ARC's Ralph Rio Easy IT Presentation @ ARC Industry Forum 2010
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ARC's Ralph Rio Easy IT Presentation @ ARC Industry Forum 2010 in Orlando, FL. Easy IT, Cloud Computing, SaaS Cloud Hosted: •Access via Internet Virtualization: •Multiple instances per server •Economies of Scale Software as a Service: •Improved Pricing Model
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ARC's Ralph Rio Easy IT Presentation @ ARC Industry Forum 2010
- 1. This presentation is copyrighted by ARC Advisory Group (ARC). The information is proprietary to ARC and it may be not be reproduced without prior permission from ARC. Easy IT Cloud Computing, SaaS Ralph Rio Research Director ARC Advisory Group rrio@arcweb.com
- 2. 2 © ARC Advisory Group This presentation may be not be reproduced without prior permission from ARC. Before IT Ford’s River Rouge Plant in 1927 Big and Vertically Integrated • 75,000 employees and 53,000 machine tools on 2,000 acres • 27 miles of conveyors and 90 miles of railroad tracks Inflexible • 1+ year to convert from Model T to Model A • GM grew to #1 while Ford fell to #2
- 3. 3 © ARC Advisory Group This presentation may be not be reproduced without prior permission from ARC. Increasing need for IT More: • Products & SKUs • Lots or Batches • Change • Regulation Less: • Time Dynamic Trend Products and options Increasing Production lot or order size Smaller Quantity of lots and orders Increasing Product Lifecycle Shorter Time for New Prod. Intro. Shorter Dynamic global market Increasing Schedule changes Increasing Government Regulations Increasing Cost control pressures Increasing Make to Order Increasing More / Less Time = Faster Speed of Business
- 4. 4 © ARC Advisory Group This presentation may be not be reproduced without prior permission from ARC. Sales Marketing Logistics Manufacturing Finance Product Development IT Increasing need for IT Stovepipes manage similar skills & resources Business Processes Stovepipes Major Business Processes are cross-functional
- 5. 5 © ARC Advisory Group This presentation may be not be reproduced without prior permission from ARC. Best Practices: IT Does Help How are Business Processes Managed? (routing, procedures, setup, etc.) Leaders Use IT Systems for BPM 9% 23% 32% 59% 86% 0% 20% 40% 60% 80% 100% Ad Hoc Verbal Instruction Institutional Knowledge Written Documents IT Systems Leaders 16% 28% 53% 41% 16% 0% 20% 40% 60% 80% 100% Ad Hoc Verbal Instruction Institutional Knowledge Written Documents IT Systems Followers 106 survey respondents from manufacturing companies
- 6. 6 © ARC Advisory Group This presentation may be not be reproduced without prior permission from ARC. Collaborative Manufacturing Distributed Manufacturing Logistics Providers Distributors Retailers Contract Manufacturers Logistics Providers Manufacturing Plant Manufacturing Plant Manufacturing Plant Customers Collaboration
- 7. 7 © ARC Advisory Group This presentation may be not be reproduced without prior permission from ARC. Dilemma: Systems Have Not Kept Pace Older Applications and IT Infrastructure Limit PerformanceSource: ARC Advisory Group
- 8. 8 © ARC Advisory Group This presentation may be not be reproduced without prior permission from ARC. Hosting How do we accelerate? Easy IT: Cloud & SaaS Cloud Hosted: • Access via Internet Virtualization: • Multiple instances per server • Economies of Scale Software as a Service: • Improved Pricing Model Logistics Contract Mfg. Plant Plant Distribution Suppliers Users Users Users Users
- 9. 9 © ARC Advisory Group This presentation may be not be reproduced without prior permission from ARC. SaaS Costs Traditional License: • Large up-front license and implementation • Maintenance fee Cloud and SaaS: • Small set-up charge • Periodic service fee • Variable usage cost License + Implementation High Initial Cost with Fixed Maintenance Fee SaaS Variable Based on Usage $ Time Periods 0 1 2 3 4
- 10. 10 © ARC Advisory Group This presentation may be not be reproduced without prior permission from ARC. SaaS Hosting Benefits: Less Technical Risk IT Infrastructure Support • Patch management • Application configuration • Server optimization • Network management • Security • Back-up & recovery • 24x7 availability Scalability for demand Shorter implementation Obtain new applications with limited IT resources License + Implementation High Initial Cost with Fixed Maintenance Fee SaaS Variable Based on Usage $ Time Periods 0 1 2 3 4
- 11. 11 © ARC Advisory Group This presentation may be not be reproduced without prior permission from ARC. SaaS Financial Benefits: Less $ Risk Conserve cash Expense rather than capital for tax benefits Lower Risk • Cost varies with business activity • Financially easier to switch if wrong application • High incentive for support from service provider License + Implementation High Initial Cost with Fixed Maintenance Fee SaaS Variable Based on Usage $ Time Periods 0 1 2 3 4
- 12. 12 © ARC Advisory Group This presentation may be not be reproduced without prior permission from ARC. Further Consideration Application Integration and Managing Upgrades • Supplier owns upgrades • Integration to applications on-premises via internet Who Owns the Data? • Data with provider • Extortion when switching Consider SaaS when benefits are risky May need to ask for SaaS • Sales commission plan License + Implementation High Initial Cost with Fixed Maintenance Fee SaaS Variable Based on Usage $ Time Periods 0 1 2 3 4
- 13. 13 © ARC Advisory Group This presentation may be not be reproduced without prior permission from ARC. SaaS Supplier AT&T Services AT&T Hosting and Application Management • Oracle • SAP • More … AT&T Synaptic Hosting • A Pay-As-You-Go • Utility-Based Use-cases during today’s lunch License + Implementation High Initial Cost with Fixed Maintenance Fee SaaS Variable Based on Usage $ Time Periods 0 1 2 3 4
- 14. 14 © ARC Advisory Group This presentation may be not be reproduced without prior permission from ARC. Easy IT Cloud Computing, SaaS Business Benefits Drive Rapid Adoption
- 15. 15 © ARC Advisory Group This presentation may be not be reproduced without prior permission from ARC. Acronyms Used in This Presentation BPA Business Process Automation BPM Business Process Management CMM Collaborative Management Model IT Information Technology SaaS Software as a Service SKU Stocking Unit A complete list is available on ARC’s website: ARCweb.com