Transcript
Page 1: IDC Worldwide IT Cloud Services Taxonomy, 2012

Filing Information: March 2012, IDC #233396, Volume: 1

Cloud Services: Global Overview: Industry Developments and Models

I N D U S T R Y D E V E L O P M E N T S A N D M O D E L S

I D C ' s W o r l d w i d e I T C l o u d S e r v i c e s T a x o n o m y , 2 0 1 2

Frank Gens Robert P. MahowaldRichard L. Villars Stephen D. DrakeTim Grieser Mary Johnston TurnerLaura DuBois Matthew EastwoodGard Little Melanie PoseyRona Shuchat Satoshi MatsumotoChris Morris Vladimír KroaMargaret Adam David BradshawChris Ingle Ricardo VillateNigel Wallis Stephen MintonMette Ahorlu

I D C O P I N I O N

The IT cloud services market continues to grow and evolve at an astonishing rate.

New offerings come to market regularly, often defining new functional segments and

new deployment options. This study updates IDC's cloud services definition and

deployment models. It also updates IDC's taxonomy of the IT cloud services market.

According to IDC's definition, a cloud service must be a shared, multitenant service;

packaged as an integrated solution; available through self-service; provide elastic

resource provisioning; feature pricing that scales up and down with usage; leverage

standard networks and clients; and be "open" for integration and enhancement

through published application programming interfaces (APIs). IDC defines a variety of

emerging cloud service deployment models, including public cloud services, and an

expanding range of private cloud service deployment options, including dedicated

private cloud (DPC) and virtual private cloud (VPC) services. In this study, we share

IDC's high-level functional taxonomy of IT cloud services, which we have enhanced

and extended in the following ways:

U.S. National Institute of Standards and Technology's (NIST's) three broad cloud

service categories — software as a service (SaaS), platform as a service (PaaS),

and infrastructure as a service (IaaS) — have been added as a new top layer to

IDC's IT cloud services taxonomy.

IDC's previous IT cloud services taxonomy has been "plugged in" below the NIST

model, providing clients with much deeper levels of cloud services market

definitions heretofore lacking in the simple NIST framework.

Network and client functionalities, delivered as cloud services, have been added

to the taxonomy.

IDC's application development and deployment (AD&D) cloud services segment

has been renamed (as PaaS) and revamped to reflect how cloud services are

changing that important part of the market. A new PaaS category — cloud

application platforms, focusing on the strategic integrated PaaS segment that

includes Microsoft's Azure, salesforce.com's Force.com, and other platforms —

has been defined.

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T A B L E O F C O N T E N T S

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In This Study 1

Methodology ............................................................................................................................................. 1

Situat ion Overview 1

What's New in IDC's IT Cloud Services Taxonomy? ................................................................................ 2

What Are "Cloud Services?" ..................................................................................................................... 2

Eight Cloud Services Key Attributes .................................................................................................. 3

Comparison with NIST's Cloud Computing Definition........................................................................ 7

Cloud Services Deployment Models ......................................................................................................... 8

More Detail on Public and Private Cloud Service Deployment Models.............................................. 8

Private Cloud Services Key Attributes (Points of Note) ..................................................................... 10

IT Cloud Services Taxonomy: Key IT Cloud Services Categories ............................................................ 12

Our Starting Point for Cloud Services Segmentation — IDC's Functional IT Market Taxonomy ....... 12

Important Changes for IDC's 2012 IT Cloud Services Taxonomy ..................................................... 13

Definitions of the IT Cloud Services Segments.................................................................................. 16

Future Out look 17

Essent ia l Guidance 17

Learn More 19

Related Research..................................................................................................................................... 19

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L I S T O F T A B L E S

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1 IDC's New IT Cloud Services Taxonomy, 2012 ........................................................................... 14

2 IDC's Old IT Cloud Services Taxonomy, 2008–2011 ................................................................... 14

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L I S T O F F I G U R E S

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1 Cloud Services Key Attributes...................................................................................................... 3

2 Cloud Services Deployment Models ............................................................................................ 10

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I N T H I S S T U D Y

The IT cloud services market continues to grow and evolve at an astonishing rate.

New offerings come to market regularly, often defining new functional segments and

new deployment options. This study updates IDC's definition of cloud services and

the various cloud services deployment models. It also updates and expands IDC's

taxonomy of the IT cloud services market.

M e t h o d o l o g y

IDC developed its first cloud services definition in 2008 (blogs.idc.com/ie/?p=190),

and — while we have continued to refine and evolve our definitions

(blogs.idc.com/ie/?p=422) — you'll notice that our core definitional and taxonomic

principles have remained the same.

For this update to our cloud services definitions and taxonomy, we held extensive

discussions among IDC's global offices, sharing the latest observations and analysis

regarding cloud service providers' (cloud SPs') latest offerings and business/service

models, relevant technology/product trends, the activities of standards groups, and IT

customers' buying and usage trends. Because market definitions and taxonomies

should be crafted to be as durable as possible, while still being adaptable to important

market changes, IDC's analyst team invested many person-hours exploring what the

IT and cloud markets will look like over the next 5–10 years rather than creating a

simple map of the current market.

S I T U A T I O N O V E R V I E W

The cloud services market continues to expand and evolve. Vendors with a great

variety of legacy products and services, management strategies, and experience are

entering the cloud services market, disrupting, diversifying and, sometimes,

complicating formerly well-understood market dynamics. In addition, users'

understanding and expectations about cloud services vary widely and are influenced

both by their growing cloud experiences on the consumer Web and by workplace IT

consumption habits built over the past 40 years.

To improve our market analysis and forecasting and help the market move toward a

common framework, IDC continues to evolve our IT market taxonomies on a regular

basis. There are substantial changes in the cloud services taxonomy from the

previous edition published in Worldwide and Regional Public IT Cloud Services 2011–

2015 Forecast (IDC #228485, June 2011).

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W h a t ' s N e w i n I D C ' s

I T C l o u d S e r v i c e s T a x o n o m y ?

IDC's most recent IT cloud services definitions and taxonomy information were

published in Worldwide and Regional Public IT Cloud Services 2011–2015 Forecast

(IDC #228485, June 2011). In this more comprehensive taxonomy document, there

are a number of enhancements to the definitions and taxonomy. Among these are:

Adoption of the three NIST IT cloud services categories — SaaS, PaaS, and

IaaS — as the top level of our taxonomy. The addition of a new top level in

IDC's IT cloud services taxonomy is based on the widely used U.S. National

Institute of Standards and Technology cloud services categories: infrastructure

as a service, platform as a service, and software as a service. We've created

formal alignment of IDC's primary IT cloud services markets (e.g., applications,

application development and deployment, system infrastructure software [SIS],

servers, and basic storage) with these three top-level NIST categories.

Expanded primary market categories. This new taxonomy expands the

number of primary IT cloud services beyond the original five, adding networks

(network functionality delivered as cloud services) and clients.

"Other" SaaS, PaaS, and IaaS categories. To accommodate new and

compound solutions, we have added three "other" categories at the IaaS, PaaS,

and SaaS levels. The new categories accommodate new and/or complex cloud

services offerings beyond those that are cloud versions of simple primary market

product offerings.

Expanded cloud deployment models. In our previous taxonomy, we defined

just three (public, private, and hybrid) cloud deployment models. In this study, we

expand our definitions to include several different private cloud deployment

models.

More detailed explanations of these changes are presented in the IT Cloud Services

Taxonomy: Key Cloud Services Categories section of this document.

W h a t A r e " C l o u d S e r v i c e s ? "

Cloud services are fundamentally about an alternative solution composition, delivery,

and consumption model — one that can be applied to IT industry offerings but also,

much more broadly, to offerings from many other industries, including entertainment,

energy, financial services, health, manufacturing, retail, and transportation as well as

the government and education sectors.

The cloud model goes well beyond prior online delivery approaches — combining

efficient use of multitenant (shared) resources, radically simplified "solution"

packaging, self-service provisioning, highly elastic and granular scaling, flexible

pricing, and broad leverage of Internet-standard technologies — to make offerings

dramatically easier and generally cheaper to consume.

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At a high — and overly simplistic — level, cloud services can be described simply and

informally as:

Consumer and business products, services, and solutions delivered

and consumed in real time over a network (most often, the Internet)

But this simple description is not sufficient to describe and capture the unique value

that the cloud model brings, and how it differs from traditional on-demand services

and online services.

Eight Cloud Services Key Attributes

IDC defines cloud services more formally through a checklist of key attributes that an

offering must manifest to end users of the service (see Figure 1). Cloud services, as

defined by IDC, require support of all of these eight attributes.

F I G U R E 1

C l o u d S e r v i c e s K e y A t t r i b u t e s

Source: IDC, 2012

These attributes apply to all cloud services — in all public and private cloud service

deployment models — although the specifics of how each attribute applies may vary

slightly among these deployment models.

The sections that follow provide a more detailed explanation of what we mean for

each of these attributes. The final three cloud service attributes — ubiquitous

(authorized) network access, standard UI technologies, and published service

interface/API — are related to the same thing: leveraging the power of de jure and de

facto Internet standards to reduce costs, increase reach, and maximize

interoperability and combinatorial value creation.

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Shared, Standard Serv ice

This is the most fundamental attribute of a cloud service, an attribute that is shared

with a wide variety of previous-generation online services, and the one that

differentiates cloud services from many traditional customer-unique outsourced or

hosted offerings.

Cloud services are shared, standard services built for a market, not for a specific

customer. These services present themselves to users as "multitenant" offerings,

although our definition — focused on the customer-facing aspects of cloud services

— leaves room for service providers to use a variety of underlying deployment and

architectural options.

"Standard" does not mean that services do not offer customers the ability to create a

"personalized" version of the service, however. Cloud services typically offer a wide

range of built-in configuration options that allow customers to personalize the service;

the key difference with traditional systems is that cloud services personalization is

based on choosing among commonly available, "engineered in" options rather than

making customer-specific "hacks" to the code.

The shared service model offers customers and suppliers both enormous operating

efficiencies and upgrade/enhancement velocity. In a private cloud deployment, the IT

department can be viewed as the cloud service "vendor" offering a standard service

within a single enterprise or across an extended enterprise.

Solut ion Packaged

One of the most obvious user benefits of the cloud service model is that it is

presented as an all-in, "turnkey" solution: the customer can access the offering

without the need to own, manage, or understand any underlying resources required to

support the offering. The cloud service provider bears that burden, offloading it from

the customer, making it much simpler and faster to adopt for customers.

One important implication of cloud services being technologically "easy" is that many

line-of-business (LOB) organizations without IT skills have been able to purchase and

leverage cloud services directly.

Sel f -Serv ice

Cloud services allow customers' self-service capabilities for service provisioning and

administration. In the IT cloud services world, the range of self-service capability

varies widely up and down the stack: in the infrastructure-as-a-service area (e.g.,

cloud storage, cloud servers), "click to buy" provisioning is widely available today,

whereas much of the SaaS and PaaS community lags here.

While most SaaS and PaaS vendors provide a lot of self-service administration, there

is little click-to-buy provisioning simplicity and speed; some onboarding and more

complex customization functions typically require human intervention from the

provider's staff.

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IDC believes we'll see SaaS and PaaS vendors evolve in this area, providing more

automation around self-service provisioning. Customer self-service is a key tool for

providing greater operating efficiency, deployment speed, and customer satisfaction.

Elast ic Resource Scal ing

Rapid and flexible expansion (and contraction) of service usage is among the major

benefits of cloud services for users. Because the cloud services model allows users

to quickly access and utilize the services they require, when they require them, they

can greatly speed up systems' implementation/deployment.

Cloud services' dynamic provisioning (and de-provisioning) capability — including the

ability to access resources in finer-grained increments — also dramatically reduces

the need for costly overprovisioning. In addition, this characteristic substantially

reduces user burden to come up with demand plans for resources (CPU, storage,

network bandwidth, and support staff), which is a major challenge for organizations

and typically drives companies to greatly overprovision IT.

Like self-service, the way elastic scaling is manifested varies by the type of cloud

service offering. As for infrastructure-related services, such as server instances

(virtual machines) and storage, service expansion/reduction is possible on a very

detailed level such as the number of server instances, storage capacity, and data

transfer volume. On the other hand, contracts in the application field are based on the

number of users (accounts), but — optionally — contracts may not necessarily be

defined for individual accounts but for the entire user group.

In addition, there are cases in which a certain time is required to activate changes in

service contracts in the SaaS and PaaS worlds, although such changes can be

reflected dynamically (instantly) in the IaaS world. Still — even for SaaS and PaaS —

the time required to change cloud services flexibly is much shorter than the time

required to change traditional IT systems. This is because upgrading traditional

(noncloud) offerings typically requires additional resources — such as underlying

infrastructure and/or middleware components — to also be upgraded, and for

noncloud systems, these upgrades require significant manual effort. On the other

hand, cloud services are designed and deployed to promptly realize resource

reallocation, and the ability to respond quickly to changes is quite high. When

resources need to be reduced in on-premise services, doing so is often more difficult

to execute since spending on facilities and equipment is already on the balance sheet

and spending on personnel is not able to be rapidly reduced (or redeployed).

Elast ic , Use-Based Pr ic ing

Customers want services not only scaled to need but also priced to use, whether

that's in proportion to usage, the number of users, transactions, screen views, or

some other consumption metric. As a convenience to some customers, providers may

mask this pricing granularity with long-term, fixed-price agreements, but — to meet

the cloud service definition — suppliers must design their offering so they have the

capability to do fine-grained metering and pricing for customers that need these

services. In a private cloud setting, some IT shops may take advantage of the fine-

grained metering to support more detailed, usage-based chargebacks.

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Ubiquitous (Author ized) Network Access

This attribute means that cloud services are designed to leverage the most ubiquitous

public network on the planet. For public clouds, this is a no-brainer: it means services

must be accessible to (authorized) users that have access to the Internet. The core

benefit to both the service provider and the customers is broad, simple, and low-cost

access.

Obviously, this doesn't mean that a public cloud service is unsecured and unreliable;

rather, it means that the service provider (and customers) leverages security and

quality-of-service (QoS)/availability mechanisms that are Internet based (SSL, IP

VPN, CDNs, etc.) and take advantage of the huge marketplace of security and QoS

offerings that are building up around the public Internet.

For most private clouds, this attribute will still be a key one, especially where

employees are mobile, but we do see a model emerging for very secure private

clouds where access is restricted only through private IP networks. We are already

also seeing use cases where public cloud SPs offer customers with high-bandwidth

and/or security needs the ability to access the public cloud via private lines — one

example of what will be many "mashups" of public and private cloud services.

Standard UI Technologies

To clarify, we're talking here about the client and underlying technologies, not the

visual layout of elements on the screen (or a device). Cloud services should not

require any special heavyweight client environment (unlike the client/server world).

Like the network access attribute mentioned previously, this attribute is about

leveraging Internet-related de jure and de facto standards and technologies that are

widely deployed — and typically service/application independent — to give cloud SPs

and their customers maximum reach and access to leading-edge innovation at a very

low cost.

In the case of client technologies, we are talking about Web browsers, as well as

supporting technologies such as Ajax (asynchronous JavaScript, Dynamic HTML, and

XML), Flash, HTML, JavaScript, and SVG. Other service/application-independent

clients — such as AIR and Silverlight — that sit outside the browser but leverage the

same de jure and de facto standard technologies could also fit the bill as they become

widely deployed on users' devices. We are including de facto standards, so this

attribute obviously has some degree of subjectivity to it. The core thought behind this

attribute is this: SPs should leave the client choice for users as "open" as possible, for

their own, and customers', benefit.

IDC believes that service users, not SPs, should have the right to choose client

environments. Such an option will promote development and diversification of client

environments and eventually generate substantial benefits to cloud SPs and users.

Publ ished Serv ice Interface/API

The ability to combine services with each other, and to integrate them with traditional,

on-premise systems, is the foundation for being able to rapidly create — and,

importantly, allow others to create — new solutions and value, and therefore a core

element of modern cloud services.

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Published cloud service APIs transform online services from "islands" to high-

leverage building blocks within large innovation communities and marketplaces. It's

already obvious that cloud SPs that do not offer open/published, programmatic

interfaces — and thus fail to develop large ecosystems of solution developers around

their services — will simply not be competitive.

These APIs, and the ecosystems around them, will be the foundation for expanding

suppliers' market power. In our view, this is the brightest red line that separates first-

generation online Internet offerings and cloud services. It's no surprise that the first-

generation Internet businesses that have become cloud leaders — Amazon, Google,

and eBay — were among the first of the first-generation online/ecommerce providers

to open up their services with APIs and recruit huge developer communities.

In the IT industry, many SaaS/PaaS providers — and a fast-growing number of IaaS

providers — have published service APIs (SOAP, REST, etc.) that allow customers

and other vendors to access functionality within their offering; some expose a minimal

number of controls, while others publish many. But it's hard to imagine any successful

cloud services vendor not providing a way for its offerings to be leveraged for greater

value by customers, and by its own ecosystems. These APIs and the ecosystems

around them will be the foundation for expanding suppliers' market power. The

successful cloud SPs will have APIs in some form as the market matures, while

"walled gardens" will have a hard time being competitive in the cloud services space

— think "AOL versus the Internet."

Comparison with NIST's Cloud Computing Definition

Currently, market players often reference the U.S. National Institute of Standards and

Technology cloud computing taxonomy. NIST's definition of cloud computing is based

on service delivery/consumption model. There are many similarities between NIST's

"essential characteristics" of cloud computing and IDC's eight attributes.

The five essential characteristics of cloud computing as defined by NIST are:

On-demand self-service

Broad network access

Resource pooling

Rapid elasticity

Measured service

The only major point of difference between NIST's and IDC's characteristics/attributes

is that IDC deems "published service/API" to be an essential characteristic of cloud

services.

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C l o u d S e r v i c e s D e p l o y m e n t M o d e l s

At the highest level, the two types of deployment models for cloud services are public

and private:

Public cloud services are shared among unrelated enterprises and consumers;

open to a largely unrestricted universe of potential users; and designed for a

market, not a single enterprise.

Private cloud services are shared within a single enterprise or an extended

enterprise — with restrictions on access and level of resource dedication and

defined/controlled by the enterprise (and beyond the control available in public

cloud offerings); can be onsite or offsite; and can be managed by a third-party or

in-house staff. In private cloud that is managed by in-house staff, "vendors (cloud

SPs)" are equivalent to the IT departments/shared service departments within

enterprises/groups. In this utilization model, where standardized services are

jointly used within the enterprise/group, business departments, offices, and

employees are the "service users."

Two other often-discussed cloud service deployment model terms are hybrid cloud

and community cloud:

Hybrid cloud: The term "hybrid cloud services" is used to describe the

consolidated coordination/management of multiple cloud services. Hybrid cloud

services include "public/public," "public/private," and "private/private"

combinations. IDC does not classify collaborations between cloud services and

non-as-a-service IT as hybrid cloud services.

Community cloud: A "community cloud" is a multi-enterprise cloud service that's

been commissioned by, and is controlled by, a group of named enterprises (not a

market, or class, of enterprises). A community cloud is a type of private cloud in

that it's being built not for "a market" but for a specific, named group of

enterprises that have shared needs, control/specify the functionality of the

services, and share the cost burden. Alternatively, if a cloud service has been

developed by a third-party service provider for a specialized community of

interest (e.g., local governments) but is not owned in part by the

customers/community, and the customers don't have direct control over

specifying what the service looks like (at least not more control than big

customers have over, say, IBM or HP offering plans), and the SP is free to

market to other prospects with similar needs, then the cloud service would be a

type of public cloud or VPC (e.g., one designed for enterprises in a specific

industry). In short, the categorization of a multi-enterprise cloud service depends

on who owns and controls what the service looks like and who can join it. If it's a

named group of enterprises/customers, it's a community/private cloud. If it's the

SP, it's a vertical/specialized public or VPC offering.

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More Detail on Public and Private Cloud Service Deployment Models

Since the publication of Worldwide and Regional Public IT Cloud Services 2011–2015

Forecast (IDC #228485, June 2011), we have developed more granular definitions of

cloud service deployment models, identifying several deployments within the private

cloud category. These models — along with the public cloud deployment model —

are shown in Figure 2.

The two models on the left side of Figure 2 refer to two deployment models that

describe customer-owned private clouds in which the enterprise's IT department can

be viewed as an internal cloud service provider:

Self-run private cloud. A self-run private cloud is a cloud service that an

enterprise owns and operates itself. The enterprise may have acquired the

hardware and software components required to build a private cloud and

assembled it (or had a systems integrator do so). Alternatively, the enterprise

may have acquired a pre-integrated private cloud system/appliance. The

commercial opportunities around a self-built cloud are to sell the required

hardware, software, and/or professional services. These "self-run private cloud"

opportunities are not counted in our IT cloud services forecasts but are counted

as use-case/workload segmentations of our hardware, software, and professional

services forecasts (i.e., hardware, software, and professional services sold to

support the development/operation of a customer's own private cloud).

Managed private cloud. A managed private cloud is an enterprise-owned cloud

service that is operated by a third-party services firm. This is a less common model

and parallels traditional onsite managed services arrangements in which the

customer uses third-party staff to operate its traditional on-premise IT environment.

Focusing on the three third-party hosted offerings on the right side of Figure 2 — that

is, the models provided on a service provider's site, and the models IDC counts in our

IT cloud services forecasts — we've defined:

Public cloud services. Public cloud services are shared among unrelated

customers and open to a largely unrestricted universe of potential users. Public

cloud services are designed for a market — not a single enterprise.

The other two hosted cloud service models in Figure 2 describe distinct hosted

private cloud service deployment models emerging in the market today:

Dedicated private cloud service. DPC service is provided on dedicated/isolated

physical resources to a single enterprise or an extended enterprise. DPC

examples include Amazon EC2 Dedicated Instances, SAVVIS Symphony

Dedicated, and RackSpace Cloud: Private Edition.

Virtual private cloud service. VPC service is a premium version of a public

cloud service, with tiered options for greater privacy/security and customer

control (e.g., VPN or private network access, firewall and IPS/IDS between guest

VMs and the Internet, and root access to guest VMs). Physical resources are not

dedicated to a single customer — allowing the SP and the customer to benefit

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from public cloud economics. VPC examples include Amazon EC2 Virtual Private

Cloud (excluding Dedicated Instances), SAVVIS Symphony VPDC, and IBM

SmartCloud Enterprise+. From a forecasting standpoint, VPCs are considered a

subset of IDC's public IT cloud services forecast; look for future IDC forecasts to

identify what portion of public cloud demand is for VPCs.

Over the next several years, we expect a steady market swing toward VPCs, as well

as a new generation of DPCs that use sophisticated resource management to deliver

dedicated resources from a highly efficient multitenant platform. This will be driven by

SPs becoming even more sophisticated in offering greater privacy, management, and

service-level options on top of their highly efficient shared cloud services offerings

and customers becoming more comfortable with multitenant environments.

One example of the new generation of DPCs is Amazon's Dedicated Instances, which

— through sophisticated scheduling software — allows customers to have a

guarantee of dedicated physical resources yet is delivered on Amazon's shared EC2

infrastructure. Once a customer terminates a dedicated instance, the resources are

released into the common EC2 pool; when the customer returns, its dedicated

instance will likely be set up on an entirely different set of EC2 resources. This

example shows why the lower bars in Figure 2 are overlapped — for the use case of

dedicated resources delivered on what is a multitenant delivery platform.

F I G U R E 2

C l o u d S e r v i c e s D e p l o y m e n t M o d e l s

Source: IDC, 2012

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Private Cloud Services Key Attributes (Points of Note)

We mentioned previously that the eight cloud service attributes apply to both public

and private cloud services — in other words, a cloud is a cloud. But there are some

nuanced differences in how some of the attributes are applied or interpreted in private

cloud environments.

The first important distinction is that with a private cloud service that is served up by

an internal IT group, it's important to note that the IT group is the "service provider"

and the enterprise users are the "customers." In assessing whether a private cloud

service is actually a cloud, the important perspective is "what does the end user

see/experience?" not what the IT staff delivering the cloud service sees under the

covers. If end users are seeing a shared service they access through a portal and

that allows them some control over configuration options, provides visibility of usage,

and is quickly able to scale up and down in both capacity and costs (if there is a

chargeback scheme) — then it can be considered a cloud. The IT department — as

the SP in this use case — may be provisioning the cloud with fixed resources (even

though they're presented as virtually "unlimited" to the end user) and may themselves

have a fixed cost for resources that support the cloud service delivery, but if the end

user's experience is of a "cloud" (all eight attributes), then IDC would consider the

private offering a cloud service.

The following summarize some nuances in the interpretation of key attributes of

private and public cloud services:

Shared, standard service: In a private cloud, the multiple "tenants" sharing the

cloud service are typically not across multiple enterprises but different

constituencies within a single enterprise.

Solution packaged: Same as public cloud services — the services are

presented and consumed as integrated offerings, without the need for users to

assemble, or be concerned with, underlying resources/components.

Self-service: Same as public cloud services, services allow customers self-

service capabilities for service provisioning and administration.

Elastic resource scaling: Similar to public cloud services, and as noted

previously, even though the IT department delivering the cloud service (the

internal "SP") may have fixed resources and costs under the covers of its cloud

service delivery, if the end users of the private cloud service are presented the

service as a scalable offering, it meets the elastic scaling criterion.

Elastic, use-based pricing: Similar to public cloud services, the SP is able to

present usage detail to users. But for private cloud services delivered by internal

IT organizations, use-based "pricing" is not a requirement because many

organizations don't use chargeback as a funding process.

Ubiquitous (authorized) network access: As in the case of the "standard UI

technologies" requirement, the principle here is that cloud services do not require

their own dedicated networks (just as they don't require dedicated client software

or hardware). For practical purposes, the vast majority of private clouds are built

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to be accessible over the public Internet for the simple reason that for many

employees, that is the primary network they have access to and use —

(authorized) accessibility over the Internet makes the private cloud more valuable

for most enterprises.

Standard UI technologies: Same as public cloud services — the main issue is

that the service does not require a "heavyweight" dedicated client.

Published service interface/API: In the case of private clouds, service

interfaces and API do not need to be widely published inside and outside the

company. However, the service interface/API can be easily leveraged by users

(IT administrators) within IT departments. And we expect, over time, to see more

private clouds that are "behind the firewall" implementations of public cloud

services, and share those services' APIs — making it easier for them to be

integrated in hybrid cloud environments.

I T C l o u d S e r v i c e s T a x o n o m y :

K e y I T C l o u d S e r v i c e s C a t e g o r i e s

Thus far, we've focused on describing what a cloud service is and what the most

common deployment options are. In this section, we describe IDC's taxonomy of IT

cloud services offerings — that is, just what categories of IT cloud services are

available (and what does IDC size and forecast), and how do these categories relate

to one another?

Our Starting Point for Cloud Services Segmentation — IDC's Functional

IT Market Taxonomy

As noted previously, IDC's most recent IT cloud services taxonomy information was

published in Worldwide and Regional Public IT Cloud Services 2011–2015 Forecast

(IDC #228485, June 2011). In that document, we noted that over the past several

years, we've used IDC's IT products' (hardware and software) functional taxonomy to

segment the IT cloud services market. We've chosen this approach as a starting point

for naming and functionally categorizing IT cloud services — rather than using the

widely cited, but not very granular, three-layer model described by the U.S. National

Institute of Standards and Technology — for the following reasons:

The IDC IT product taxonomy robustly describes the vast majority of IT

functionality customers invest in, with hundreds of markets and submarkets

named, defined, and related to one another.

This taxonomy is by far the most widely adopted model — by IT vendors,

customers, and investors — for describing and analyzing the IT marketplace.

Using this existing functional taxonomy to describe IT cloud services helps

vendors and customers make the important connection between offering

categories they know well and invest in and the emergence of cloud service

versions of those offerings.

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©2012 IDC #233396 13

This greatly facilitates the sizing and forecasting of the many cloud services

submarkets below the primary market level. Indeed, IDC analyst teams have already

started the process of sizing the secondary cloud services markets below the five

primary services discussed in this study. Examples of these more granular secondary

market forecasts include:

Worldwide Public Platform as a Service 2011–2015 Forecast (IDC #232215,

forthcoming)

Worldwide Public Cloud Application Platforms 2011–2015 Forecast (IDC

#232171, January 2012)

Worldwide SaaS CRM Applications 2011–2015 Forecast and 2010 Vendor

Shares (IDC #232230, December 2011)

Worldwide IT Project and Portfolio Management SaaS 2011–2015 Forecast and

2010 Vendor Shares: SaaS Drives IT PPM Adoption (IDC #232271, December

2011)

Worldwide Cloud Security 2011–2015 Forecast: A Comprehensive Look at the

Cloud/Security Ecosystem (IDC #230389, December 2011)

Worldwide Storage in the Cloud 2011–2015 Forecast: The Expanding Role of

Public Cloud Storage Services (IDC #232115, December 2011)

Worldwide Software as a Service 2011–2015 Forecast and 2010 Vendor Shares

(IDC #229440, August 2011)

Worldwide Cloud Testing and ASQ Software as a Service 2011–2015 Forecast

and 2010 Vendor Shares: Testing Emerges from and for the Cloud to Drive

Business Agility (IDC #229671, August 2011)

Worldwide System Management Software as a Service 2011–2015 Forecast and

2010 Vendor Shares (IDC #229286, July 2011)

Important Changes for IDC's 2012 IT Cloud Services Taxonomy

For 2012, we have made some important changes and enhancements, on top of

IDC's traditional IT functional taxonomy foundation, to create a new IT cloud services

taxonomy. Table 1 shows the new taxonomy, which is followed — for the purposes of

comparison — by the old taxonomy (see Table 2).

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14 #233396 ©2012 IDC

T A B L E 1

I D C ' s N e w I T C l o u d S e r v i c e s T a x o n o m y , 2 0 1 2

IDC Top Level Primary Market Secondary Markets

SaaS Applications Collaborative apps, content apps, CRM, ERM, SCM, ops and manufacturing

apps, and engineering apps

System infrastructure

software (SIS)

System and network management, security, and advanced storage

"Other" SaaS For new/emerging SaaS functional offerings not otherwise covered within the

traditional applications and SIS functional categories

PaaS AD&D Cloud testing, database as a service, integration as a service, cloud application

platform, data analysis and access, content management, app server

middleware, and other AD&D

"Other" PaaS For new/emerging PaaS offerings not otherwise covered within the traditional

AD&D functional categories

IaaS Basic storage

Server

Network

Client

"Other" IaaS For new/emerging IaaS functional offerings not otherwise covered within the

traditional functional infrastructure categories

Source: IDC, 2012

T A B L E 2

I D C ' s O l d I T C l o u d S e r v i c e s T a x o n o m y , 2 0 0 8 – 2 0 1 1

Informal NIST

Alignment Primary Market Secondary Markets

SaaS Applications Collaborative apps, content apps, CRM, ERM, SCM, ops and manufacturing

apps, and engineering apps

PaaS Application

development and

deployment

Structured data management, app development, quality and life-cycle tools,

app server middleware, integration and process automation middleware, data

access/analysis/delivery, and other AD&D

IaaS System infrastructure

software

System and network management, security, and advanced storage

Basic storage

Server

Source: IDC, 2012

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©2012 IDC #233396 15

The key enhancements we've brought into the 2012 taxonomy are as follows:

Adoption of the three NIST IT cloud services categories — SaaS, PaaS, and

IaaS — as our top level. The addition of a new top level in IDC's IT cloud

services taxonomy is based on the widely used U.S. National Institute of

Standards and Technology cloud services categories: infrastructure as a service,

platform as a service, and software as a service. We've created formal alignment

of IDC's primary IT cloud services markets (e.g., applications, application

development and deployment, system infrastructure software, servers, and basic

storage) with these three top-level NIST categories. The NIST scheme has the

advantage of being simple and widely used. On the other hand, there is sparse

detail about which underlying market segments fit within each of these three

categories, so we've made some adjustments to IDC's former cloud taxonomy to

accommodate the adoption of NIST at the top level:

"SaaS" segment redefined as apps and SIS offerings delivered as

cloud services. We are adopting NIST's narrower definition of SaaS, which

focuses just on applications and excludes AD&D cloud services. Within this

application-focused SaaS definition, we are also including all SIS software

segments delivered as cloud services since most can be considered

applications aimed at IT professionals; the ones that can't — such as

operating systems and hypervisors — are not counted as distinct cloud

services since they are bundled with infrastructure cloud services.

Important: IDC's traditional "SaaS" market renamed as "cloud

software." With the adoption of the NIST definition of SaaS, we've relabeled

IDC's traditional "SaaS" market — which covers all packaged software

functionality (applications, AD&D, and SIS) delivered as cloud services — as

"cloud software."

AD&D cloud services fully aligned with PaaS and revamped. In IDC's

updated taxonomy, we have chosen to align all of the application

development and deployment cloud services with the NIST "platform as a

service" category. Thus IDC's "PaaS" includes the functionality of all AD&D

secondary markets delivered as cloud services, including cloud testing,

database as a service (DBaaS), integration as a service, and other AD&D

cloud services (e.g., BI, content management, and app server middleware).

We have also expanded the PaaS secondary markets to include an

important emerging category — cloud application platforms, which are

"integrated PaaS" offerings such as Microsoft's Azure, salesforce.com's

Force.com, and Google's App Engine. Some in the market think of this

narrower group of integrated PaaS offerings as "PaaS" — it's important to

note our distinction: we consider PaaS to include not just the integrated

platforms but also component technologies (e.g., development tools, DBaaS,

and application servers) sold as standalone cloud services. This is

consistent with the principle that the top-level NIST taxonomy must be

collectively exhaustive and mutually exclusive.

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16 #233396 ©2012 IDC

Expanded primary market categories. This new taxonomy expands the

number of primary IT cloud services beyond the original five, adding networks

(network functionality delivered as cloud services) and clients.

"Other" SaaS, PaaS, and IaaS categories to accommodate new and

compound solutions. We have added three "other" categories at the IaaS,

PaaS, and SaaS levels to accommodate cloud services offerings beyond those

that are cloud versions of simple primary market product offerings. Such offerings

could include complex/compound solutions that integrate the functionality of

multiple point solutions (such as cloud application platforms) and entirely new

offerings that were not previously offered in prior delivery models and are now

possible through the cloud model. Over time, as these "other" offerings become

better defined, and larger, we will pull them out of "other" into their own

categories (as we have with CAP).

Definitions of the IT Cloud Services Segments

Because IDC considers cloud services as a delivery and consumption model that can

be applied to virtually all traditional consumer and business product and service

offerings, our cloud services taxonomic approach has been to start with a foundation

of existing IT functional markets delivered as cloud services.

What this approach means is that the functional definition (with inclusions/exclusions)

of each cloud services segment (refer back to Table 1) is essentially the same as the

functional definition found in IDC's traditional IT products taxonomies but delivered as

cloud services.

For example, the functional description of the applications cloud services segment

(refer back to Table 1) is the same as that for packaged applications described in

IDC's Software Taxonomy, 2011 (IDC #228020, July 2011) but delivered as cloud

services. And the underlying secondary cloud services segments are functionally the

same as those within the traditional applications market (collaborative, content, CRM,

ERM, etc.) delivered as cloud services.

Accordingly, for more detail about the functional descriptions of each of our cloud

services segments, refer to the following IDC documents:

For more detail on the application and system infrastructure software primary

markets and secondary markets, see IDC's Software Taxonomy, 2011 (IDC

#228020, July 2011).

As noted previously, the AD&D cloud services segment was renamed platform as

a service and the secondary taxonomy "tuned" to reflect the emergence and

adoption of cloud services in this segment. For more detail on the PaaS primary

and secondary market segment definitions, inclusions, and exclusions, see

Worldwide Public Platform as a Service 2011–2015 Forecast (IDC #232215,

February 2012).

Servers and basic storage include all server capacity and raw storage capacity,

respectively, delivered as cloud services. Storage-related cloud services that are

above and beyond raw storage — including backup, archiving, continuity, and

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©2012 IDC #233396 17

data synchronization — are classified as advanced storage and categorized

under system infrastructure software cloud services (a submarket of SaaS). For

more detail on the storage and advanced storage cloud services taxonomy, see

IDC's Worldwide Storage and the Cloud Taxonomy, 2011 (IDC #228309, May

2011).

The network and client cloud services segments are newly added to IDC's IaaS

cloud services category. For this document, we are simply and broadly defining

these as network functionality and client functionality, respectively, delivered as

cloud services. These segments will be defined in more detail in 1H12 as part of

IDC's expanded cloud services forecast process.

As noted previously, the "other" SaaS, "other" PaaS, and "other" IaaS cloud

services segments are to accommodate cloud services offerings beyond those

that are cloud versions of simple primary market product offerings. Such offerings

could include complex/compound solutions that integrate the functionality of

multiple point solutions (such as cloud application platforms) and entirely new

offerings that were not previously offered in prior delivery models and are now

possible through the cloud model. Over time, as these "other" offerings become

better defined, and larger, we will pull them out of "other" into their own

categories (as we have with CAP).

F U T U R E O U T L O O K

As noted, cloud services should be viewed as a delivery/consumption model that

may, and will, be applied to most traditional IT functional segments. But the new

taxonomy (refer back to Figure 1) is certainly not static. We expect wholly new cloud

offering categories to certainly emerge — and IDC will expand its cloud services

categories to incorporate functional offerings that fall outside of, or represent new

combinations of, our current IT taxonomy. But currently, the bulk of customer IT cloud

services buying can be tied directly to existing functional IT offering categories.

It is important to note, however, that while we generally use traditional IT product

markets naming (e.g., applications and systems infrastructure software) to describe

functionally similar cloud offerings, cloud versions of these offerings are

fundamentally different from the traditional offerings they mimic: IT cloud services

include all required supporting IT resources under the covers (i.e., they are online

versions of what used to be called turnkey systems). They are different from

traditional IT products in that they combine characteristics of both traditional IT

product and services delivery models.

E S S E N T I A L G U I D A N C E

Creating definitions and taxonomies around a market as rapidly emerging and

evolving as IT cloud services is challenging. But the core cloud services principles

that we identified in 2008 have held up very well and have kept our definitions and

taxonomy (and the forecasts built around them) from shifting much in the past four

years.

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18 #233396 ©2012 IDC

These core principles that continue to inform our definitions, taxonomies, and

forecasts are:

Don't "reinvent the wheel" by creating new functional markets where ones

already exist. Cloud services are a new delivery/consumption model that can be

applied to all existing functional offerings as well as enable entirely new offerings.

It makes absolutely no sense to reinvent new functional categories and names

for existing functionalities delivered through the cloud model; in fact, it makes it

harder to analyze the cannibalization effect: the shift of spending for a functional

capability across different delivery models. New categories and names should, of

course, be created when there are truly new functional offerings created.

Pay attention to all eight cloud service attributes. Cloud services are about all

eight of the cloud attributes we identified in 2008 — including the often

overlooked but absolutely essential API requirement. The hallmark of the "cloud

services era" will undoubtedly be the emergence of huge innovator ecosystems

(and millions of new solutions) around those APIs. In the end, the innovation that

results from the "open API" principle of cloud services will be even more

important than the economic benefits of the "shared" and "scalable" principles.

Acknowledge that cloud services are about what the customer buys, not

how the SP delivers it. Cloud services should be described by the attributes

customers experience, not by the implementation choices made under the

covers. That's why our eight attributes focus on things the customer sees and

experiences and don't mention implementation details like "virtualization." This

takes us out of the religious wars over what the best implementation

architectures and technologies are. Those choices are important, of course —

they are likely to determine who the winning suppliers are (and would be

factored, for example, in an IDC MarketScape vendor assessment) — but they

don't belong in the definition of an offering category like "cloud services." The

definition should be about what's delivered to a customer, not how it's delivered.

Count the money where it's spent, and only count real cloud services.

Cloud services spending forecasts should account only for cloud services — for

example, if customers are buying cloud server capacity on which to run a

traditional business application, we count their cloud server payment in the cloud

server category; we don't count their application payments to their ISV in cloud

applications since the application itself isn't a cloud service — and only in the

cloud services category in which customers perceive they are buying — for

example, when customers pay for a CRM cloud service, we count those

payments in the CRM cloud services category; we don't spread their payment

across CRM and the infrastructure services the cloud SP may need to buy to

support their CRM cloud offering.

The good news is that it's very likely that these principles will remain valid for quite a

while. But the obvious challenge is that the cloud services market continues to evolve

in significant ways, almost daily. We will continue to monitor the market and look for

how these principles — and the definitions and taxonomy that are built on them —

need to change to adapt to the changing realities of this fast-moving market.

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©2012 IDC #233396 19

L E A R N M O R E

R e l a t e d R e s e a r c h

Worldwide Public Platform as a Service 2011–2015 Forecast (IDC #232215,

Forthcoming)

Worldwide Public Cloud Application Platforms 2011–2015 Forecast (IDC

#232171, January 2012)

Japan Cloud Services 2011–2015 Forecast Update (IDC #JP1972808T,

December 2011)

Worldwide SaaS CRM Applications 2011–2015 Forecast and 2010 Vendor

Shares (IDC #232230, December 2011)

Worldwide Storage in the Cloud 2011–2015 Forecast: The Expanding Role of

Public Cloud Storage Services (IDC #232115, December 2011)

Worldwide IT Project and Portfolio Management SaaS 2011–2015 Forecast and

2010 Vendor Shares: SaaS Drives IT PPM Adoption (IDC #232271, December

2011)

Worldwide Cloud Security 2011–2015 Forecast: A Comprehensive Look at the

Cloud/Security Ecosystem (IDC #230389, December 2011)

Hungary Cloud Services Market 2011–2015 Forecast and 2010 Competitive

Analysis (IDC #CEMA17873, November 2011)

Croatia Cloud Services Market 2011–2015 Forecast and 2010 Competitive

Analysis (IDC #CEMA17723, November 2011)

European Public Cloud Forecast Update (IDC #SP52T, November 2011)

Poland Cloud Services Market 2011–2015 Forecast and 2010 Competitive

Analysis (IDC #CEMA17721, November 2011)

Russia Cloud Services Market 2011–2015 Forecast and 2010 Competitive

Analysis (IDC #CEMA17640, October 2011)

Slovenia Cloud Services Market 2011–2015 Forecast and 2010 Competitive

Analysis (IDC #CEMA17566, September 2011)

Worldwide Software as a Service 2011–2015 Forecast and 2010 Vendor Shares

(IDC #229440, August 2011)

Worldwide Cloud Testing and ASQ Software as a Service 2011–2015 Forecast

and 2010 Vendor Shares: Testing Emerges from and for the Cloud to Drive

Business Agility (IDC #229671, August 2011)

Worldwide System Management Software as a Service 2011–2015 Forecast and

2010 Vendor Shares (IDC #229286, July 2011)

Page 24: IDC Worldwide IT Cloud Services Taxonomy, 2012

20 #233396 ©2012 IDC

IDC's Software Taxonomy, 2011 (IDC #228020, July 2011)

Worldwide and Regional Public IT Cloud Services 2011–2015 Forecast (IDC

#228485, June 2011)

Asia/Pacific (Excluding Japan) 2011–2015 Cloud Services Forecast (IDC

#AP6684407T, June 2011)

Canadian Public IT Cloud Services: 2011–2015 Forecast Overview (IDC

#CA2CCS11, June 2011

IDC's Worldwide Storage and the Cloud Taxonomy, 2011 (IDC #228309, May

2011)

Romania Cloud Services Market 2011–2015 Forecast and 2010 Competitive

Analysis (IDC #CEMA17725, December 2010)

Defining "Cloud Services" and "Cloud Computing," blogs.idc.com/ie/?p=190

"Defining 'Cloud Services' — an IDC update," blogs.idc.com/ie/?p=422

S y n o p s i s

This IDC study discusses the IT cloud services market, which continues to grow and

evolve at an astonishing rate. New offerings come to market regularly, often defining

new functional segments and new deployment options. This study updates IDC's

definition of cloud services and the various cloud services deployment models. It also

updates and expands IDC's taxonomy of the IT cloud services market.

"This study provides the fourth update of IDC's cloud services taxonomy since 2008,"

according to IDC SVP and Chief Analyst Frank Gens. "Clients will be glad to know

we've maintained strong continuity with our prior taxonomies. But we've also made

some major enhancements, including incorporating the widely used NIST taxonomy,

adding important categories such as network and client cloud services, and adding a

new, strategically important segment called cloud application platforms that defines

integrated PaaS platforms such as Google's App Engine, Microsoft's Azure, and

salesforce.com's Force.com."

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©2012 IDC #233396 21

C o p y r i g h t N o t i c e

This IDC research document was published as part of an IDC continuous intelligence

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contact the IDC Hotline at 800.343.4952, ext. 7988 (or +1.508.988.7988) or

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