cloud Offerings from Software Vendors

(Such as Oracle On Demand, SAP, IBM, Microsoft)?
Yes 14%
No 51%
30
Figure 30: Use Cloud Offerings from Software Vendors

(Such as Oracle On Demand, SAP, IBM, Microsoft)?
—By Company Size
18%
14%
Yes 17%
6%
7%
17%
14%
0 20 40 60 80 100
* 1-100 employees
*** 1,001-10,000 employees
31
DEMOGRAPHICS
Figure 31: Respondents’ Primary Job Titles
Database Administrator (DBA) 40%
Director/Manager of IS/IT 11%
Programmer/Developer 9%
Analyst/Systems Analyst 6%
Data Architect 6%
Chief Information Officer/CTO/VP of IT 5%
IT Operations Manager 5%
Systems Administrator 5%
Applications Administrator 3%
Project Manager: 3%
IT Consultant independent contractor 2%
IT Consultant for IT service/integration firm 1%
Security Manager 1%
Manager of a business unit (non-IT) 1%
Executive management level for the business 1%
Other 4%
0 20 40 60 80 100
32
Figure 32: Respondents’ By Organization Size—Number of Employees

(Includes all locations, branches, and subsidiaries)
1 to 100 employees 15%

101 to 500 employees 13%
501 to 1,000 employees 14%
1,001 to 5,000 employees 22%
5,001 to 10,000 employees 10%
More than 10,000 26%
0 20 40 60 80 100
33
Figure 33: Respondents’ Primary Industries
IT Services/Consulting/System Integrator 17%

Government (all levels) 12%
Utility/Telecommunications/Transport 12%
Education (all levels) 1%
Manufacturing 8%
Healthcare/Medical 7%
Retail/Distribution 6%
Software/Application Development 6%
Financial Services 5%
Other Services (Business/Consumer) 4%
High-Tech manufacturing 4%
Insurance 3%
Other 5%
0 20 40 60 80 100
Join the IOUG—If you're not already an IOUG member and would like to continue receiving key information like this, visit the IOUG at w3.ioug.org/join/today for information on how to join
The information in this report has been gathered through Web-based surveys of member and prospective member lists provided by the IOUG, through interviews with knowledgeable
participants in the computer industry and through secondary research of generally available documents, reports and other published media, as well as from earlier studies conducted by
Unisphere Research. Unisphere Research has relied on the accuracy and validity of all information so obtained. Unisphere Research assumes no liability for inaccurate or omitted information

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PRIVATIZING THE CLOUD

2010 IOUG Survey on Cloud Computing

By Joseph McKendrick, Research Analyst

Applications and Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

Managing Private Clouds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

Public Cloud and Software as a Service Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22

Figure 1: Provide or Use On-Demand Shared Services?

Yes, in production at scale 11%

Figure 2: Provide or Use On-Demand Shared Services—

Figure 3: Maintain or Access Private Cloud Services Hosted and

Under consideration 11% No 58%

Figure 4: How Many Private Cloud Services Used?

None yet 45%

Figure 5: Amount of IT Workload Processing/Infrastructure

None at this time 43%

Figure 6: Amount of IT Workload Processing/Infrastructure

Figure 7: Amount of IT Workload Processing/Infrastructure

APPLICATIONS AND INFRASTRUCTURE

Figure 8: Types of Private Platform and Infrastructure

Application server platform as a service 25%

Figure 9: Applications Run on Private Cloud Services

MANAGING PRIVATE CLOUDS

Figure 10: How Private Clouds are Funded

Solely through the IT department budget 16%

Figure 11: How Private Clouds are Funded

Solely through the IT department budget 56%

Through allocation-based chargebacks 12%

* 11 or more services in production

Yes, IT resource usage is “metered” 11%

Figure 13: Who Manages and Provides Private Cloud Services?

Figure 14: Private Cloud Service Governance: Who’s in Charge?

Figure 15: Private Cloud Service Governance: Who’s in Charge

No formal governance at this time 0%

Management of dedicated subsidiary/division 13%

Cross-departmental or corporate committee 20%

Center of excellence or competency center 7%

* 11 or more services in production ** 1-10 services in production

Figure 16: Greatest Benefits Expected from Private Cloud Adoption

Save costs through elimination of 33%

Figure 17: Have Companies Realized Private Cloud Benefits?

Yes, significantly 37%

Yes, somewhat 50%

Don't know/unsure 12%

* 11 or more services in production

Figure 18: Private Cloud Challenges

Adequately provisioning server capacity 26%

Figure 19: Private Cloud Challenges—By Maturity

Mature* Early Stage** Laggards***

Building awareness of available services 31%

* 11 or more services in production

PUBLIC CLOUD AND SOFTWARE AS A SERVICE

Security concerns 43%

Services already existed internally 37%

* 11 or more services in production

Figure 22: Types of SaaS Applications Procured Through

Figure 23: Types of Public Platform and Infrastructure

Application server platform as a service 18%

Figure 24: Role of IT Departments in Public Cloud and Online

IT recommends or approves most or all

Mature* Early Stage Laggards*