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ChangeWave Research: Corporate Cloud Computing Trends This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved. Corporate Cloud Computing Trends A Look at Public, Private and Hybrid Cloud Demand Jean Crumrine and Sayon Deb Overview: A new ChangeWave survey on business cloud computing trends shows continued strong demand for public, private and hybrid cloud. A total of 1,097 respondents involved in their company’s IT buying decisions participated in the July 9-30 survey, including 445 whose company currently uses public cloud. ChangeWave Research is a service of 451 Research. Corporate Public Cloud Current Usage. A total of 41% of corporate respondents say their company currently uses applications that run on public cloud computing services – unchanged at the all-time high for the second consecutive survey. We note that larger companies are more likely to be using public cloud than smaller companies. Spending Plans – Public Cloud Users. Looking at spending plans among companies currently using public cloud, 35% say they plan on increasing cloud spending over the next 6 months. While that’s 2-pts lower than our previous survey in April, it’s less than the 4-pt decline at the same time last summer. August 13, 2014

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ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

Corporate Cloud Computing Trends A Look at Public, Private and Hybrid Cloud Demand Jean Crumrine and Sayon Deb Overview: A new ChangeWave survey on business cloud computing trends shows continued strong demand for public, private and hybrid cloud. A total of 1,097 respondents involved in their company’s IT buying decisions participated in the July 9-30 survey, including 445 whose company currently uses public cloud. ChangeWave Research is a service of 451 Research.

Corporate Public Cloud Current Usage. A total of 41% of corporate respondents say their company currently uses applications that run on public cloud computing services – unchanged at the all-time high for the second consecutive survey.

We note that larger companies are more likely to be using public cloud than smaller companies. Spending Plans – Public Cloud Users. Looking at spending plans among companies currently using public cloud, 35% say they plan on increasing cloud spending over the next 6 months. While that’s 2-pts lower than our previous survey in April, it’s less than the 4-pt decline at the same time last summer.

August 13, 2014

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

2

A total of 8% of public cloud users say they’re decreasing spending or have no plans to use cloud at all, while 55% say spending will remain the same. Cost Savings. Is cloud computing helping companies save money? Among current users, 57% report their companies are experiencing overall cost savings by using public cloud (16% Significant Savings; 41% Slight Savings). Which of the following statements best describes the cost savings - if any - your company is experiencing by using public cloud computing services instead of other available solutions (e.g., dedicated servers, private cloud)?

Current Survey Jul ‘14

We Experience Significant Cost Savings By Using Public Cloud Services

16%

We Experience Slight Cost Savings By Using Public Cloud Services

41%

We Do Not Experience Cost Savings By Using Public Cloud Services

21%

We Pay More for Public Cloud Services Compared to Other Available Solutions

4%

Don’t Know/NA 17% Effect on Other Areas of IT. We also asked respondents in companies currently using public cloud about its impact on other areas of IT, including budgets and staffing. By a 13-pt margin (24% vs. 11%), more companies say public cloud spending is decreasing their budget for other IT products and services vs. increasing it. In terms of IT staffing, 17% of companies who use cloud say spending is causing a decrease in their total number of IT staff (including facilities and datacenter staff). Just 6% say it’s causing an increase. Clearly, public cloud usage is having an impact on the way companies spend their overall IT budgets and their staffing needs.

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

3

Corporate Sentiment Towards Cloud Services The survey asked all respondents (both cloud users and non-users) to rate the reliability and security of cloud computing services, where 1 is Very Unreliable/ Unsecure and 10 is Very Reliable/ Secure. Cloud Reliability Ratings. The mean reliability rating among all corporate respondents is 7.0, unchanged for the sixth survey in a row. As our surveys have consistently shown, perceived reliability is stronger among companies currently using the cloud (7.7) vs. non-users (6.5). Cloud Security Ratings. The trend is even more pronounced when it comes to ratings for security of cloud computing services. The mean rating among all respondents is 6.1 – unchanged from previously. But as the following chart shows, major differences exist between companies who currently use the cloud (7.0) vs. those who do not (5.3).

We also asked about the importance of being offered a “security guarantee” by cloud service providers. Three-quarters of respondents (74%) say it’s Very Important that cloud providers offer a guarantee, and another 22% say Somewhat Important. Companies not using cloud place a greater importance on security guarantees than current users. As such, security guarantees give cloud service providers an opportunity to attract new customers.

Additional Findings on Public Cloud The survey also looked at the three primary ways companies use cloud computing services:

Software as a Service (SaaS; 69%) remains most popular – though down 3-pts Infrastructure as a Service (IaaS; 33%) – down 3-pts Platform as a Service (PaaS; 29%) – down 2-pts

Looking ahead at spending plans for the next six months, SaaS registers the highest spending growth increase – with 24% saying their company will increase spending vs. just 2% decrease.

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

4

At the same time, both IaaS (20% Increase vs. 1% Decrease) and PaaS (11% Increase vs. 1% Decrease) are also seeing growth.

Leading Vendors. We asked respondents which vendors their company plans to increase cloud-related spending on over the next 6 months:

Microsoft (24%), Google (19%) and Salesforce.com (16%) top the list of Platform Providers best positioned for increases in cloud spending over the next 6 months.

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

5

Amazon (21%) remains the top Hosting company in terms of increased cloud spending, with a sizeable lead over Rackspace (8%). Among Telecom Providers, AT&T (8%) maintains a slight lead over Verizon/Terremark (7%).

Applications Supported in the Cloud. A total of 47% of companies who use public cloud say they support Email Systems, while 38% support CRM applications.

Other top application areas include Databases (32%), Web Applications (30%), and Collaboration Tools (26%).

Corporate Private Cloud

Current Usage. The ChangeWave survey also looked at corporate use of private cloud. Three-in-ten respondents (31%) report using private cloud computing services – up 1-pt since April 2014.

We note that large companies (over 1,000 employees) are far more likely to use private cloud than smaller companies (52% vs. 23%, respectively).

Private clouds are also much more likely to be hosted in Company-Owned Datacenters (57%) as opposed to Third-Party Providers (26%) or Virtual Private Clouds (13%).

Spending Plans – Private Cloud Users. A total of 38% of companies currently using private cloud say they’ll increase their private cloud spending over the next 6 months – unchanged from previously.

Over the next 6 months, does your company plan to increase its overall spending on private cloud computing, decrease its spending, or will your company's overall cloud computing spending remain the same compared to the previous 6 months?

Companies Currently Using Private Cloud

Current Survey Jul ‘14

PreviousSurvey Apr ‘14

Increase Overall Spending 38% 38%Remain the Same 53% 53%Decrease Overall Spending 3% 4%No Plans to Use Private Cloud Computing in Next 6 Months

6% 5%

Just 9% say their company’s private cloud spending will decrease (or there will be no spending at all) – also unchanged.

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

6

Corporate Hybrid Cloud

We also looked at corporate hybrid cloud deployments – combinations of two or more clouds (e.g., public/private) interacting to form a unified but flexible infrastructure. While the percentage of businesses using hybrid cloud is still much lower than either public or private, hybrid deployments have inched higher over the past year.

Current Usage. One-in-ten (10%) report their company is using hybrid cloud deployments – unchanged from the previous survey, but 2-pts higher than a year ago.

On-Premise (55%) accounts for more than half of hybrid clouds being deployed by corporate respondents, while 35% say Off-Premise.

Future Usage. Looking at the next six months, 13% of respondents say their company will be deploying a hybrid cloud.

Bottom Line: The latest ChangeWave survey shows continued strong demand for public, private and hybrid cloud computing.

The following summary chart shows current vs. future usage for each type of cloud deployment. Note that hybrid cloud shows the greatest future growth rate (10% current usage vs. 13% next 6 months).

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

7

Cost savings remain a big benefit of public cloud use, with nearly three-in-five current users saying their company has reduced costs by using public cloud. At the same time, corporate cloud spending is continuing to squeeze the IT budget for other non-cloud services and IT staffing.

Within public cloud computing, Software as a Service (SaaS) is showing the highest spending growth, though Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) are also seeing increased spending going forward.

Cloud security continues to be a major concern – especially among non-users – and the survey suggests that “security guarantees” can help cloud providers differentiate themselves to attract new customers.

Summary of Key Findings

The ChangeWave Research Network is a group of 25,000 highly qualified business, technology, and medical professionals in leading companies of select industries—credentialed professionals who spend their everyday lives working on the frontline of technological change. ChangeWave surveys its Alliance members on a range of business and investment research and intelligence topics, collects feedback from them electronically, and converts the information into proprietary quantitative and qualitative reports.

Reliability and Security Ratings for Public Cloud

Mean Reliability Rating: 7.0 out of a possible 10 –

unchanged from Apr. Among companies already

using cloud it’s 7.7; for non-cloud users it’s 6.5

Mean Security Rating: 6.1 out of a possible 10 –

unchanged from Apr. Among companies already

using cloud it’s 7.0; for non-cloud users it’s 5.3

Security Guarantee 74% say it’s Very Important

for cloud providers to offer a “Security Guarantee”

Uptick in Private Cloud Adoption 31% report their company

currently uses Private Cloud – up 1-pt

38% plan to increase private cloud spending over next 6 months

Hybrid Cloud Demand 10% of companies currently

use hybrid cloud deployment – unchanged from previously

Future usage projected to be 13% – next 6 months

Top Vendors for Future Public Cloud Spending Increases

Platform Providers Microsoft (24%) Google (19%) Salesforce (16%)

Hosting Companies Amazon (21%) Rackspace (8%)

Strong Corporate Demand for Public Cloud 41% report their company

currently uses Public Cloud – holding steady at the highest level in a ChangeWave survey

35% of current cloud users plan to Increase their cloud spending over next 6 months – while 2-pts lower than April, it’s less than the 4-pt decline a year ago

Public Cloud Usage Software as a Service

(SaaS) – 69% Infrastructure as a Service

(IaaS) – 33% Platform as a Service

(PaaS) – 29%

Continued Cost Savings 57% of public cloud users

say their company is experiencing cost saving using cloud vs. other solutions

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

8

Table of Contents Summary of Key Findings ............................................................................................ 7 The Findings .................................................................................................................. 9

Corporate Public Cloud .............................................................................................. 9

Corporate Sentiment Towards Cloud Services ................................................... 12 Additional Findings on Public Cloud .................................................................... 15

Corporate Private Cloud ........................................................................................... 21

Corporate Hybrid Cloud ........................................................................................... 23

ChangeWave Research Methodology ........................................................................ 25 About ChangeWave Research .................................................................................... 25 About 451 Research .................................................................................................... 25

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

9

The Findings Introduction: A new ChangeWave survey on business cloud computing trends shows continued strong demand for public, private and hybrid cloud. A total of 1,097 respondents involved in their company’s IT buying decisions participated in the July 9-30 survey, including 445 whose company currently uses public cloud. ChangeWave Research is a service of 451 Research.

Corporate Public Cloud Current Usage. A total of 41% of corporate respondents say their company currently uses applications that run on public cloud computing services – unchanged at the all-time high for the second consecutive survey.

Does your company or organization currently use any applications that run on public cloud computing services (i.e., "renting" or provisioning the remotely hosted computing resources of a service provider) or have you used public cloud computing services over the past 12 months?

Current Survey Jul ‘14

Previous Survey Apr ‘14

Previous Survey Jan ‘14

Previous Survey Oct ‘13

Previous Survey Jul ‘13

Yes 41% 41% 41% 40% 39% No 58% 59% 58% 59% 61% Don't Know 2% 1% 1% 1% 1%

We note that larger companies are more likely to be using public cloud than smaller companies.

Current Public Cloud Usage: Breakout By Company Size Total

Respondents Under 1,000 Employees

Over 1,000 Employees

Yes 41% 40% 44%No 58% 58% 54%Don't Know 2% 1% 2%

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

10

Spending Plans – Public Cloud Users. Looking at spending plans among companies currently using public cloud, 35% say they plan on increasing cloud spending over the next 6 months. While that’s 2-pts lower than our previous survey in April, it’s less than the 4-pt decline at the same time last summer.

A total of 8% of public cloud users say they’re decreasing spending or have no plans to use cloud at all, while 55% say spending will remain the same. And over the next 6 months, does your company plan to increase its overall spending on public cloud computing, decrease its spending, or will your company's overall cloud computing spending remain the same compared to the previous 6 months?

Companies Currently Using Public Cloud

Current Survey Jul ‘14

Previous Survey Apr ‘14

PreviousSurvey Jan ‘14

Previous Survey Oct ‘13

Previous Survey Jul ‘13

Increase Overall Spending 35% 37% 38% 37% 36%

Decrease Overall Spending 2% 2% 2% 3% 3%

Remain the Same 55% 55% 50% 52% 51%

No Plans to Use Cloud Computing in Next 6 Months

8% 6% 10% 8% 11%

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

11

Cost Savings. Is cloud computing helping companies save money? Among current users, 57% report their companies are experiencing overall cost savings by using public cloud (16% Significant Savings; 41% Slight Savings). Which of the following statements best describes the cost savings - if any - your company is experiencing by using public cloud computing services instead of other available solutions (e.g., dedicated servers, private cloud)? Current

Survey Jul ‘14

We Experience Significant Cost Savings By Using Public Cloud Services

16%

We Experience Slight Cost Savings By Using Public Cloud Services

41%

We Do Not Experience Cost Savings By Using Public Cloud Services

21%

We Pay More for Public Cloud Services Compared to Other Available Solutions

4%

Don’t Know/NA 17% Effect on Other Areas of IT. We also asked respondents in companies currently using public cloud about its impact on other areas of IT, including budgets and staffing. By a 13-pt margin (24% vs. 11%), more companies say public cloud spending is decreasing their budget for other IT products and services vs. increasing it. What effect - if any - does your company's spending on cloud computing have on your budget for other IT products and services? Would you say that spending on cloud computing is having no effect on your company's budget for other IT products/ services, is it increasing your budget for other IT products/services, or is it decreasing your budget for other IT products/services? Current

Survey Jul ‘14

Cloud Spending is Decreasing Company’s Budget for Other IT Products and Services

24%

Cloud Spending is Increasing Company Budget for Other IT Products and Services

11%

Cloud Spending is Having No Effect on Company Budget for Other IT Products and Services

53%

Don’t Know/NA 11%

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

12

In terms of IT staffing, 17% of companies who use cloud say spending is causing a decrease in their total number of IT staff (including facilities and datacenter staff). Just 6% say it’s causing an increase. And what effect - if any - does your company's spending on cloud computing have on the total number of IT staff (including facilities/datacenter staff) at your company? Would you say that spending on cloud computing is having no effect on the total number of IT staff at your company, is it increasing the total number of IT staff at your company, or is it decreasing the total number of IT staff at your company? Current

Survey Jul ‘14

Cloud Spending is Decreasing the Total Number of IT Staff

17%

Cloud Spending is Increasing the Total Number of IT Staff

6%

Cloud Spending is Having No Effect on the Total Number of IT Staff

67%

Don’t Know/NA 11% Clearly, public cloud usage is having an impact on the way companies spend their overall IT budgets and their staffing needs.

Corporate Sentiment Towards Cloud Services The survey asked all respondents (both cloud users and non-users) to rate the reliability and security of cloud computing services, where 1 is Very Unreliable/ Unsecure and 10 is Very Reliable/ Secure. Cloud Reliability Ratings. The mean reliability rating among all corporate respondents is 7.0, unchanged for the sixth survey in a row.

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

13

Thinking about cloud computing overall, how would you rate the reliability of the cloud computing services available today - where 1 is Very Unreliable and 10 is Very Reliable?

Mean (SD)

Very Unreliable

1 2 3 4 5 6 7 8 9

Very Reliable

10 7.0

(1.8) 1% 1% 3% 3% 11% 12% 24% 25% 14% 6%

As our surveys have consistently shown, perceived reliability is stronger among companies currently using the cloud (7.7) vs. non-users (6.5).

Cloud Security Ratings. The trend is even more pronounced when it comes to ratings for security of cloud computing services.

On the issue of security, how secure do you think data is when using the cloud computing services available today - where 1 is Very Unsecure and 10 is Very Secure?

Mean (SD)

Very Unsecure

1 2 3 4 5 6 7 8 9

Very Secure

10 6.1

(2.2) 4% 4% 7% 8% 13% 13% 21% 17% 9% 3%

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

14

The mean rating among all respondents is 6.1 – unchanged from previously. But as the following chart shows, major differences exist between companies who currently use the cloud (7.0) vs. those who do not (5.3).

We also asked about the importance of being offered a “security guarantee” by cloud service providers. Three-quarters of respondents (74%) say it’s Very Important that cloud providers offer a guarantee, and another 22% say Somewhat Important.

How important is it that cloud service providers offer a “Security Guarantee” to their customers?

Current Survey Jul ‘14

Previous Survey Apr ‘14

Very Important 74% 79%Somewhat Important 22% 18%Not Very Important 3% 2%Not At All Important 1% 1%

Companies not using cloud place a greater importance on security guarantees than current users. As such, security guarantees give cloud service providers an opportunity to attract new customers. Breakout by Current Cloud Users vs. Non-Users Current

Survey Jul ‘14

Current Cloud Users

Non-Users

Very Important 74% 68% 77%Somewhat Important 22% 29% 18%Not Very Important 3% 3% 2%Not At All Important 1% 0% 2%

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

15

Additional Findings on Public Cloud The survey also looked at the three primary ways companies use cloud computing services:

Software as a Service (SaaS; 69%) remains most popular – though down 3-pts Infrastructure as a Service (IaaS; 33%) – down 3-pts Platform as a Service (PaaS; 29%) – down 2-pts

With regard to public cloud computing, in which of the following ways does your company use cloud computing services? (Check All That Apply) Current

Survey Jul ‘14

PreviousSurvey Apr ‘14

Previous Survey Jan ‘14

Previous Survey Oct ‘13

Previous Survey Jul ‘13

Software as a Service (SaaS) - (e.g., Salesforce.com)

69% 72% 71% 72% 70%

Platform as a Service (PaaS) - (e.g., Google App Engine),

29% 31% 32% 31% 31%

Infrastructure as a Service (IaaS) - (e.g., Amazon EC2).

33% 36% 40% 37% 36%

Don't Know 5% 4% 4% 3% 5%Other 4% 4% 4% 4% 4%

Looking ahead at spending plans for the next six months, SaaS registers the highest spending growth increase – with 24% saying their company will increase spending vs. just 2% decrease. At the same time, both IaaS (20% Increase vs. 1% Decrease) and PaaS (11% Increase vs. 1% Decrease) are also seeing growth.

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

16

For each of the following uses of cloud computing, do you expect your company to increase its spending on cloud-related services, decrease its spending, or will spending on cloud-related services remain the same over the next 6 months?

Increase Spending

Decrease Spending

Remain the

Same

No Spending in Next 6

Months, BUT Considering for Future

No Spending in Next 6

Months, and NOT

Considering for Future

Software as a Service (SaaS) - (e.g., Salesforce.com)

24% 2% 49% 7% 18%

Infrastructure as a Service (IaaS) - (e.g., Amazon EC2)

20% 1% 30% 14% 35%

Platform as a Service (PaaS) - (e.g., Google App Engine)

11% 1% 35% 18% 35%

Leading Vendors. We asked respondents which vendors their company plans to increase cloud-related spending on over the next 6 months: Microsoft (24%), Google (19%) and Salesforce.com (16%) top the list of Platform Providers best positioned for increases in cloud spending over the next 6 months. Amazon (21%) remains the top Hosting company in terms of increased cloud spending, with a sizeable lead over Rackspace (8%). Among Telecom Providers, AT&T (8%) maintains a slight lead over Verizon/Terremark (7%).

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

17

For which of the following public cloud computing vendors - if any - does your company plan on increasing its spending on cloud-related products and services over the next 6 months? (Check All That Apply)

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

18

Here are the complete results for cloud spending increases over the next six months:

Current Survey Jul ‘14

Previous Survey Apr ‘14

Previous Survey Jan ‘14

Previous Survey Oct ‘13

Previous Survey Jul ‘13

Platform Providers Microsoft 24% 27% 23% 23% 24%Google 19% 19% 17% 17% 17%Salesforce.com/Force.com 16% 17% 18% 18% 21%VMware/Cloud Foundry 7% 8% 11% 12% 8%Oracle 4% 5% 5% 6% 6%Intuit 3% 3% 2% 4% 3%Netsuite 2% 2% 2% 1% 1%RedHat/Open Shift 2% 2% 1% 3% 2%Other Platform Providers 3% 5% 6% 8% 7%Hosting Companies Amazon 21% 24% 24% 24% 21%Rackspace 8% 10% 11% 9% 10%GoDaddy 4% 6% 8% 8% 7%SoftLayer 2% 2% 1% 1% 1%Telecom Providers AT&T 8% 11% 14% 12% 13%Verizon/Terremark 7% 13% 7% 11% 10%Other Telecom Providers 3% 5% 5% 6% 5%Other IT Service Providers Dell 5% 2% 5% 5% 5%IBM 4% 5% 5% 6% 7%EMC/Mozy 3% 2% 4% 3% 2%Hewlett-Packard 2% 3% 3% 6% 5%Other 12% 10% 10% 13% 14%Don't Know 11% 9% 13% 8% 10%

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

19

Applications Supported in the Cloud. A total of 47% of companies who use public cloud say they support Email Systems, while 38% support CRM applications.

Other top application areas include Databases (32%), Web Applications (30%), and Collaboration Tools (26%).

And in which of the following areas does your company currently support applications that run on public cloud computing services? (Check All That Apply)

Current Survey Jul ‘14

Previous Survey Apr ‘14

Previous Survey Jan ‘14

Previous Survey Oct ‘13

Previous Survey Jul ‘13

Email Systems 47% 48% 49% 50% 45%Customer Relationship Management (CRM)

38% 40% 39% 39% 43%

Databases 32% 33% 33% 30% 29%Web Applications 30% 34% 33% 34% 32%Collaboration Tools 26% 29% 26% 31% 29%Mobile Applications 22% 22% 25% 21% 20%Business Intelligence/ Reporting and Analytics (BI)

20% 21% 23% 19% 18%

Document and Enterprise Content Management (ECM)

19% 23% 20% 22% 24%

Security 18% 19% 15% 16% 16%Test and Development 16% 17% 16% 17% 18%B2B e-Commerce (Business to Business)

15% 17% 16% 14% 16%

Disaster Recovery/Failover 15% 21% 20% 20% 22%Human Capital Management (HCM) 14% 17% 16% 14% 16%Supply Chain Management (SCM) 9% 8% 8% 7% 8%Enterprise Resource Planning (ERP)

8% 11% 12% 10% 11%

Legal and/or Regulatory E-Discovery

3% 4% 4% 5% 4%

Don't Know 4% 4% 3% 3% 2%Other 5% 3% 6% 5% 4%

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

20

Among those deploying cloud-based databases, 36% say they’ll increase spending on Backup Services and 34% on Web Applications

For those who deploy cloud-based databases (e.g. using Amazon RDS, Google Cloud SQL), which of the following cloud database-related services do you think your company will increase spending on over the next 6 months? (Check All That Apply)

Current Survey Jul ‘14

Previous Survey Jan ‘14

Previous Survey Jul ‘13

Backup Services 36% 36% 35% Web Applications 34% 30% 28% Additional Capacity (e.g., cloud-bursting) 26% 26% 23% Test and Development 21% 20% 19% Analytic Apps (e.g., BI/Reporting) 20% 18% 17% Enterprise Apps (e.g., ERP/CRM) 17% 18% 17% Department-Specific Apps 14% 13% 13% Transactional Apps 14% 11% 10% Other 1% 2% 1%

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

21

Corporate Private Cloud Current Usage. The ChangeWave survey also looked at corporate use of private cloud. Three-in-ten respondents (31%) report using private cloud computing services – up 1-pt since April 2014. Private cloud computing uses hardware dedicated to a single organization and is not shared by others. Private clouds can be built and run in your own data center or hosted by a third-party provider. Does your company or organization currently operate a private cloud, or do you currently use any private cloud computing services?

We note that large companies (over 1,000 employees) are far more likely to use private cloud than smaller companies (52% vs. 23%, respectively). Current Private Cloud Usage: Breakout By Company Size Total

Respondents Under 1,000

Employees Over 1,000 Employees

Yes 31% 23% 52% No 69% 77% 48%

Private clouds are also much more likely to be hosted in Company-Owned Datacenters (57%) as opposed to Third-Party Providers (26%) or Virtual Private Clouds (13%).

*Don’t Know/NA/Other = 3%

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

22

Moreover, the trend toward hosting and managing private cloud in company-owned datacenters is strongest among large companies (67% vs. 48% for smaller companies). Where Private Cloud is Hosted: Breakout By Company Size Total

RespondentsUnder 1,000Employees

Over 1,000 Employees

Company Managed in Company-Owned Datacenters

57% 48% 67%

Managed and Hosted By a Third-Party Provider

26% 31% 20%

Virtual Private Cloud 13% 17% 8% Other/Don’t Know/NA 4% 3% 6% Spending Plans – Private Cloud Users. A total of 38% of companies currently using private cloud say they’ll increase their private cloud spending over the next 6 months – unchanged from previously. Over the next 6 months, does your company plan to increase its overall spending on private cloud computing, decrease its spending, or will your company's overall cloud computing spending remain the same compared to the previous 6 months?

Companies Currently Using Private Cloud

Current Survey Jul ‘14

PreviousSurvey Apr ‘14

Increase Overall Spending 38% 38%Remain the Same 53% 53%Decrease Overall Spending 3% 4%No Plans to Use Private Cloud Computing in Next 6 Months

6% 5%

Just 9% say their company’s private cloud spending will decrease (or there will be no spending at all) – also unchanged.

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

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Corporate Hybrid Cloud We also looked at corporate hybrid cloud deployments – combinations of two or more clouds (e.g., public/private) interacting to form a unified but flexible infrastructure. While the percentage of businesses using hybrid cloud is still much lower than either public or private, hybrid deployments have inched higher over the past year.

Current Usage. One-in-ten (10%) report their company is using hybrid cloud deployments – unchanged from the previous survey, but 2-pts higher than a year ago. The term Hybrid cloud describes combinations of two or more clouds (e.g., public and private) that interact to create a unified but flexible infrastructure. Examples of corporate hybrid cloud deployments include using a vendor's Public cloud-based SaaS on a Private cloud, or taking a Private cloud's non-sensitive workloads during peak demand and shifting to a Public cloud.

Does your company or organization currently make use of any hybrid cloud deployments?

Current Survey Jul ‘14

Previous Survey Apr ‘14

Previous Survey Jan ‘14

Previous Survey Oct ‘13

Previous Survey Jul ‘13

Yes 10% 10% 9% 9% 8% No 90% 90% 91% 91% 92%

Looking at company size, larger companies (19%) are much more likely to deploy hybrid cloud than smaller companies (7%).

Current Hybrid Cloud Deployments: Breakout By Company Size Total

Respondents Under 1,000

Employees Over 1,000 Employees

Yes 10% 7% 19% No 90% 93% 81%

On-Premise (55%) accounts for more than half of hybrid clouds being deployed by corporate respondents, while 35% say Off-Premise.

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

24

Which of the following best describes the hybrid cloud model your company currently uses?

Current Survey Jul ‘14

PreviousSurvey Apr ‘14

Off-Premise Private Cloud + Public Cloud

35% 29%

On-Premise Private Cloud + Public Cloud

55% 64%

Don’t Know/NA 8% 5%Other 2% 2%

Larger companies (65%) are also more likely to be using On-Premise hybrid clouds than smaller companies (46%). Breakout By Company Size Current

Survey Jul ‘14

Under 1,000 Employees

Over 1,000 Employees

Off-Premise Private Cloud + Public Cloud

35% 39% 30%

On-Premise Private Cloud + Public Cloud

55% 46% 65%

Don’t Know 2% 4% 0% Other 2% 4% 0%

Future Usage. Looking at the next six months, 13% of respondents say their company will be deploying a hybrid cloud.

ChangeWave Research: Corporate Cloud Computing Trends

This information is from ChangeWave Research, a service of 451 Research, and contains confidential business information. It may not be copied or distributed without permission. ©2014 451 Research, LLC. All rights reserved.

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ChangeWave Research Methodology

This report presents the findings from a recent ChangeWave Research survey on corporate Cloud Computing. The survey was conducted July 9-30, 2014 and a total of 1,097 respondents involved in or knowledgeable about their company’s use of cloud computing participated. ChangeWave's proprietary research and business intelligence gathering system is based upon the systematic gathering of valuable business and investment information directly over the Internet from accredited members of its research network. The business and investment intelligence provided by ChangeWave provides a real-time view of companies, technologies, and consumer and business trends in key market sectors, along with an in-depth perspective of the macro economy – well in advance of other available sources.

About ChangeWave Research

ChangeWave Research, a service of 451 Research, is a survey research firm that identifies and quantifies change in corporate buying & business trends, telecom trends, and consumer spending & electronics trends. The ChangeWave Research Network is a group of 25,000 highly qualified business, technology, and medical professionals – as well as early adopter consumers – who work in leading companies of select industries. ChangeWave surveys its Network members weekly on a range of business and consumer topics, and converts the information into a series of proprietary quantitative and qualitative reports. ChangeWave delivers its products and services on the Web at www.ChangeWaveResearch.com. 451 Research, LLC, including its ChangeWave Research service, does not make any warranties, express or implied, as to results to be obtained from using the information in this report. Investors should obtain individual financial advice based on their own particular circumstances before making any investment decisions based upon information in this report.

About 451 Research

451 Research, a division of The 451 Group, is a leading global analyst and data company focused on the business of enterprise IT innovation. Clients of 451 Research – at end-user, service-provider, vendor, and investor organizations – rely on 451 Research’s insight through a range of syndicated research and advisory services to support both strategic and tactical decision-making. For additional information on 451 Research, go to: 451research.com.

For More Information:

ChangeWave Research Telephone: 301-250-2363 7101 Wisconsin Ave. Fax: 240-200-3988 Suite 1301 www.ChangeWaveResearch.com Bethesda, MD 20814 [email protected]