How can I benefit from the cloud? I hear about the cloud all the time, but what will it really do for me and my business? These and other questions about “cloud” and IT services are part of the day in the life of every SMB (Small to Medium-sized Business) customer in the U.S. market. The reason they are in business or running a business does not center around Cloud and IT, but on their business. Whether it is keeping the retail sales flowing or food products going out the door, which is why they are in business. A good IT services and Cloud provider is there to provide the support they need to run their businesses more efficiently and effectively so they can truly focus on what they love, their business. Michael Toplisek, the EVP of Marketing and Product at EarthLink will use real customer examples to illustrate how excellent cloud services can help the smb customer lift some of the burdens of their daily business allowing them to do the things they do best.
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Keynote Address at 2013 CloudCon: A day in the life of the SMB by Michael Toplisek (EVP, Earthlink)
1. A Day In The Life of
the SMB Owner
Mike Toplisek
EVP Marketing & Sales
2. The SMB
Very Small (1-25) Small (26-99) Medium (100-999)
Site Location • Primarily one location or
very localized
• Localized geography • Dispersed but national
geography
IT Resources • Limited or no IT resources
• Minimal influence of IT
professional
• Very few IT resources
• 17% has dedicated IT full-
time FTE (1.2 avg.)
• Use local IT contractor
• Small but dedicated IT
• 75% has dedicated IT full-time
FTE (4.2 on average)
4. Business Segment Drives IT Behavior
Very Small (1-25) Small (26-99) Medium (100-999)
Site Location • Primarily one location or
very localized
• Localized geography • Dispersed but national
geography
IT Resources • Limited or no IT resources
• Minimal influence of IT
professional
• Very few IT resources
• 17% has dedicated IT full-
time FTE (1.2 avg.)
• Use local IT contractor
• Small but dedicated IT
• 75% has dedicated IT full-time
FTE (4.2 on average)
IT Service
Purchase
• Web or call center by
owner with limited inputs
• Web or call center by
owner or manager with
inputs from co-workers
• In-house IT staff (FTE or part-
time) are responsible for most
IT Purchase
Drivers
• Business support needs
• Price and awareness of SP
service availability
• Operational efficiencies
• TCO and security
• Business continuity and drive
revenue growth
• TCO, security and scalability
IT Behavior • Secondary to running
overall business
• Limited knowledge on
technology & SP options
• Simple point products
• “Settle” for and remain
with current services
• Secondary business
function
• Not familiar with new
technology / services
• Simple solutions
• Most “settle” for current
services
• IT as a main function
• Aware of new technologies, but
not the business value
• Inexpensive solutions with
kernels of large business
functionality
• Advanced but tried & tested
6. Cloud Solution for Businesses of All Sizes
With IT budgets relatively flat at most companies, and
with competitors fighting for every scrap of business,
CIOs can no longer afford to spend 70% to 80% of their
precious funds supporting and maintaining existing
systems. They must shift, permanently, a big chunk of
their budgets into growth initiatives–IT projects and
programs that open new markets and drive new
business rather than just maintain the status quo.
-Information Week
“
”
7. Typical SMB IT Challenges
How do I minimize IT capital expenditures & reduce
IT operating expenses, without sacrificing services?
How do I reduce the complexity of my IT operations?
How can I scale IT resources to keep pace with
rapidly changing business requirements?
How do I keep my mobile workers better
connected to our applications and email?
Does my backup plan adequately protect my
data from man-made and natural disasters?
Does our email platform enable maximum
employee productivity and collaboration?
How do I get my limited IT staff refocused on
strategic revenue generating initiatives?
Does my network security protect my IT
environment and sensitive data and meet
the regulatory compliances?
8. Delivers real business value, right now!
1. Dramatically
Reduce Costs
so you can invest in business
opportunities
3. Deliver and Scale IT
Services Flexibly
to keep pace with your business
requirements
How Cloud Helps Your Business
2. Reduce
Complexity
simplifying operations
and maintenance
9. Respond to Changing Business Requirements
• Meet today’s business requirements
– Consolidate and simplify infrastructure and operations, while reducing
on-premise spare capacity
– Measure and manage service levels consistently across on-premise and
cloud infrastructure
– Improve quality of service with scalable infrastructure and higher
availability
• Adapt quickly to new demands
– Add capacity economically in the cloud as you grow
– Scale quickly to meet seasonal or event-related demand spikes
– Respond quickly to competitive initiatives or new customer requirements
• Accelerate innovation
– Reduce time to market with streamlined application development,
testing, provisioning, and deployment on compatible cloud infrastructure
– Free IT resources from rewriting applications for the cloud, so they can
contribute real business value
11. Barriers to Cloud Adoption
Source: Cisco IBSG
N = 510
Reasons for Not Buying Cloud Services
Among SMBs <1000 Employees
Security concerns are the barrier to uptake
12. Barriers to Cloud Adoption
We don’t have the
resources to get
people trained
We don’t have the
resources to
implement new
technologies and
applications
We have resources
but just haven’t had
the time
52%
60% 57%
15. Growth of Cloud Services
60% of the SMB
market has adopted
or will adopt Cloud
services in the next
12 months…
Source: EarthLink Survey conducted by AV&Co. 2012
16. The College Network
• Business Challenges
– Small IT team
– Spent more time troubleshooting issues
than solving business problems
– Needed DR plan, had too many outages
• Business Benefits
– Avoided $200-300K of CAPEX
– A business continuity structure to
ensure systems are always on
– Gained productivity - employees more
efficient, processes easier, data
availability higher and better customer
satisfaction
– Refocused IT resources to bring greater
value to the business while EarthLink
maintains and manages their
infrastructure
“With online learning, our IT
environment is very
important, if the systems
aren’t available, then our
customers don’t have
access to their course
materials.”
Ryan Sallee, CIO
17. Ciao Bella
• Business Challenges
– Aging Servers, slow performance on
mission-critical applications
– Unreliable email provider, frequent
outages
– No dedicated IT staff
– Controller spent too much time
troubleshooting IT infrastructure
• Business Benefits
– Avoided $80K of CAPEX
– Improved application performance
– Increased security
– Reliable email service
– Eliminated need for local maintenance
contracts
– Allows controller to focus on his duties
instead of trouble shooting IT
– Business continuity
• The Solution
– All servers and applications on
Cloud Hosting platform in
EarthLink Data Center
– Migrated entire NJ data center
to EarthLink
“We needed a total refresh. Our
newest server was eight years old.”
Bob Serchuk, Controller, Ciao Bella
18. Business Continuity in Action
• Super Storm Sandy
– Super storm Sandy hits NJ in
October 2012
– Two–week power outage at
NJ headquarters
• Ciao Bella stays in business
– Servers/applications and email
stayed fully operational in
EarthLink Data Center
– Nationwide sales team able
to submit orders for production
in Oregon
– Distribution centers able to
ship & invoice orders
“If we didn’t move to cloud services, we
would have been out of business
during the hurricane.”
Bob Serchuk, Controller, Ciao Bella
21. Current/Future Use Of SaaS & Managed Infra. Services
SMB Adoption of Cloud Services
Source: Cisco IBSG
Basic
Services
Emerging
Managed
Services
EmergingCloud/
Application
Services
Significant upside / “Pure IaaS” has lowest adoption
22. Cloud Support is of Paramount Importance
Would you prefer to purchase Cloud Services from
your current provider of Internet Access Services,
or from a different provider?
Source: Cisco IBSG SMB Service Delivery Survey, 2012
Prefer to Purchase Cloud Services
from Current Internet Access Provider
If the Internet Access Services that your company currently
uses were unable to effectively support the use of Cloud
Services, how likely would you be to switch to another
provider that could offer Internet Access Services that were
optimized for Cloud Services (e.g., quality of service, SLAs)?
Willingness to Switch Internet Access
Provider for Better Cloud Support
Sample Size =
761
23. SMB Cloud Drivers
Source: Cisco IBSG
Increase Interest in Buying Cloud Services
Among SMBs <1000 Employees
24. Assets to Consider for Cloud Services…
Source: Cisco IBSG SMB Service Delivery Survey
Potential Differentiation with Network assets
Criteria When Choosing a Cloud Provider
Among SMBs <1000 Employees
Delivery of the technology as a service; Consumption of IT on a pay as you go
Cloud Services is a technology that has become a viable solution to these types of challenges. Specifically a Cloud Hosting solution represents a very attractive solution for businesses of all sizes ? Outsourcing the routine maintenance of IT infrastructure and platforms is an ideal way to refocus skilled IT resources and scarce IT budgets to more strategic business building projects.
Business owners and IT managers are continuously faced with the challenges of having enough budget and IT staff available to meet the business ’s demands for supporting and expanding IT systems and applications. Most businesses would like to reduce the complexity of their IT infrastructure, and be able to scale their IT capabilities to accommodate the changing business requirements. They want to be able to get new IT services rolled out faster to support customers and employees. They want to enable mobile employees to utilize their personal and company owned devices to maximize productivity, without compromising security of the data. They know there ’s no way to stop Mother Nature if she’s sending a hurricane, tornado, ice storm or earthquake at their data center, Servers and systems will crash without warning, and man-made disasters are just as unpredictable, so the only option is to have a backup plan to ensure that your data remains recoverable. Security remains a top concern for IT as malicious software and intruders are on the rise. They need to protect their sensitive data and many must meet mandated regulatory compliance for security processes. They wants to have an email service that maximizes employee productivity while minimizing the cost and headaches associated with managing the hardware, software and security of their email. Add to this the federal compliance requirements and running an email service on an in-house basis can easily become an unwanted burden They want to keep IT Staff focused on strategic revenue generating initiatives, and less time on routine maintenance. Many businesses are now developing or considering strategies to virtualize and use the Cloud to help meet these objectives, but they want to do so while maintaining complete control, improving security and reducing costs.
So the cloud is a big part of IT ’s future. But cloud computing isn’t just a long-term future trend. Even if you don’t depend on mobile users, hardware, and apps, cloud capabilities are available right now to deliver real value – and they deserve a close look. Cloud computing can help you: Dramatically reduce costs , maximizing resource utilization by pooling, automating operations processes, and using public cloud services where appropriate. (maximize roi, consolidate resources, automate, host/outsource) Reduce complexity by moving infrastructure components and management processes from a multi-silo infrastructure to resource pools that can be managed as units instead of one machine at a time. Deliver and scale IT services – regardless of where they are sourced or delivered – flexibly using policy-driven automation and self-service.
Cloud solutions for business focus on flexibility & agility – keeping on-premise resources lean and efficient, but with plenty of spare capacity available in the cloud when the business environment changes. Using virtualization to consolidate on-premise resources improves efficiency and cost-effectiveness, maintaining quality of service and keeping IT focused on value-add innovations And when customer demand, competitor initiatives, or growth requires a change in capacity, cloud infrastructure allows instant adaptation. And it works in both directions – when the capacity is no longer required, scaling down doesn ’t require a lot of time and effort to decommission infrastructure, and there’s no investment wasted on idle capacity Most important, cloud infrastructure allows your business to innovate quickly, at much lower levels of risk
Q: What are the main reasons that you would not buy and use a hosted or subscription technology service (choose up to 3)? This is consistent across all surveys of all business sizes, notice we ’ve shown split lower end and upper end of SMB. However, businesses do adopt, despite the concerns – take SFDC. Notice for the lower end of the market – it implies simplicity is very important.
Who is The College Network? An early pioneer in the online education industry Growing technology infrastructure serving 200 employees in Indianapolis and Las Vega Supported 150 independent contractors nationwide IT team managed 50 physical servers at its HQ and another 65 offsite The Solution MPLS, Cloud & Data Center FW
Who is Ciao Bella? Gelato, sorbet and frozen yogurt maker Headquartered in Florham Park NJ Oregon manufacturing plant Nationwide sales team & distributors The Solution All servers and applications on Cloud Hosting platform in EarthLink Data Center Migrated entire NJ data center to EarthLink Platinum Level of Managed Services Migrated email to EarthLink Secure Email
The biggest change
Q: When, if ever, do you anticipate your company will use the following hosted or subscription-based technology (also known as ‘cloud’) services for your software applications? Basic services 16-18% Managed services 22-27% SaaS Horizontal Apps: 20-27% SaaS Vertical Apps: 36-38% IaaS/PaaS 29-45%
What would increase your interest in buying a cloud service? Guarantees (security, uptime/reliability) and a clear business case are key to encourage uptake. This is an educational opportunity for the SP (slightly higher for upper end on security) Also an advantage for the cloud provider who is also the bandwidth provider
Q - What do you consider to be the most important criteria when choosing a provider of Cloud Services?