This document discusses opportunities in cloud computing. It begins by defining cloud computing as the delivery of applications over the Internet on demand. It notes that while similar to past technologies like ASPs, cloud computing is important because it allows users to consume technology like utilities without large upfront costs. The document then covers the various categories of cloud computing and provides market estimates, identifying software as a service as the largest segment. It also discusses challenges preventing wider adoption and opportunities in each cloud category.

1. Opportunities in Cloud COMPUTING Investment Thesis & Market Map | Rei Kasai | Q3 2010 | reikasai@gmail.com Source: Flickr.com/COTE

2. CLOUD COMPUTING IS THE DELIVERY OF APPLICATIONS OVER THE INTERNET CLOUD COMPUTING IS NOT NEW… DO YOU REMEMBER ASPS? RK Consulting Cloud Computing is Internet-based computing for both Enterprise and Consumer markets, whereby software and information are provided to computers and other devices on-demand, like a public utility. –Wikipedia Source: Wikipedia, Forrester

4. Solution-packaged – a “turnkey” offering, integrates required resources

5. Self-service – admin, provisioning; may require some “on-boarding” support

6. Elastic scaling – dynamic and fine-grained

7. Use-based pricing – supported by service metering

8. Accessible via the Internet/IP – ubiquitous (authorized) network access

9. Standard UI technologies – browsers, RIA clients and underlying technologies

10. Published service interface/API – e.g., web services APIs-IDC Source: Lone Wolf Librarian Source: IDC, Infoworld, Lone Wolf Librarian

11. THE MATURATION AND ADOPTION OF VIRTUALIZATION HAS ENABLED CLOUD TO FINALLY EMERGE CLOUD COMPUTING IS FINALLY TOP OF MIND OF CIOS RK Consulting Source: Gartner, Adapted from http://www.flickr.com/photos/mobian/3426349990/

12. HOWEVER, MAINSTREAM ADOPTION IS STILL SEVERAL YEARS OUT… PER GARTNER’S 2010 EMERGING TECHNOLOGIES HYPE CYCLE ANALYSIS, CLOUD IS CURRENTLY “IN THE PEAK OF INFLATED EXPECTATIONS.”= 2 TO 5 YEARS FROM MAINSTREAM ADOPTION RK Consulting Cloud Computing in 2008 (First Time on Hype Cycle) Source: Gartner

13. GOOG & MSFT ARE THE ONLY ONES THAT HAVE OFFERINGS IN ALL THREE CATEGORIES OF THE CLOUD MERRILL LYNCH HAS IDENTIFIED THE FOLLOWING DOZEN WITH A STRATEGY TO PARTICIAPTE IN CLOUD COMPUTING RK Consulting The overall Cloud market is a multi-billion dollar opportunity. IDC and Merrill forecast the TAM in 2013 to be approximately $44B and $108B respectively, which equals approximately 10% to 12% of total IT spend. Infrastructure SaaS Platform Source: IDC, Merrill Lynch

17. Manage those resources based on scalability and availability needs

18. E.g. Amazon S3THE CATEGORIES OF CLOUD IN MORE DETAIL… RK Consulting Source: Coord, Merrill Lynch

19. WHILE TAM ESTIMATES DRAMATICALLY RANGE FROM $44B TO $108B BY IDC AND MERRILL RESPECTIVELY, BOTH AGREE THAT SAAS WILL BE THE LARGEST PIECE OF THE CLOUD PIE TAM ESTIMATES BY CLOUD CATEGORY IN 2013 RK Consulting Source: IDC, Merrill Lynch

20. CIOS ARE MOVING MISSION CRITICAL APPLICATIONS TO THE CLOUD PER IDC RK Consulting 67.3% Collaboration applications 66.9% Web applications/Web serving 59.4% Data Back-up or Archive services 55.6% Business apps (CRM, HR, ERP) 55.1% Personal productivity apps 54.8% Data/Content Distribution services 52.9% Storage capacity on demand 51.3% IT Management software 50.6% Server capacity on demand 49.8% Business Intelligence/Analytics 49.1% Application dev/test/deploy platform 48.6% IT/Information Security 0% 10% 20% 30% 40% 50% 60% 70% 80% Q: Rate your likelihood to pursue the cloud model for the following (Scale: 1 = Very Unlikely 5 = Very Likely) Source: IDC Enterprise Panel, 3Q09, n = 263, September 2009

21. PAIN POINTS OF CIOS = OPPORTUNITIES IN CLOUD RK Consulting 87.5% Security 83.3% Availability 82.9% Performance 81.0% On-demand paym’t model may cost more 80.2% Lack of interoperability standards 79.8% Bringing back in-house may be difficult 76.8% Hard to integrate with in-house IT 76.0% Not enough ability to customize 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Q: Rate the challenges/issues of the 'cloud'/on-demand model Source: IDC Enterprise Panel, 3Q09, n = 263, September 2009

24. Help enterprise adopt cloud

25. Drive operational expenses for cloud downOPPORTUNITIES IN INFRASTRUCTURE SEGMENT RK Consulting Source: RK Consulting

27. Opportunities are:

28. Help adopt BI in the cloud

29. Integrate enterprise/private data better with the cloud

30. Compliance- Moving data outside the firewall and into the cloud requires new processes to ensure data is not compromised

31. Security management- Distributed cloud environment is a nightmare for IT admins. OPPORTUNITIES IN PLATFORM SEGMENT RK Consulting Source: RK Consulting

33. Collaboration/social services to augment existing enterprise products

34. Billing/monetization services for SaaS/Cloud servicesOPPORTUNITIES IN SOFTWARE SEGMENT RK Consulting Source: RK Consulting

36. Focus on early-stage mobile and cloud technologies

37. 8+ years of mobile, 11+ in software

38. M&A strategy for a mobile payments venture

39. BD and Product leader for Dexterra, a multi-OS (iOS, Symbian, RIM, and Windows Mobile) mobile applications platform for carriers and ISVs

40. Customer development for Net6 (Acquired by Citrix for $50M in 2002), a mobile internet platform for consumer internet

41. IT Consulting for Octane Software (Acquired by E.piphany for $3.2B in 1999), first internet-based CRM software for enterprise

42. UC Berkeley-Haas MBA

43. Contact info: reikasai@gmail.com, www.linkedin.com/in/reikasaiABOUT THE AUTHOR- REI KASAI