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Glueing hybrid cloud - problem or opportunity?

Stuart Lauchlan Profile picture for user slauchlan July 10, 2013
Summary:
Hybrid clouds are the way ahead, according to new SAP-sponsored research, but there are obstacles in the way in terms of integration challenges - or they opportunities for third parties?

sven_denecken
Sven Denecken, SAP

Cynical as we all are these days, few would expect a study into cloud deployment models sponsored by SAP not to come to the conclusion that hybrid approaches are where it's at for organisations.

And so we might approach a new study entitled Hybrid: The Next Generation Cloud with a degree of in-built scepticism.

But it's the sub-head for the report that explains its interest: Interviews Among CIOs of the Fortune 1000 and Inc. 5000.

Back in April, SAP commissioned Wakefield Research to poll 52 CIOs using in-depth telephone interviews to explore attitudes about the hybrid cloud.

Among the 52 CIOs, 22 respondents were from Fortune 1000 companies, and 30 respondents were from companies in the Inc. 5000 Fastest Growing Companies in America.

So it's a relatively small user base to poll, but a high quality one. And the conclusions make for some interesting reading.

I had the chance to chat with Sven Denecken, VP and Head of Co -Inovation, SAP Cloud business unit, who gave me his interpretation of some of the key findings.

1
Let's start with the top-line. According to the study:
  • 87% of CIOs feel that cloud solutions are important to their business.
  • Nearly as many CIOs (83%) assign similar importance to on-premise solutions.

So, with love for both on and off premise running about even, what's wanted it seems is a way to get the best of both worlds. That would be hybrid, of course.

The study suggests that CIOs have already come to this conclusion themselves:

  • Among CIOs using cloud applications, 67& say they have already adopted some hybrid tools.
  • Among hybrid users, 75% feel IT processes are less complex after migrating to hybrid cloud services.
  • Among non-hybrid users, 50% feel cloud and hybrid cloud solutions are better suited than on-premise solutions for their business needs.

Denecken says:

"The benefits of the cloud stand out more in hybrid mode. You get to keep what you have but also spend on the cloud. It's not a case of rip and replace. You can augment what you already have."

4
But it's not all sunshine in the garden. There are barriers to adoption:
  • Some 75% of non-hybrid cloud CIOs feel there is resistance within their companies to implementing hybrid cloud services.
  • In these companies, IT staff (42%) and other C-level executives (42%) are equally resistant to implementing new hybrid cloud services.
  • Most CIOs (52%) feel on-premise products remain more secure than cloud-based.

The Denecken perspective:

"Of the two main barriers, security is still the top convent. The discussion is moving away from traditional security and more towards where the data resides.

"There is also the internal barrier of people in the business asking 'do I want to put this bit outside of the company' and keep this bit inside?"

3
For those with hybrid inclinations, a major challenge is going to be integration with the existing on-premise estate. If this goes astray, then problems will occur:
  • 64% of CIOs that use the hybrid cloud say internal IT is primarily responsible for integrating hybrid cloud services.
  • Among hybrid cloud users, more than 1 in 4 (29%) feel the process of integrating services in a hybrid cloud has run behind schedule.

Denecken admits:

"Pre-packaging can bring you 80% of the way there. There's no such thing as out of the box though, whether SAP to SAP or SAP to non-SAP. We pre-package as much as can to bring down the service ratio, but there will always be integration needs."

So that would indicate an opportunity for the systems integrators that have previously thrived on the back of SAP on premise implementation - the Accentures and the Capgeminis - as well as for the new breed of cloud-focused services firms, such as Bluewolf.

Of minor note:

The most utilized cloud applications are:

  • CRM (76%)
  • Sales and marketing processes (60%)
  • Employee or client communication (57%)
  • HR (55%).

2
But in terms of resources most commonly hosted in a hybrid configuration, the ranking becomes:
  • Data management (29%)
  • Sales and marketing (29%)
  • Project management(26%)
  • HR (24%).

CRM now seems to be a pure cloud first choice for most.

 

Verdict

An interesting piece of self-validating research for SAP and its hybrid cloud approach.

The integration issue is the most interesting aspect for me. As the new cloud world order takes shape, the 'two-tier' deployment is clearly on the rise.

We've seen NetSuite take this policy for a long time, Salesforce.com has been playing nicer with SAP of late in pursuit of the same objective, while SAP has been playing two tier with itself in many cases.

The integration challenges posed do represent an opportunity for the SIs that have been such a large part of the SAP ecosystem to carve a new role for themselves, while also created fresh market entry conditions for challenger brands in this space.

Graphics: SAP/Wakefield Research

Disclosure: at time of writing, Salesforce.com and SAP are premium partners of diginomica. 

 

 

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