DRaaS Market - Outlook (2015-19) for Europe

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ResearchFox Consulting is an Indian market research and consulting firm based in Bangalore. We strive to provide our clients with research data and reports which they can trust and analyze. Insights gleaned from our detailed and comprehensive research reports helps our clients stay ahead of trends. ResearchFox serves clients with services from data collection to analysis and reports. ResearchFox has extensive sector expertise and its consultants are abreast of global trends and issues across industries. Our areas of expertise include Manufacturing, IT, FMCG, Healthcare, Automotive, Government Sector and NGO, BFSI and Retail.

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Copyright © 2015. ResearchFox Consulting Private Limited

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Tableof Contents

1. Introduction1.1. Report Description1.2. Objective1.3. Scope of the Research1.4. Regions Covered1.5. Key Takeaways1.6. Key Stakeholders1.7. Key Terminologies1.8. List of Abbreviations

2. Executive Summary2.1. Executive Overview

3. Research and Forecasting3.1. Research Methodology3.2. Forecasting Methodology

4. Industry Landscape4.1. Market Size and Growth4.2. Competitive Landscape4.3. Market Share4.4. Company Classification4.5. Region Outlook4.6. Market Metrics4.7. Porter's Five Forces Model4.8. Key Drivers Analysis4.9. Key Constraints Analysis4.10. Key Opportunities Identified4.11. Key Challenges Identified

5. Market Segmentation5.1. Region    5.1.1. Europe

    5.1.1.1.   Market Size and Forecasting    5.1.1.2.  Market Metrics    5.1.1.3.  Competitive Structure    5.1.1.4.  Key Drivers Analysis    5.1.1.5.  Key Constraints Analysis    5.1.1.6.  Key Opportunities Identified    5.1.1.7.  Key Challenges Identified    5.1.1.8.  Sub Segments

    5.1.1.8.1.  End User : Enterprise    5.1.1.8.2.  End User : Mid-market    5.1.1.8.3.  End User : Small Business

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    5.1.1.8.4.  Vertical : Financial Services    5.1.1.8.5.  Vertical : E-Commerce and Web    5.1.1.8.6.  Vertical : IT and Telecom    5.1.1.8.7.  Vertical : Healthcare    5.1.1.8.8.  Vertical : Manufacturing    5.1.1.8.9.  Vertical : Government    5.1.1.8.10.  Vertical : Others    5.1.1.8.11.  Storage Type : Less than 1 Tb.    5.1.1.8.12.  Storage Type : 1 Tb. to 10 Tb.    5.1.1.8.13.  Storage Type : Above 10 Tb.    5.1.1.8.14.  Deployment Model : Hardware to Cloud    5.1.1.8.15.  Deployment Model : Cloud to Cloud

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Introduction 01 5

1.  Introduction

1.1.  Report Description

Human beings have always tried to minimize disasters in any form, keeping safety and security of life and assets paramount. But we have not been successful enough to eliminate it completely. Organizations are unable to avert disasters but with better planning the effects of disaster can certainly be reduced. The main objective of a proper Disaster Recovery (DR) plan in a company is to minimize the time within which a business process must be restored after a major incident has occurred so as to avoid costly consequences associated with a break in business continuity.

But unfortunately, DR services come at a pretty high cost or with a weak commitment about the amount of data lost or time required to return back to its flow of operation after a major failure. In such a situation the cloud based DR solution, often referred to as DRaaS, works due to its pay-as-you-go model that comes at a lower cost and uses automated virtual platforms that minimizes the recovery time after a failure.

Definition of DRaaS: Disaster Recovery as a Service (DRaaS) is often referred to as a cloud based service for helping protect loss of data caused due to man-made or natural disaster apart from ensuring business continuity by minimizing downtime and disruption of services to its customers or employees.

In simple words DRaaS is defined as a service that enables the back-up and recovery of remote machines on a cloud based platform. It is primarily an Infrastructure as a Service (IaaS) solution that backs up designed system data on a remote offsite cloud server. It accepts real time Recovery Point Objective (RPO) and Recovery Time Objective (RTO) at times of disaster. Similar names to this include Recovery as a Service (RaaS), cloud DR or cloud DRP.

DRaaS provides similar services to that of an on-site or company maintained off-site Disaster Recovery Plan (DRP) facility which is cost effective, efficient and third party managed platform. A cloud based DR service provider facilitates users with storage space and regularly updates designated systems with client software installed on each system. Moreover, users have the option of adding, editing or deleting systems along with their storage capacity without worrying about the backend supported infrastructure.

The report titled Global Disaster Recovery-as-a-Service (DRaaS) Market till 2019 showcases an in-depth analysis of the overall DRaaS market in terms of market size, segmentation across regions (North America, Europe, APAC, South America, MEA), size of end-user (Enterprise, Mid-market, Small Business), Industry Vertical (Financial Services, E-Commerce and Web, IT and Telecom, Healthcare, Manufacturing, Government, Others), Storage Type (Less than 1Tb., 1TB. to 10 Tb., More than 10Tb.), DRaaS Deployment Model (Hardware to Cloud Disaster Recovery, Cloud to Cloud Disaster Recovery) and Service Provider Analysis (ResearchFox LAYERS). This report also forecasts the growth numbers till 2018 (on a YoY basis) and hence suggests the Compound Annual Growth Rate (CAGR) for the estimated period.

1.2.  Objective

1. Understand the Disaster Recovery-as-a-Service (DRaaS) market and hence forecast the same till 2019.2. Determine the market across Regions (North America, Europe, APAC, South America, MEA), Size of End-user (Enterprise, Mid-market, Small Business), Industry Vertical (Financial Services, E-Commerce and Web, IT and Telecom, Healthcare, Manufacturing, Government, Others), Storage Type (Less than 1Tb., 1TB. to 10 Tb., More than 10Tb.) and DRaaS Deployment Model (Hardware to Cloud Disaster Recovery, Cloud to Cloud Disaster Recovery).3. List down the drivers, constraints, opportunities and challenges for each of the sub-segments and how

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would it change in the short and longer time frame.4. Realise how drivers, constraints, opportunities and challenges would impact various business functions across regions.5. Perform a service provider analysis for DRaaS vendors through ResearchFox LAYERS.

1.3.  Scope of the Research

1. Strategic analysis and market focus2. Competitive landscape analysis3. Report the latest market and technology trends4. Strength, Opportunity and Attention (SOA) analysis

1.4.  Regions Covered

1. North America (USA, Canada, Mexico and others)2. Europe (UK, Italy, France, Germany and others)3. APAC (Australia, India, China, Japan, Singapore, and others)4. South America (Brazil, Argentina and others)5. MEA (South Africa, UAE and others)

1.5.  Key Takeaways

The research conducted to understand Global Disaster Recovery-as-a-Service (DRaaS) market in different regions of the globe has revealed some valuable insights. Some of the key take away points include:1. The Global DRaaS market has grown at a high pace in the last few years with the increase in awareness among customers to lose out of business due to an event of disaster. This trend in business is expected to grow further with a higher double digit growth rate of more than 50% till 2019.2. North America is expected to grow the fastest, Europe next to best.3. Financial Services to use DRaaS the most, manufacturing and government are the last to adopt.4. Enterprise users are expected to use this "as-a-service" technology to a larger extent and increase its market share in the near future.5. On-going trends in the DRaaS suggest increased emphasis on product development.6. Larger number M&A deals would drive market consolidation.

1.6.  Key Stakeholders

1. Service Providers: The DRaaS providers would understand the current market situation and can think on their growth path accordingly.2. Product Companies: Product companies often speculate on their success without having a grasp of the overall market situation. This report would help them get a sense of the overall situation before investing in developing a product.3. Global Investors: Global investors are always on a look out for emerging technologies or markets that would provide them with the best Return on Investment (RoI). This report would help identify the growth markets, which would yield better returns.4. Consulting and Advisory firm: The ResearchFox report would help consultants get a grip of the latest happenings in the DRaaS market.5. Industry Watchers: Industry and trend watchers are always referred to as trusted advisors who follow markets. The report would add to their knowledge repository, creating value

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for their know-how.

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1.7.  Key Terminologies

1. Backup Site: It is a part of the DRP and BCP in which the organization can easily relocate its data following a man-made or natural disaster.2. Cloud or Hosting Service Provider: A Cloud Service Provider (CSP) or a Hosting Service Provider offering DRaaS3. Cold Site: It is the least expensive type of back-up facility available which does not include any data back-up from the original location of the organization. In such a situation, the probability of recovering the lost data is minimum and the cost of damage is high.4. DRaaS: Disaster Recovery-as-a-Service (DRaaS) is a cloud based service to protect companies from the loss of critical data either in case of a man made (civil unrest, power cut/blackout, cyber-attacks, etc.) or natural disasters (earthquake, flood, tornadoes, hurricane, etc.).5. DR, Networking or Storage Service Provider: A Disaster Recovery, Networking & Storage Service Provider offering DRaaS6. Enterprise: Company with a headcount upto 100 employees and providing DRaaS7. Hot Site: It is the most effective commercial DR service which allows a business to continue in an event of disaster. Basically, a replication of the real-time data or production environment is done on a dedicated or cloud server. In time of a disaster, the hot backup site can be brought up to full production in just few hours.8. IaaS: Infrastructure-as-a-Service is one among the three fundamental cloud computing models in which an organization outsources the equipment used to support operations like storage, hardware, servers and networking components.9. IT or Managed Service Provider: A company with a large portfolio of services like Application Development, Maintenance and Support and offering DRaaS. Managed Service Provider (MSP) offering DRaaS is counted in this category.10. Mid-market: Company with headcount between 101 to 1000 employees and providing DRaaS11. PaaS: Platform-as-a-Service is a sub segment of cloud computing that allows renting hardware, operating system, storage and networking capacity over the internet.12. Resiliency: It is the ability of an IT system to recover quickly and continue operating even when there is a failure, outage or disruption.13. RPO: Recovery Point Objective is defined as the maximum tolerable period in which data might be lost.14. SaaS: Software-as-a-Service is a cloud based software delivery method that gives access to software and its subsequent functionalities remotely through a web based service commonly an internet connection.15. Small Business: Company with headcount of 1000+ employees and providing DRaaS16. Telecom or UC Service Provider: A Telecommunications and Unified Communications company offering DRaaS.17. Warm Site: A warm site is a trade-off between a cold site and hot site. This site is already stocked with hardware representing a reasonable facsimile of that found in the customers' data-center. They will have back-up on hand, but they may remain incomplete and may be several days old.

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1.8.  List of Abbreviations

1. APAC: Asia Pacific2. AWS: Amazon Web Services3. BC: Business Continuity4. BCP: Business Continuity Planning5. BFSI: Banking, Financial Services and Insurance6. CAPEX: Capital Expenditure7. CSP: Cloud Service Provider8. DR: Disaster Recovery9. DRaaS: Disaster Recovery-as-a-Service10. DRP: Disaster Recovery Planning11. EC2: Amazon's Elastic Compute Cloud12. IaaS: Infrastructure-as-a-Service13. MEA: Middle East and Africa14. MINT: Mexico, Indonesia, Nigeria, Turkey15. MSP: Managed Service Provider16. M&A: Merger & Acquisition17. OPEX: Operating Expenditure18. RaaS: Recovery as-a-Service19. RoI: Return on Investment20. PaaS: Platform-as-a-Service21. RPO: Recovery Point Objective22. RTO: Recovery Time Objective23. SaaS: Software-as-a-Service24. SMAC: Social, Mobile, Analytics and Cloud25. SMB: Small and Medium Business26. SOHO: Small Office Home Office27. Sungard AS: Sungard Availability Services28. TCO: Total Cost of Ownership29. UC: Unified Communications30. USD: United States Dollar

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Executive Summary 02 11

2.  Executive Summary

2.1.  Executive Overview

The Run of Technology Through The YearsIt is a known fact that the world has always embraced emerging and disruptive technologies in its business environment. Earlier, Information Technology moved on mainframe technologies, then came the era of personal computers followed by client-server architecture and now it's an era of cloud computing. Tech gurus often argue that the next few years would be a wave of cloud technologies.Of late, IT managers have realised that huge investments in infrastructure have hardly been fruitful. They don't get the desired RoI and doesn't meet expectations. It is in this scenario that cloud computing is a huge boon. With decreasing budgets, companies have been looking to shell out on infrastructure or applications in cloud. The most benefited are the Small & Medium Businesses who run on tight budgets.

Data Is CriticalWhether it is a mother uploading photographs of her new born, a student saving his study materials on his personal computer, a shop-owner keeping track of his inventory or a company executive maintaining his organization's financials, no single individual desires to lose data intentionally. Initially, data was stored in magnetic tapes, then came disk-to-disk storage, next evolved the concept of virtualization and now it's DR on cloud.

DRaaS: The New Service On The BlockDisaster Recovery-as-a-Service or DRaaS is one such by-product of cloud computing which takes care of one's data in crisis or emergency situations. Instead of having a dedicated on-premise DR in place, one can upload on cloud as the capital expenditure incurred is zero and operational expense incurred is minimum. Within the ambit of cloud computing, companies in the DR area are developing software products and providing services that promise faster and comprehensive results in terms of ability to return back to business at the point where data flow was interrupted, due to an event of natural or man-made disaster. The industry has observed a pattern of Merger and Acquisition with bigger companies taking over Independent Software Vendors (ISV) or product companies creating volatility in the DRaaS market. This is expected to continue or grow further, as companies are focusing on the mid-market, Small Business and SOHO user segment.

Market SizeThe current market size of DRaaS is USD 1032 million (as of 2014) and is expected to grow at CAGR 51.4% till 2019. Currently, North America contributes to around 58.2% of the overall market and this is expected to further increase at least till 2019. In the following years, Europe and parts of APAC are assumed to play a greater role in DRaaS. The major players in this segment are the Cloud or Hosting Service Providers and the DR, Networking or Storage Service Providers. Enterprise and Mid-Market companies are the largest users for this "as-a-service" technology and both collectively account for more than 75% of the overall market share. Financial houses happen to extract the most out of this while Manufacturing and Government are still two steps behind in terms of implementing cloud based DR.

DRaaS: Be AwareThough DR on cloud looks brilliant in terms of future prospects, lack of knowledge is one such area which

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poses a hurdle for companies to convince its customers to implement it. IT managers need to be educated properly and the Business Continuity (BC)/Disaster Recovery (DR) organizations are expected to play a major role in order to fulfill that need. Regulation & compliance with BC and DR standards as drafted by Business Continuity Institute, American Society for Industrial Security/ British Standard Institution and Disaster Recovery Institute International are at times flexible and not followed by some companies making customers re-think on having DR in place. This issue needs to be addressed sensitively so that it does not become a hindrance to the growth of this industry.

With good growth rates, DRaaS expects to perform better in years to follow. The industry appears optimistic and customers are ready to move DR on cloud once they are convinced. High investments by technology giants like IBM and Cisco are early sign of companies expecting returns from cloud technologies. Currently, Disaster Recovery-as-a-Service continues to be an infant in the "pay-as-you-use" model, but will soon prove to be a major game-changer.

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Research and Forecasting 03 14

3.1.  Research Methodology

Base Year: 2014Forecasting Period: 2015 - 2019

3.1.1.  Sampling

The leading suppliers of each end-user product categories that were chosen to provide a larger representative sample.

Purposive unit sampling was adopted for every service segment such as verticals, regions, end-users and others. This was resorted to, in order to elicit the appropriate inputs with regard to the qualitative growth aspects of the market.

3.1.2.  Secondary Research

The research methodology that was carried out was desk research through various journals, association reports, and in house database to build a knowledge base on various market service segments, product categories and industry trends.

Various fact based data was analyzed. Some of the sources included:

a. ResearchFox Knowledge Base:

Previous data on the market has been put through a rigorous and comprehensive analysis to analyze the current state.

b. Desk Research:

Industry reports, annual reports, press releases, webinars, journals and publication, independent rating agencies and government statistics.

3.1.3.  Primary Research

Primary interviews were conducted among various stakeholders:

Product and service companiesMembers of associations and alliancesSubject Matter Experts and EvangelistsConsultants and Strategists

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3.1.4.  Industry Information

It was essential to understand the current industry landscape, market dynamics, security ecosystem and competitor metrics. To estimate the global market, Chief Experience Officers (CXOs), Marketing Heads, Sales Managers and product stakeholders were interviewed.

3.1.5.  Technical Information

In addition to the interviews with leading participants for industry-related information, ResearchFox conducted interviews with Research and Development (R&D) and Design and Development teams to understand the current usage of the products by service type and also to find out the emerging trends. Finally, interviews with suppliers were conducted to cross check the validity of information and also to understand the emerging trends in the end-user segment. The detailed methodology for primary research is outlined below.

3.1.6.  Primary Interview Questionnaire Design

ResearchFox developed a detailed questionnaire, which was used by the analysts as a guide for their discussions. This process ensured the collection of all necessary data. The questionnaire was designed to elicit unbiased industry level data (market size, production, sales, and others), that had check points (questions such as company level information and their position in the industry acted as check points) to ensure accuracy of the data. The questionnaire included the following sections:

1. Industry level information2. Characteristics and Dynamics3. Company-specific information4. Market segmentation data

3.1.7.  Interview Questionnaire Test and Validation

Following the design of the questionnaire, ResearchFox carried out some initial interviews to verify that the appropriate market and technology data was generated. After the final design of the questionnaire, ResearchFox began full scale primary research. Specific companies targeted for primary research interviews were selected based upon market participation. Higher was the entity's profile, more attractive was the entity.

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3.1.8.  Interview Process

As participants respond in the course of an interview, ResearchFox analysts are trained to move from lower priority and/ or sensitive topics to increasingly key and/or sensitive topics in response to the interviewee's behavior. This responsive and reflective interview process, combined with the analysts' ability to discuss the industry and technical issues in an open and sharing environment, allows ResearchFox to probe for key data, operations, and competitive information. Multiple contacts within a single organization and with an individual are often planned and/or staged in order to optimize and complete the information gathering process.

3.1.9.  Research Validation

At a point, when 20 percent of the research interviews and/or data collection had been completed, ResearchFox consultants evaluated the preliminary findings to assure that up-to-date results are in line with project objectives. The analyst team analyzed the information from the interviews and information was validated through a combination of the following validation techniques:

Cross checking with other primary data and previously developed in-house researchReview of secondary information, such as trade journals, annual reports and industry directories

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3.2.  Forecasting Methodology

3.2.1.  Step-by-Step Methodology for Market Estimation and Forecasting

Market Estimation and Forecast Methodology, 2015

Step Method

1Understand the market mechanism for the market through structured, systematic and theoretically established norms of analyzing, designing, introducing and quality assurance of the market estimation

2 Measuring the various market drivers, constraints, opportunities and challenges at regular intervals of time

3 Integrate expert-opinion of discussions in consultation with the ResearchFox Analyst team

4 Market estimation and forecast calculation

5 Delphi method and Causal Analysis used as and when required

6Rigorous quality check with heads of Research Team, Subject Matter Experts and Consultants before final publication

Source: ResearchFox

Significance and Importance of the Market Forecast, 2015

Sr. No. Significance and Importance

1 Helps revisit on the company's R&D investments

2 Keeps the Sales and Marketing team posted on the market prospects

3 Strategize investment and expansion plans

4 Improve business planning

5 Helps create business aims and set sales figures within the company

6 Aware of the current market competition

7 Support plans for Merger and Acquisition (M&A)

Source: ResearchFox

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