Nearly Zero to Private Cloud in Two Years

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rep or ts.informat ionweek.com
Januar y 2014

$99

2014 Private Cloud
Survey
53% brought their private clouds from
concept to production in less than one year, and 60% extend
Respondents are on a roll:

their clouds across multiple data centers. But expertise is scarce, with

51% saying acquiring skilled employees is a roadblock.
By Art Wittmann

Report ID: R7591213

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CONTENTS

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TABLE OF

reports.informationweek.com

4
5
6
7
9
11
14
16
18
22
68

Author’s Bio
Executive Summary
Research Synopsis
(Nearly) Zero To Private Cloud In Two Years
Resistance Is Futile?
No Fear, No Loathing
Private Cloud: The Last Nail In APM’s Coffin?
Not All Smooth Sailing
Vendor Blanket Bingo
Appendix
Related Reports

Figures
7 Figure 1: Private Cloud Strategy
8 Figure 2: Approach to New Technology Adoption
9 Figure 3: Reasons for Not Adopting a Private Cloud
10 Figure 4: Reasons to Consider a Private Cloud
11 Figure 5: Perceived Private Cloud Issues
12 Figure 6: Success of Private Cloud
13 Figure 7: Private Cloud Timeline
14 Figure 8: Success in Meeting IT Goals
15 Figure 9: Success in Meeting Business and Process
Goals
16 Figure 10: Challenges Encountered When
Launching a Private Cloud

2014 Private Cloud Survey

17 Figure 11: Private Cloud Issues
18 Figure 12: Tech Updates Needed to Build
a Private Cloud
19 Figure 13: Importance of Private Cloud
Features
20 Figure 14: Use of Chargeback
22 Figure 15: Types of Private Clouds Offered
23 Figure 16: Private Cloud Across Multiple
Data Centers
24 Figure 17: Movement Among Data
Center Locations
25 Figure 18: Private Cloud Requirement for
New Applications
26 Figure 19: Required App-Level Features
and Functions
27 Figure 20: Dealing With Legacy
Applications
28 Figure 21: Approach Taken to Build a
Private Cloud
29 Figure 22: Acquiring Knowledgeable Staff
30 Figure 23: Build vs. Bundle
31 Figure 24: Private Cloud Vendors Used
32 Figure 25: Budget to Build a Private Cloud
33 Figure 26: Budget to Maintain a Private
Cloud

34 Figure 27: Impact of Industry Standards
on Product Selection
35 Figure 28: Use of Public Cloud Services
36 Figure 29: Use of Hybrid Cloud Model
37 Figure 30: Reasons for Not Using a Public
Cloud
38 Figure 31: Stage of Private Cloud
Deployment
39 Figure 32: Steps Taken to Build a Private
Cloud
40 Figure 33: Expected Private Cloud
Timeline
41 Figure 34: Expected Success of IT Goals
42 Figure 35: Expected Success of Business
and Process Goals
43 Figure 36: Expected Challenges of
Launching a Private Cloud
44 Figure 37: Potential Private Cloud
Problems
45 Figure 38: Necessary Tech Updates to
Build a Private Cloud
46 Figure 39: Importance of Private Cloud
Features
47 Figure 40: Plans for Chargeback Use

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TABLE OF


48 Figure 41: Planned Private Cloud Offerings
49 Figure 42: Planned Private Cloud Scope
50 Figure 43: Planned Movement Among Data
Center Locations
51 Figure 44: Planned Private Cloud
Requirement for New Apps
52 Figure 45: App-Level Feature and Function
Requirements
53 Figure 46: Plan for Handling Legacy
Applications
54 Figure 47: Planned Approach for Building a
Private Cloud
55 Figure 48: Strategy for Acquiring
Knowledgeable Staff
56 Figure 49: Planned Approach for Private
Cloud Purchase
57 Figure 50: Planned Private Cloud Vendor Use
58 Figure 51: Estimated Budget to Build a Private
Cloud
59 Figure 52: Estimated Budget to Maintain a
Private Cloud
60 Figure 53: Impact of Industry Standards on
Product Selection
61 Figure 54: Public Cloud Use


62 Figure 55: Hybrid Cloud Use
63 Figure 56: Reasons for Not Using or Phasing
Out Public Cloud
64 Figure 57: Job Title
65 Figure 58: Company Revenue
66 Figure 59: Industry
67 Figure 60: Company Size

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Art Wittmann
InformationWeek Reports


Art Wittmann is an independent IT analyst and writer with 30 years of
experience in IT and IT journalism. Formerly, he was VP of InformationWeek
Reports, and has served as editor of InformationWeek and editor in chief of Network Computing and IT Architect magazines. Prior to his time in business technology journalism, he worked as an IT director for a major university.

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SUMMARY

reports

EXECUTIVE



The results of our InformationWeek 2014 Private Cloud Survey are eye-opening. All 242 respondents hail from
organizations with 50 or more employees and screened into the survey by indicating involvement with managing,
purchasing, advising on, or implementing datacenter technologies, and we were able to trend from our April 2012 poll.
So what’s so surprising? The percentage reporting that they have functional private clouds more than doubled,
from 21% to 47%. And we saw very little falloff of those who told us in 2012 that they were on the private cloud path.
Other stats:
>> 36% of private cloud users rate their projects as somewhat successful versus 64% saying they’ve achieved complete (17%) or very good (47%) success. There were zero failures in the bunch.
>> 33% of cloud adopters used internal expertise to build their systems, and 76% have invested in training employees
in private cloud technologies.
>> 26% of those not using private clouds blame applications that won’t work in the model, yet 61% of nonadopters
say a private cloud could yield significant operational cost savings.
>> 19% purchased a preconfigured bundle, like Vblocks, while 55% built their clouds from individual products and
suites.
Our advice: Get a private cloud plan in place, and vet all technology purchases, from storage to public cloud services
to networked applications, based on how well they support your plan.
In this report we:
>> Examine the business and technology trends pushing the move to private cloud
>> Provide recommendations on building, and more effectively using, a private cloud that can adapt to explosive
growth, changing infrastructure technology, and a dynamic mix of public and private services
Respondent breakdown: 31% have 5,000 or more employees; 24% are over 10,000. Financial services, government,
education, and healthcare/medical are well-represented, and 47% are IT director/manager or IT executive management
(C-level/VP) level.

January 2014 5

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InformationWeek Reports’
analysts arm business technology
decision-makers with real-world
perspective based on qualitative
and quantitative research, business and technology assessment
and planning tools, and adoption
best practices gleaned from
experience.

OUR STAFF
Lorna Garey, content
director; lorna.garey@ubm.com

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editor, research;
heather.vallis@ubm.com

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Tara DeFilippo, associate art
director; tara.defilippo@ubm.com
Find all of our reports at
reports.informationweek.com.

SYNOPSIS

ABOUT US

reports

RESEARCH


Survey Name InformationWeek 2014 Private Cloud Survey
Survey Date November 2013
Region North America
Number of Respondents 242 at organizations with 50 or more employees
Purpose To examine private cloud adoption and strategies in the enterprise
Methodology InformationWeek surveyed business technology decision-makers at
North American companies with 50 or more employees. The survey was conducted
online, and respondents were recruited via an email invitation containing an embedded
link to the survey. The email invitation was sent to qualified InformationWeek subscribers.

January 2014 6

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(Nearly) Zero To Private Cloud In Two Years
It’s been 20 months since our last InformationWeek Private Cloud Survey, and boy, have
things changed. Now, 20 months happens to
be just shy of the gestation period for an
African elephant. In less time than it takes to
make an elephant, the percentage of enterprises reporting functional private clouds
more than doubled, from 21% to 47%. That’s
pretty phenomenal.
What’s equally amazing is that, in April 2012,
30% of respondents were starting cloud projects. A 26-percentage-point increase in shops
with functional clouds means that most of
those schemes, on the drawing board two
years ago, made it into production. We almost
never see that happen.
The top-level message: Private clouds are
achievable, are being done in the real world,
and are highly popular. Elephants should have
it so good.
In fact, it would be difficult to overstate the
success of the private cloud vision as reported
by our respondents. By every metric in the surreports.informationweek.com

vey, more people are building their own
clouds, and the results are almost universally
better than anyone anticipated, us included. If
this tech did go through a “trough of disillusionment,” it was short-lived. And it’s not like
we didn’t catch private cloud at the start of

what should have been its hype cycle. The
OpenStack foundation wasn’t incorporated
until six months after our 2012 survey, and
arguably a fully functional version of vSphere
had been on the scene for only about a year,
since early 2011, when VMware added sup-

Figure 1

Private Cloud Strategy
Which best describes your state of private cloud adoption?

Never considered it, no interest
Considered it and decided
not to build a private cloud

Have a private cloud in production
for most or all of our apps

7%

17%

13%
Built a test version and
found it wasn’t worth pursuing

3%
30%
30%

Are testing various parts of a private
cloud or starting a private cloud project

Data: InformationWeek 2014 Private Cloud Survey of 242 business technology professionals
at organizations with 50 or more employees, November 2013

Have a private cloud in production
for some of our apps

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FAST FACT

23%
of respondents to our
2014 Private Cloud
Survey say they’re not
pursuing private clouds.


reports

port for Windows Server 2008, RHEL 6, SLES
11, Ubuntu, and Solaris.
Essentially, the stars lined up for private cloud.
To wit, vSphere 5 hit the market just after our
first survey and brought to bear some very useful capabilities, including storage virtualization,
data protection, and replication. CloudStack, an
open source private cloud suite that’s been
battling out with Eucalyptus and OpenStack,
was released to the public a few months before
OpenStack was formed; though it figures less
prominently in our data, having platform
choice makes IT comfortable.
While our survey shows some winners and
losers among vendors providing the software
and systems for private clouds — we’ll get
into that later — what’s more interesting is an
apparent swing in thinking about which technologies are most important for building a
successful cloud. The takeaway here is that
what was important to early adopters didn’t
necessarily stay important to mainstream
users. This too is unusual. It indicates either
that unique needs drove early adopters, or
that the technology itself has evolved in


terms of how it tackles the problems of the
modern datacenter, even as users were happily moving from project to production.
We think both are true. Early adopters likely
realized they were spending too much time
on the plate-spinning that typified datacenter
operations before pervasive virtualization and
the automation that comes with private
Figure 2

clouds. However, two years ago, the technology was far from baked. Heck, it’s still not
completely baked if you want to pursue the
darlings of the trade press, OpenStack and its
offshoots. VMware, meanwhile, has (fairly quietly) built up its private cloud arsenal; for most
private cloud adherents, this is the way to go.
VMware’s software isn’t inexpensive, but the

Approach to New Technology Adoption
Which of the following best describes your organization’s IT practices and outlook when adopting new technology?
2014

2012

Bleeding edge; new features can’t come fast enough

3%
2%
Leading edge; we adopt faster than others in our industry

21%
20%
Current; we keep up with others in our industry

59%
56%
Old school; we don’t adopt new technology until we have to

17%
22%
Base: 242 respondents in November 2013 and 389 in April 2012
Data: InformationWeek Private Cloud Survey of business technology professionals at organizations with 50 or more employees

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Download

For most enterprises, DR can be done across
company-owned or blue-chip colocation sites.
That tactic lets old-guard IT pros sleep better.

Resistance Is Futile?
Before we get into the whys and hows of private cloud adoption, let’s look at why today’s

Figure 3

Reasons for Not Adopting a Private Cloud
What are your main reasons for not pursuing a private cloud strategy?
2012

Note: Three responses allowed
Base: 56 respondents in November 2013 and 189 in April 2012 not using a private cloud

R

11%
8%

20%
Other

9%

Haven’t considered it

12%
6%

Investigated and found it too new and untested

14%
13%

Need different staffing

14%
14%

Investigated and found we are not prepared

18%
8%

Investigated and found it too complex and expensive

32%
26%

Applications don't support the cloud model

28%
No budget for new initiatives

Other IT projects take priority

32%

32%
17%

33%

41%

51%

2014

Investigated and found it’s not a fit at this time

Buying power and influence are
rapidly shifting to service
providers. Where does that leave
enterprise IT? Not at the cutting
edge, that’s for sure: Only 19%
are increasing both the number
and capability of servers, budgets
are level or down for 60%, and
just 12% are using new
microserver technology.

only way IT gets to work on new initiatives is
by automating the old stuff, and that makes
the cost worthwhile.
It’s interesting that satisfaction with private
clouds seems to come at the expense of public
and hybrid models. We saw a five-point increase
in the percentage of respondents saying they’re
phasing out their public cloud use — though
similar to 2012, 21% say they will eventually use
the public cloud but aren’t today. Of those using or planning to use the public cloud in 2012,
11% said “no” to the hybrid cloud model; that’s
increased to 19% now. This is likely due to the
nature of private cloud users today (the majority of IT shops) compared with then (early
adopters who like to experiment).
The public cloud can be a great place for
testing and business continuity, but tools capable of duplicating and deploying internal
systems into the public cloud are just now
coming to market. VMware has its own public
cloud offering, but costs are not yet in line
with Amazon and its ilk — and likely won’t be
if the Google-driven price wars keep up. We’re
talking a 60% slash in block storage costs.


29%

2014 State of Server
Technology

reports

Don’t see a need

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tions not supporting a cloud model, lack of
budget, no perceived need, and 20% who just
hadn’t considered it. Today, the top answer is
no need, followed by “investigated it and found
it not a fit.” The percentage
saying they haven’t considered private cloud fell from
20% to just 9%. Those respondents who say they did investigate but found it too
untested has doubled, from
6% in 2012 to 12% now.
So whereas in 2012 many
dismissed private clouds out
of hand, today, the eschewers
are classic — well, laggards.
They’ll do it when and if the
technology they’re using
runs out of steam or simply
no longer supports the business. What would persuade
them to consider moving
faster? Then, as now, significant operational and capital
R7591213/4
expense savings.

Other

4%
5%

11%
15%

More mature products and services

22%

16%

Successes at other organizations like ours

16%
20%

Industry standards for product integration and management

25%
23%

Lower cost to entry

A compelling technical advantage

Significant capital cost savings

Significant operational cost savings

47%

48%
45%

54%

61%
62%

abstainers are holding back and how their rea- most common case with this group. Back in
soning differs from two years ago. The first thing 2012, the biggest reason for not pursing a prito note is that private cloud eschewers are in vate cloud was that other projects took priorthe laggard camp. Today, 23% say they’re not ity; that justification was followed by applicapursuing the technology, and Figure 4
the Rogers Innovation AdopReasons to Consider a Private Cloud
tion Curve pockets the last
What factors would compel you to consider a private cloud?
16% of adopters as laggards.
2014
2012
We will admit that the term
“laggard” is pejorative, and
that there are good reasons
these shops aren’t on the
bandwagon. Typically, they
don’t have a need pressing
enough to justify the disruption of a private cloud. Remember all those small businesses that happily chugged
along on their AS/400s in the
’90s while the rest of us where
in the midst of the clientserver revolution? Sometimes
when things aren’t broke, you
don’t fix them.
And that appears to be the

4%
6%

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No Fear, No Loathing
We offered non-cloud-user respondents a
list of 13 complications that could sink a pri-

vate cloud, from orphaned applications to an
inability to hire and keep staff with the necessary skills. In 2012, most of the fears on this list

Figure 5

Perceived Private Cloud Issues
What are the main problems you would envision with a private cloud?


9%
Other

5%

7%
3%

Runaway automated processes

13%
9%

Orchestrating new application and VM deployments

25%
11%

Vendor lock-in to a private cloud product set or partner program

19%
13%

Orphaned applications

13%
16%

Managing software and VM OS licensing

16%
16%

Integrating new hardware and software

18%
19%

Maintaining private cloud software

18%
17%
Controlling VM sprawl

Lack of standards

Increased capital costs

21%

20%
24%

27%

32%
24%

23%

Increased troubleshooting difficulty

34%

38%
Increased operational cost and complexity

Inability to hire and maintain staff with the necessary skills

2012

43%

2014

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garnered between 15% and 25% of responses, meaning worries ranged across the
board. The only exception was increased cost
— that was cited by 38% in 2012 and still
leads the list with 43% today. Other fears exceeding the 25% mark in this year’s survey,
besides cost: increased troubleshooting issues, inability to find qualified staff, and increased capital costs. Interestingly, vendor
lock-in, which was picked by 25% in 2012, is
down to just 11% now; see Figure 5.
Our take is that nonadopters simply don’t
wrestle with the management challenges
most enterprises face today — much as the
AS/400 crowd simply brought their systems
up and let them run, sometimes for years,
without much intervention.
On the flip side, those who have private
clouds in production seem delighted with the
results. On our five-point scale, where 1 is
“completely unsuccessful” and 5 is “completely successful,” any rating that exceeds 4.0
implies a very happy user community. Responses in the 3.0 to 4.0 range are typical for
mainstream technology. In 2012, early
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adopters loved their clouds; when asked
about success in meeting IT goals, no response drew lower than a 3.6 in 2012, and
four of the 10 goals were rated between 4.0
and 4.2. The top responses — more efficient
use of hardware and better scalability — were
no surprise. Those were prime private cloud
selling points from the get go.
Somewhat more surprising: Reliability and
better use of IT’s time also rated 4.0. And it’s
this better use of time that you should be
striving for. You aren’t going to get much in
the way of new staffing, so if you can free up
half or more of your operations team to do
other things, you’ve made a huge win.
Now that the early majority has joined early
adopters, you might expect the exuberance
level to moderate. You’d be wrong. Again, all
IT goals were rated 3.6 or higher, but this year,
six were rated 4.0 and above, and top responses were up a tenth of a point, to 4.3. It’s
remarkable — even the “business-user selfservice portal” aspect of private cloud gets a
3.6 rating. We expected this to be at the bottom of the list because, frankly, the idea


sounds better in vendor PowerPoints than it
works in practice.
Moreover, some recent adopters aren’t necessarily what you’d call classic technology
leaders. One IT manager at a natural gas distribution company says his organization deFigure 6

cided to outsource its entire datacenter to an
IBM private cloud. His reasoning? IBM could
do a better job than his team, and private
cloud technology made it a cost-effective option. The project started two years ago and is
now in full production. He expects to see

Success of Private Cloud
How would you describe the overall success of your private cloud?
2014

2012

A complete success

17%
14%
Very successful

47%
57%
Somewhat successful

36%
28%
Somewhat unsuccessful

0%
1%
A complete failure

0%
0%
Base: 113 respondents in November 2013 and 83 in April 2012 using a private cloud

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some cost savings in the next one to two
years — and by any measure, he’s delighted
with the results.
This is in marked contrast to those who are
in the planning phase. For that group, just as
in 2012, most IT goals were rated in the midto high threes on our scale, which we characterize as cautious optimism. These people are
essentially late adopters, always a wary, even
skeptical group, so those findings aren’t surprising. It’s likely that they’ll be fairly delighted
with the results — if they acquire or develop
the expertise they need to succeed in what’s
becoming a fairly competitive market for private cloud skills. That’s a big “if.”
As is usually the case with a new technology, even when IT loves it, translating success
from the datacenter to the business is tricky.
When we asked those using private clouds
about success in meeting business goals, in
2012, the responses that got the best marks
(3.9 or 3.8) had to do with budgetary savings.
While CXOs love to see IT costs held in check,
at the time we thought, “Hopefully there are
other business successes to celebrate be-


yond just saving a buck.”
And so it is this year. Every single metric we
offered but one got a score of 3.9. Joining the
three cost-saving criteria were meeting ser vice-level agreements, better alignment with

business needs, and improved quality control.
The only metric that didn’t get a 3.9 was the
same one at the bottom of the pile in 2012:
the ability to charge back or track expenses to
business units. Let’s face it — CIOs will do al-

Figure 7

Private Cloud Timeline
How long did it take to bring your private cloud from concept to production?
2014

2012

Less than six months

19%
26%
More than six months but less than one year

34%
29%
12 to 18 months

26%
27%
More than 18 months

11%
13%
Don’t know

10%
5%

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3.6
3.7

3.6

Better average application performance

Business user self-service portal for select IT services

3.8

3.9

Better peak application performance

3.6

3.9
3.9

Shorten time to deliver applications to the business

4.0
3.9

Better disaster recovery

More efficient use of IT's time

Standardized OS builds

3.9

4.1
4.0

4.1

4.2
4.0

Better overall reliability

Better scalability

4.3
4.2

More efficient use of hardware

1 Completely unsuccessful

4.3
4.2

will perceive their technology line items as
big, fat costs they can’t control. It’s ingrained
in the American psyche to abhor such costs
(think taxes). We almost never see a
Figure 8
chargeback plan, IT or otherwise,
that’s popular with the business, so it
Success in Meeting IT Goals
How successful is your private cloud in meeting the following IT goals? Please use a scale of 1 to 5, where
makes sense for CIOs to resist.
1 is “completely unsuccessful” and 5 is “extremely successful.”
If you’re in this rut, don’t panic. Busi2014
2012
ness benefit will by necessity lag IT
benefit. If your private cloud has
freed up staff time, that’s half a win.
The other half is to be smart about
getting those freed-up people working on things that directly, and visibly,
benefit the business.
Extremely successful 5

most anything to avoid being a chargeback
cost. It’s a recipe for unpopularity. No matter
how good a job IT does, business managers

R7591213/8
Note: Mean average ratings


Private Cloud: The Last Nail In
APM’s Coffin?
One IT discipline that was completely broken by the private cloud is
classic application performance management. Virtualization made life hard
for APM tools, which typically rely on
fully understanding the static application deployment model and then re-

porting on the performance of various pieces.
Still, we were surprised when our 2013 APM
Survey showed the use of these tools in serious retreat, even as a new breed of APM vendor tried to fill the void with predictive systems. The problem? Filling the void wasn’t
what IT needed. After all, we’ve complained
for years about an inability to align operations
with the needs of the business, and APM
alone wasn’t doing the job. Static tools might
tell you about impending problems, but without the mobility and control inherent in a private cloud, there just wasn’t a lot IT could do
about them — at least not quickly.
Products seeking to replace old-guard APM
tools have evolved in two directions. Either
they attempt to maintain maps of what was
running where by observing and then tracking an application’s dependencies, or they’re
outcome-based and use synthetic transactions to show what users are experiencing.
The idea: Understand what components of
your apps aren’t running well, and then use
synthetic transactions to tell you what that
means to users. Together the two can help IT
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FAST FACT

65%
of respondents are using
VMware products as part
of their private clouds.


reports

tune the system to meet needs in near real
time. Will it be inexpensive? No, but it may be
worthwhile. We discuss APM in much more
depth in our report.
The upshot: Whether by using new APM
products or, more likely, the APM capabilities
built into private cloud software itself along
with some ad hoc, internally built monitoring
tools, IT has become significantly more responsive because of the private cloud, and
that alone is a reason for celebration.
But that doesn’t mean there aren’t still challenges. The biggest is one that’s been top of
mind from the advent of cloud computing: integration. IT pros read about startups that live
in the cloud and hear line-of-business managers who’ve purchased their own softwareas-a-service apps brag about the efficiency
and cost effectiveness of these one-off uses,
and they start to get that sick-in-the-pit-ofthe-stomach feeling about the integration
mess that will soon land in their laps.
In that light, it’s not surprising that the three
challenges that top the list for new private
clouds are integrating existing IT products,


Figure 9

Success in Meeting Business and Process Goals
How successful is your private cloud in meeting the following business and process goals? Please use a scale of 1 to 5,
where 1 is "completely unsuccessful" and 5 is "extremely successful."
2014

2012



Ability to meet service-level agreements

3.9
3.6
Lower capital costs over time

3.9
3.9
Improved alignment between IT costs and business needs

3.9
3.6
Lower total cost of ownership

3.9
3.8
Improved quality control

3.9
3.7
Lower operational costs over time

3.9
3.8
Ability to charge back to track expenses to business units

3.4
3.3

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bringing IT staff skills up to snuff, and updating the infrastructure (see Figure 10).
As the early majority of IT shops move into
Figure 10

Challenges Encountered When Launching a
What were the main hurdles you overcame to launch your private cloud?
2012


15%

1%

Other

5%

6%

Creating runbooks

Employee resistance

16%
19%

27%
19%

Inventorying existing applications and services

17%

Managing automation

25%

26%
30%

Acquiring cloud software and hardware

27%
23%

Making the business case for private cloud

Updating our infrastructure

Acquiring employee skill sets

Integrating existing IT products

43%

51%

51%
52%

56%
59%

2014

the private cloud, issues like making the business case for the technology become more
pronounced. So does managing automation,
as these are organizations that likely had
Private Cloud found ways to be happy
with old-school APM systems that could report
on problems, even if IT
did need days to weeks
to do anything about the
issues uncovered.

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Not All Smooth Sailing
Even the most successful private clouds aren’t
without operational
problems. Overall, these
systems still use immature technology that requires admins with skill
and determination. In
2012, respondents worried about software licensing, a lack of stan-

dards, virtual machine sprawl, and troubleshooting. This year, top issues are increased operational costs, VM sprawl, keeping
skilled staff, and, again, software licensing.
Vendors should take heed: These concerns
point to where private cloud technology
needs to go.
Take licensing. Even just two years ago,
some vendors were hesitant to let their software run in virtual machines. That problem
has mostly been addressed; now at issue is
the number of instances and how to bill for
software that runs in a private cloud. This becomes even touchier as more shops use their
private clouds for disaster recovery, which can
come with big new software licensing bills
(see Figure 11).
One big change is the type of services offered from private clouds. In 2012, SaaS and infrastructure-as-a-service were the most popular services delivered; that’s changed to Saas
and platform-as-a-service this year, with IaaS
falling behind by 14 points. This, too, makes a
lot of sense. Early adopters were likely to be
companies that could immediately benefit
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Figure 11

Private Cloud Issues
What are the main problems you've encountered with your private cloud?

7%
4%


12%
7%


14%
7%


27%
17%


15%



20%

20%
20%

22%
22%


23%


24%
Lack of standards

28%

31%

31%

27%

27%
15%

27%
28%

26%



2012

34%

2014

pect will be the dominant service for IT shops.
Other unexpected moves? A decrease in the
percentage of organizations that upgraded
their apps to run in a private cloud
and an increase in the number of
shops building their own clouds
rather than bringing in consultants
or vendor professional services.
That’s in contrast to those now in
the planning stages. Forty-one percent of late adopters expect to upgrade their enterprise apps —
never a simple, politically popular,
or inexpensive process, as we saw
in our 2014 Application Consolidation Survey. This alone is likely a
leading reason why late adopters
are late.
Again, it may be that as late
adopters get their private clouds
going, they’ll be happily surprised
about their ability to keep the apps
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sions of the same application —
4%
5%

business compared with typical enterprises. If
anything, we’re surprised that PaaS managed
even such a close second to SaaS, which we ex-

Other

from cloud technology, even if it wasn’t fully
baked, because they were more likely to be
providing infrastructure services to lines of

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Which technologies needed to be updated or replaced to build your organization's private cloud?
2012

Note: Multiple responses allowed

29%
Identity management

17%
Application modeling

Performance management

24%
24%

28%
24%
Systems management

Operating systems

Enterprise applications

29%
28%

31%
34%

42%
33%

33%
34%
Virtualization technology

Networking equipment

Storage equipment

Network design

Security products

33%
32%

36%
37%

40%
37%

38%
33%

Configuration and service provisioning software

Storage design

Server hardware

32%

39%

40%

45%

2014

9%

Tech Updates Needed to Build a Private Cloud

5%

Figure 12

private clouds. It’s fair to say that the glowing
results revealed by this survey are largely attributable to one vendor: VMware. Now almost 20 points ahead of
Microsoft and Cisco,
VMware dominates the list
of vendors used in deployments. We offered 19 options, and 65% of respondents are using VMware
products as part of their
private clouds, and that
even with open source options in consideration.
While VMware was the
big winner, Citrix and NetApp gained some ground,
up four and five points, respectively. Dell and EMC
were big losers, with sevenand eight-point drops.
Cisco and Microsoft were
small losers, each with a
three-point drop. That may
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not mean that Cisco gear
Programming languages and environments

Vendor Blanket Bingo
We saw some interesting movement in the
list of vendors respondents use to implement

14%
17%

sooner or later, software vendors will stop
supporting that decade-old version of your
software, even if it suits your needs just fine.

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in particular is being used less as part of a private cloud; it’s fair to say that its engagements
seem to be with large businesses, while

VMware’s is across the board. Particularly for
those in the planning stages, VMware is dominant. A large airline now in the design phase

Figure 13

Importance of Private Cloud Features

Chargeback billing or tracking

Runbook automation

Bare-metal provisioning

2.8

2.8
2.8

3.1

3.2
3.3

3.0
Service catalogue

Self-service portal


3.2

3.2
3.2

3.2
3.1

Support hybrid mode (public and private cloud)

Delegated administration

3.0

3.3

3.4
3.5

3.4
3.3
Demand-based auto-scaling

Application deployment templates

3.5
3.4
Audit logs

Application mobility

3.7
3.5

3.8
3.8
VM mobility

3.5
3.5

2012

4.0
3.9
Application performance management

1 Not important

Very important 5

2014

Capacity rights management, i.e., permission to not only spin up a VM,
but how many, how much storage, etc.

Please rate the importance of the following features when selecting private cloud technology, using a scale of 1 to 5, where 1 is “not important”
and 5 is “very important.”

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cites a good number of blue-chip players as
critical to its private cloud plan, including
Cisco, EMC, Microsoft, NetApp, and of course
VMware. In contrast, a major player in the hospitality industry has partnered with BMC, EMC,
IBM, Oracle, Red Hat — and VMware.
Overall we see a focus on upgrading servers
and reworking storage systems rather than
virtualizing networks. We think it’s likely that
the software-defined networking movement,
which is new since late 2011, has most IT
shops taking a wait-and-see approach. In the
meantime, they’re busily implementing private clouds as envisioned by VMware in its
vSphere product line.
The same is true for those in the planning
stages. VMware will be used by 69% of these
respondents, with Microsoft named by 57%
— both saw seven-point bumps over 2012.
Oracle is a surprise winner here too: 30% say
it will be part of the plan, up 10 points for a
50% increase over 2012. That likely means
adoption of Fusion middleware, finally.
But the biggest gain of all was for OpenStack.
In 2012, just 4% thought they’d use it. Now
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19% have OpenStack in their plans. We suspect
that there are two groups in this late-adopter
set. The larger, we believe, comprises smaller,
single-datacenter shops for whom business is
not strictly dependent on a leading-edge IT infrastructure. The other is highly complex environments and probably governmental entities.
These shops, we believe, are more likely to find
the OpenStack offering appealing than products from VMware, Microsoft, or others. CA and
BMC did well in our vendor list, too, which
tends to confirm our belief that these late
adopters are not strictly small companies.
One vendor that ceded significant ground
among planners is Hewlett-Packard, which
lost more than half of its support with a 15point drop. This is very bad news for a company that’s put a lot of emphasis on its public
and private cloud capabilities.
We didn’t ask about white-box vendors for
networking, servers, or storage — but we wish
we had. What seems to be clear is that the private cloud is shaping up to be a software play,
with the software largely coming from established players, and from OpenStack and its


constituents. Specialty players like Eucalyptus,
RightScale, VCE, Nimbula, and Piston Cloud remain within the margin of error for our survey,
among both private cloud users and planners;
none was cited by more than 3% in our survey
(see Figure 50).
Private cloud builders aren’t completely
turning on vendors of higher-priced gear, but

it does appear that VMware has convinced IT
that the choice of underlying hardware is not
as important as it once was. The result: a slow
movement away from the usual hardware
vendors as the providers of infrastructural direction. We saw some of that in our 2014 State
of Servers poll.
If you’re worried about the efficacy of pri-

Figure 14

Use of Chargeback
Does your organization use chargeback within your private cloud?
2014

2012

Yes, we charge departments and projects for resources

22%
22%
Yes, but for monitoring and cost awareness only

24%
18%
No

49%
51%
Don’t know

5%
9%

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vate cloud technology, you should feel assured that it’s worth the commitment. Once
in place, unless you’ve done it wrong, you will
see lower operational costs and be able to reclaim some of your existing staff’s valuable
time. It’s easy to take away from the typical
trade press the message that you really need
to wait and see how software-defined networking turns out, or whether open source
products like CloudStack and OpenStack are
solid enough for the mainstream.
Don’t listen, and don’t stay on the sidelines
too long or you’ll never get the expertise you
need. Get your technology where you feel
comfortable, whether from VMware or a longterm strategic partner like IBM or Oracle. All
the big vendors have plays. The bottom line is
that private cloud technology is a boon for
most IT shops. If you’re not sure whether you
should worry about SDN, or private cloud, the
answer is that you probably don’t need to.
Those who do know exactly who they are and
can believe our survey respondents — private
cloud is no passing hype.


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APPENDIX

reports



Figure 15

Types of Private Clouds Offered
Which types of private clouds do you offer your organization?
2014

2012

SaaS

40%
39%
PaaS

38%
31%
IaaS

23%
37%
All of the above

26%
24%

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Figure 16

Private Cloud Across Multiple Data Centers
Does your private cloud extend across multiple data centers?
2014

2012

Yes

60%
59%
No

35%
36%
Don’t know

5%
5%


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Figure 17

Movement Among Data Center Locations
Does IT move VMs, applications, and data among data center locations?
2014

2012

Yes

71%
70%
No

26%
26%
Don’t know

3%
4%
Base: 68 respondents in November 2013 and 49 respondents at organizations with a private cloud extending across multiple data centers


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Figure 18

Private Cloud Requirement for New Applications
Does your organization require that all new applications be able to take advantage of your private cloud?
2014

2012

Yes; no exceptions

6%
3%
Yes, with some exceptions

42%
34%
Only for server applications destined for our private cloud

18%
28%
No

32%
29%
Don't know

2%
6%


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Figure 19

Required App-Level Features and Functions
What features and functions are required at the application level?
2014

2012


70%
78%
Dynamic scaling of services

68%
72%
Lossless session failover

55%
48%
Base: 75 respondents in November 2013 and 50 in April 2012 with private cloud requirements for new applications


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Figure 20

Dealing With Legacy Applications
How did your organization handle legacy applications?
2014

2012

Replaced them with newer applications

35%
36%
Upgraded to cloud-ready applications

28%
43%
Rewrote them to support our private cloud

21%
19%
Other

4%
5%
No change

35%
29%


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Figure 21

Approach Taken to Build a Private Cloud
Which of the following best describes your approach to building your private cloud?
2014

2012

Used internal expertise

33%
24%
Used consultants

10%
15%
Used vendor professional services

8%
11%
Mix of internal expertise and consultants

28%
26%
Mix of internal expertise and vendor professional services

19%
22%
Other

2%
2%


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Figure 22

Acquiring Knowledgeable Staff
How did your organization acquire staff knowledgeable in private cloud technologies?
2014

2012

Trained existing staff

76%
89%
Augmented existing staff with consultants

41%
32%
Hired new staff

28%
16%
Outsourced the management

5%
5%
Other

2%
1%


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Figure 23

Build vs. Bundle
Did your organization buy a private cloud via a preconfigured bundle, like Vblocks, or build from individual products
and product suites?
2014

2012

Individual products

55%
69%
Open source and commercial management software

21%
6%
Bundle

19%
17%
Other

5%
8%


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Figure 24

Private Cloud Vendors Used
Which vendors did you use for your private cloud?
2012

25%



R

10%
6%
Other

0%
1%

Nimbula

0%
1%

Eucalyptus

2%
4%

VCE

3%
4%

CloudStack

4%
6%
CA

BMC

6%
6%

7%
5%

OpenStack

17%
EMC

Red Hat

18%
17%

20%
15%
NetApp

Oracle

21%
20%

24%
25%
IBM

Citrix

24%
20%

27%
28%
HP

Dell

Cisco

Microsoft

VMware

31%

38%

46%
49%

46%
49%

56%

65%

2014

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Figure 25

Budget to Build a Private Cloud
Approximately what percentage of your overall IT budget was devoted to building your private cloud?
2014

2012

Less than 10%

21%
26%
11% to 20%

18%
20%
21% to 30%

18%
20%
31% to 40%

10%
7%
41% to 50%

7%
6%
More than 50%

9%
10%
Don’t know

17%
11%


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Figure 26

Budget to Maintain a Private Cloud
What percentage of your overall IT budget is devoted to maintaining your private cloud?
2014

2012

Less than 10%

31%
33%
11% to 20%

28%
26%
21% to 30%

12%
16%
31% to 40%

5%
5%
41% to 50%

2%
4%
More than 50%

4%
4%
Don't know

18%
12%


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Figure 27

Impact of Industry Standards on Product Selection
To what degree did industry standards play a role in product selection?
2014

2012

A lot

35%
44%
Some

46%
43%
None

12%
12%
Don’t know

7%
1%


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Figure 28

Use of Public Cloud Services
Does your organization use public cloud services?
2014

2012

Yes

39%
45%
Yes, but we are phasing them out

13%
8%
Not yet, but we will

21%
22%
No, and no plans

27%
25%


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Figure 29

Use of Hybrid Cloud Model
Does your organization use or plan to use a hybrid cloud model, where applications may run, in whole or in part, in
both the public and private cloud?
2014

2012

Yes; we’re using a hybrid cloud model

35%
40%
Yes; we plan to use a hybrid cloud model

37%
36%
No

19%
11%
Don’t know

9%
13%
Base: 68 respondents in November 2013 and 55 in April 2012 using a private cloud and using or planning to use public cloud services


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Figure 30

Reasons for Not Using a Public Cloud
What are the main reasons your organization is phasing out, or has decided to not use, public cloud?
2014

2012

Security and privacy concerns

73%
68%
Regulatory compliance or legal restrictions

33%
39%
Peak loads could wipe out cost savings

29%
11%
Inability to ensure SLA commitments

27%
21%
Inability to ensure application availability

22%
25%
Other

9%
11%
Base: 45 respondents in November 2013 and 28 in April 2012 phasing out or not using public cloud services


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Figure 31

Stage of Private Cloud Deployment
At what stage is your organization in deploying your private cloud?
2014

2012

Research and planning

42%
24%
Making the business case

18%
18%
Evaluating products

23%
22%
Running a pilot project

12%
24%
Moving from pilot to production

5%
12%
Base: 73 respondents in November 2013 and 117 in April 2012 testing or starting a private cloud project


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Figure 32

Steps Taken to Build a Private Cloud
What steps has your organization taken to build a private cloud?
Completed

In progress

Not started

Built the underlying server, storage, and networking infrastructure

18%

49%

33%

Deployed hypervisors and management framework

17%

49%

34%

Built a self-service portal

14%

40%

46%

Automated subsystems

8%

33%

59%

Inventoried applications and workflows

8%

44%

48%

Created required services like runbooks and CMDBs

8%

25%

67%

Created application templates

6%

31%

63%

Integrated subsystems

5%

30%

65%

Orchestrated automation across multiple subsystems

30%

70%

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Base: 73 respondents testing or starting a private cloud project
Data: InformationWeek 2014 Private Cloud Survey of 242 business technology professionals at organizations with 50 or more employees, November 2013


R

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Figure 33

Expected Private Cloud Timeline
How long do you expect it will take to bring your private cloud from concept to production?
2014

2012

Less than six months

3%
9%
More than six months but less than one year

30%
33%
12 to 18 months

27%
30%
More than 18 months

27%
17%
Don’t know

13%
11%


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Figure 34

Expected Success of IT Goals
How successful do you predict your private cloud will be in meeting the following IT goals? Please use
a scale of 1 to 5, where 1 is “completely unsuccessful” and 5 is “extremely successful.”

3.7

3.8
3.4
Better average application performance

Better peak application performance

3.5

3.8
3.8

Shorten time to deliver applications to the business

4.0
3.8
More efficient use of IT's time

3.8
3.7

3.8
3.9
Better disaster recovery

Standardized OS builds

Better overall reliability

3.8
3.9

3.8
3.9

4.1
3.9
Better scalability

Business user self-service portal for select IT services

2012

4.0
4.1
More efficient use of hardware



2014

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Figure 35

Expected Success of Business and Process Goals
How successful do you predict your private cloud will be in meeting the following business and process goals? Please
use a scale of 1 to 5, where 1 is “completely unsuccessful” and 5 is “extremely successful.”
2014

2012

Lower total cost of ownership

3.7
3.8
Lower operational costs over time

3.7
3.8
Improved quality control

3.7
3.8
Lower capital costs over time

3.7
3.8
Improved alignment between IT costs and business needs

3.7
3.7
Ability to meet service-level agreements

3.6
3.8
Ability to charge back to track expenses to business units

3.1
3.5

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Figure 36

Expected Challenges of Launching a Private Cloud
What are the main hurdles you believe you will need to overcome to launch your private cloud?
2012

22%
Other

4%
4%

15%

15%
17%
Creating runbooks

Inventorying existing applications and services

34%
19%

Acquiring cloud software and hardware

27%
23%

Making the business case for private cloud

29%
29%
Managing automation

24%
Employee resistance

Acquiring employee skill sets

Updating our infrastructure

Integrating existing IT products

33%

36%

41%
41%

44%

55%
58%

2014

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R
45%

29%

21%

22%


18%
23%

27%

Other

4%
3%

6%
10%


12%
16%


16%
17%



19%
17%


19%

30%
27%


Lack of standards

22%
24%


23%
21%


22%

Table of Contents


24%

33%

30%

2014



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Figure 37

Potential Private Cloud Problems

What are the main problems you foresee with your private cloud?
2012

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Figure 38

Necessary Tech Updates to Build a Private Cloud
Which technologies will you need to update or replace to build your private cloud?

15%

23%
21%
Operating systems

Storage equipment

6%

27%
30%

27%
25%
Application modeling

Programming languages and environments

39%


Server hardware

Performance management

Networking equipment

Identity management

Virtualization technology

Systems management

Network design

Security products

Storage design

27%

29%

32%

33%
31%

33%
31%

34%
35%

30%

37%
33%

38%

38%

43%

45%

48%
35%

Configuration and service provisioning software

27%
Enterprise applications

43%

2012

49%

2014

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Figure 39

Importance of Private Cloud Features
Please rate the importance of the following features when selecting private cloud technology, using a scale of 1 to 5, where 1 is “not important”
and 5 is “very important.”
2014



3.3
2.8
3.0
Chargeback billing or tracking

Runbook automation

3.0

3.1
3.2
Bare-metal provisioning

Service catalogue

3.3
3.4

3.3
3.4
Delegated administration

3.3
3.4

3.4
Application deployment templates

Support hybrid mode (public and private cloud)

3.6

3.6
3.4
Demand-based auto-scaling

Self-service portal

3.5
3.5

3.6
3.6
Audit logs

Application mobility

3.6
3.6

3.6
3.7

Capacity rights management, i.e., permission to not only spin up
a VM, but how many, how much storage, etc.

3.7
3.7
VM mobility


1 Not importnat

3.7
3.8

Very important 5

2012

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Figure 40

Plans for Chargeback Use
Will your organization use chargeback within your private cloud?
2014

2012

Yes, we will charge departments and projects for resources

14%
20%
Yes, but for monitoring and cost awareness only

27%
38%
No

32%
27%
Don’t know

27%
15%


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Figure 41

Planned Private Cloud Offerings
Which types of private clouds will IT offer your organization?
2014

2012

SaaS

36%
43%
PaaS

36%
25%
IaaS

30%
22%
All of the above

27%
34%


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Figure 42

Planned Private Cloud Scope
Will your private cloud extend across multiple data centers?
2014

2012

Yes

42%
58%
No

29%
32%
Don’t know

29%
10%


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Figure 43

Planned Movement Among Data Center Locations
Will IT move VMs, applications, and data among data center locations?
2014

2012

Yes

87%
84%
No

3%
4%
Don’t know

10%
12%
Base: 31 respondents in November 2013 and 68 in April 2012 at organizations with plans to extend a private cloud across multiple data centers


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Figure 44

Planned Private Cloud Requirement for New Apps
Will your organization require that all new applications be able to take advantage of your private cloud?
2014

2012

Yes; no exceptions

1%
2%
Yes, with some exceptions

36%
41%
Only for server applications destined for our private cloud

36%
29%
No

15%
14%
Don’t know

12%
14%


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Figure 45

App-Level Feature and Function Requirements
What features or functions will be required at the application level?
2014

2012

Dynamic scaling of services

73%
70%

67%
67%
Lossless session failover

50%
60%
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Figure 46

Plan for Handling Legacy Applications
How do you plan to handle legacy applications?
2014

2012

Upgrade to cloud-ready applications

41%
44%
Replace them with newer applications

36%
51%
Rewrite to support our private cloud

21%
28%
Other

3%
4%
No change

27%
20%


R

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Figure 47

Planned Approach for Building a Private Cloud
Which of the following best describes your planned approach for building a private cloud?
2014

2012

Will use internal expertise

19%
19%
Will use consultants

11%
15%
Will use vendor professional services

6%
9%
Mix of internal expertise and consultants

34%
27%
Mix of internal expertise and vendor professional services

30%
30%


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Figure 48

Strategy for Acquiring Knowledgeable Staff
How will your organization acquire staff knowledgeable in private cloud technologies?
2014

2012

Train existing staff

88%
81%
Augment existing staff with consultants

43%
50%
Hire new staff

16%
22%
Outsource the management

8%
9%


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Figure 49

Planned Approach for Private Cloud Purchase
Will your organization buy a private cloud via a preconfigured bundle, like Vblocks, or build from individual products
and product suites?
2014

2012

Individual products

36%
38%
Bundle

16%
16%
Open source and commercial management software

16%
15%
Don’t know yet

32%
31%


R

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Figure 50

Planned Private Cloud Vendor Use
Which vendors do you plan to use for your private cloud?
2012



10%
5%
Other

1%
1%

Piston Cloud

1%
0%

Nimbula

3%
4%

VCE

3%
4%

RightScale

3%
3%

Eucalyptus

7%
4%

CloudStack

7%
1%

CA

7%
4%
BMC

NetApp

14%
12%

19%
4%

OpenStack

EMC

19%

24%
20%
Red Hat

HP

26%

39%
24%

29%
34%
IBM

Dell

Oracle

Citrix

Cisco

Microsoft

VMware

20%

29%
29%

30%

34%
38%

44%

50%

51%

57%

62%

69%

2014

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Figure 51

Estimated Budget to Build a Private Cloud
Approximately what percentage of your overall IT budget do you expect to devote to building your private cloud?
2014

2012

Less than 10%

23%
15%
11% to 20%

25%
24%
21% to 30%

14%
25%
31% to 40%

8%
9%
41% to 50%

1%
3%
More than 50%

1%
2%
Don’t know

28%
22%


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Figure 52

Estimated Budget to Maintain a Private Cloud
What percentage of your overall IT budget do you expect to devote to maintaining your private cloud?
2014

2012

Less than 10%

36%
29%
11% to 20%

28%
23%
21% to 30%

8%
16%
31% to 40%

1%
6%
41% to 50%

1%
2%
More than 50%

1%
1%
Don’t know

25%
23%


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Figure 53

Impact of Industry Standards on Product Selection
To what degree will industry standards play a role in product selection?
2014

2012

A lot

41%
42%
Some

47%
54%
None

3%
1%
Don’t know

9%
3%


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Figure 54

Public Cloud Use
Does your organization use public cloud services?
2014

2012

Yes

27%
28%
Yes, but we are phasing them out

10%
14%
Not yet, but we will

41%
30%
No, and no plans

22%
28%


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Figure 55

Hybrid Cloud Use
Does your organization use or plan to use a hybrid cloud model, where applications may run, in whole or in part, in
both the public and private cloud?
2014

2012

Yes; we’re using a hybrid cloud model

6%
6%
Yes; we plan to use a hybrid cloud model

56%
61%
No

14%
13%
Don’t know

24%
20%
and using or planning to use public cloud services


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Figure 56

Reasons for Not Using or Phasing Out Public Cloud
What are the main reasons your organization is phasing out, or has decided to not use, public cloud?
2014

2012

Security and privacy concerns

78%
82%
Regulatory compliance or legal restrictions

57%
45%
Inability to ensure SLA commitments

39%
27%
Inability to ensure application availability

26%
31%
Peak loads could wipe out cost savings

17%
18%
Other

13%
4%
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Figure 57

Job Title
Which of the following best describes your job title?

Other
Consultant
Line-of-business management

Non-IT executive management
(C-level/VP)

2%5%

1

IT executive management
(C-level/VP)

3%
19%

14%

28%
29%

IT director/manager

IT/IS staff



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Figure 58

Company Revenue
Which of the following dollar ranges includes the annual revenue of your entire organization?

Don’t know/decline to say

1

Less than $6 million

11%

11%
$6 million to $49.9 million

Government/nonprofit

10%
17%
$5 billion or more

10%
9%
14%

$1 billion to $4.9 billion

6%

12%



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2%

2%

5%

3%

Data: InformationWeek 2014 Private Cloud Survey of 242 business technology professionals at organizations with 50 or more employees, November 2013

Other

Utilities

3%

4%

Telecommunications/ISPs

2%

Retail/e-commerce

Nonprofit

2%

Media/entertainment

6%

Manufacturing/industrial, noncomputer

2%

Logistics/transportation

IT vendors

3%

Insurance/HMOs

Healthcare/medical

Government

Financial services

Energy

Electronics

9%

10%

10%

12%

13%

Table of Contents

Education

2%

Consumer goods

6%

Consulting and business services

4%

Construction/engineering

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Figure 59

Industry

What is your organization’s primary industry?

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Figure 60

Company Size
Approximately how many employees are in your organization?

1

50-99

10,000 or more

16%
24%
100-499

21%
5,000-9,999

7%

22%

10%

1,000-4,999
500-999
Data: InformationWeek 2014 Private Cloud Survey of 242 business technology professionals at organizations
with 50 or more employees, November 2013


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