Presentation from IBM/RTL in Pune

Will Cloud Computing erode the IT Services Business?

Anand Deshpande September 2012

10 September 2012 1

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anand@persistent.co.in

Coming to

New Delhi, India

2016

Cloud Computing is imminent …

● It will be driven by economics ...

… about 30% reduction in costs!

– Cost of infrastructure

– Cost of management of infrastructure

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By operating at scale, improving utilization, simplifying operations, standardizing, increasing reliability, reducing energy and cooling

• hardware costs can be reduced 33-70 percent • maintenance costs can be reduced up to 50 percent • support costs can be reduced by as much as 33

percent • floor space/facility costs can be reduced 33-50

percent

http://www-935.ibm.com/services/us/its/html/green-datacenter-svcs-landing.html February 3, 2012 4

Cloud computing will see mainstream deployments in the second half of 2013.

● Cloud leaders (pre-2010) … Amazon, Salesforce.com

● Major cloud strategy announcements in 2012 from

– Microsoft, IBM, HP, Dell, EMC/Cisco

– Vmware

– Oracle, SAP

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February 3, 2012 6

Cloud is about simplicity!

Mobile devices are the de-facto consumption device

● BYOD is the hottest disruption in the enterprise.

● Mobility is not just small screen. There is more.

– Presence

– Location

– HTML5

– Task specific apps

● Build for Mobile device first!

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Cloud and Mobility will grow in tandem. They are interdependent!

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Cloud computing will create jobs in India!

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Really? If every CIO saves 30% from their budget … world’s software business is significantly down!

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𝑥𝑖 > (𝑥𝑖 − 𝜕𝑖)

ADM business will bear the brunt

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0%

20%

40%

60%

80%

100%

120%

Pre Cloud Post Cloud

Business Apps

ADM

Packaged Software

Infrastructure

30% reduction in cost!

Buying Decisions are moving from the CIO to C-Suite and the Line of Business Heads

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As the CIO’s budgets shrink, Line of Business (LOB) Execs are making technology buying decisions

● LOBs build projects like “products” rather than IT Services

– Incremental, agile,

● Will consider new set of vendors … opportunity for different set of vendors.

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The cost of product development has gone down significantly!

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Team Size

Time Period

Traditional Ways

On the Cloud

If it costs less to build a product …

● Different kind of products will be built.

● Different kinds of people will invest to build products

● If product development costs are not significant, do I need to go offshore at all?

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Data on the cloud is enabling new data-centric business models.

February 3, 2012 16

We live in a world of apps. Apps, apps everywhere!

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Enterprise Value is Shifting to Data

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Mainframe

Operating Systems

ERP

Apps

Data

2013 2006

Database

1995 1985 1975 10 September 2012

There will be a hierarchy of apps with different price points; all available on a pay-per-use business model.

Business Process Specific Apps

Task/Device Specific Apps

Traditional Applications will

be commoditized on the cloud.

Aggregate Data

Enterprise Data Public Data

February 3, 2012

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India: the source

and the market

for innovation 20 February 3, 2012

Cloud computing is an excellent

opportunity for Indian

Industries to collaborate and

disrupt

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Healthcare Tourism Education

Retail Logistics Research

Comments?

Anand Deshpande anand@persistent.co.in

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