Financial will drive commercial innovation in Private Cloud

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Lets take a look at this great chart from Gartner on the amount of spend versus readiness in Cloud BY industry. I’ve highlighted Manufacturing, Financial, and Government as the top three spenders in IT. In terms of readiness Media, Transportation, and Government are in the lead. However, I’d argue that when you focus only on the Fortune 1000 enterprises, most IT shops are very sophisticated and the “readiness” factor becomes less of an issue.

What this chart doesn’t take into account, is the opportunity to deploy highly automated infrastructure based on the profile of the applications being created, deployed, and supported by the organization. When you think about what drives the cost of the business, the shear number of business applications (the more homegrown the better), the higher the cost.

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I’ve spoken to many Fortune 500 enterprises in the financial segment (JP Morgan, Citibank, UBS, StateStreet), and the conclusion is consistent – This segment has by far the most number of applications which are being refactored using new development frameworks and deployed as part of a data center refresh and/or data center consolidation and outsourcing.

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When you look at the number of complex web-based applications being deployed within financial enterprises, you will understand what truly drives their cost structure. It’s not the cost of servers, storage, and networking, but rather the number of application developers and the time it takes to refactor those applications. IT costs become so insignificant when you look at the bigger picture.

Financial enterprises get this…..and, therefore, will drive the innovation in the Private Cloud space.

Other related articles:

  1. Cloud Prophecies: The Cloud Era
  2. SaaS offerings will dominate market (greater value with the end-user application)
  3. Private Cloud Will Drive the Bulk of Revenue in the datacenter (sorry Amazon)
  4. Platform as a Service = Application Focus = $True Value (IaaS is dead)
  5. Financial will drive commercial innovation in Private Cloud
  6. Government and Manufacturing will lead in Public Cloud (SaaS)
  7. Power of IT shifts to Application Developers
  8. System Integrators turn into Managed Service Providers (with Cloud)
  9. SIs are the gateway into large enterprise for new cloud vendors
  10. Open (driving more commodity) will become key For the Channel

Jim Kaskade

Jim Kaskade is a serial entrepreneur & enterprise software executive of over 36 years. He is the CEO of Conversica, a leader in Augmented Workforce solutions that help clients attract, acquire, and grow end-customers. He most recently successfully exited a PE-backed SaaS company, Janrain, in the digital identity security space. Prior to identity, he led a digital application business of over 7,000 people ($1B). Prior to that he led a big data & analytics business of over 1,000 ($250M). He was the CEO of a Big Data Cloud company ($50M); was an EIR at PARC (the Bell Labs of Silicon Valley) which resulted in a spinout of an AML AI company; led two separate private cloud software startups; founded of one of the most advanced digital video SaaS companies delivering online and wireless solutions to over 10,000 enterprises; and was involved with three semiconductor startups (two of which he founded, one of which he sold). He started his career engineering massively parallel processing datacenter applications. Jim has an Electrical and Computer Science Engineering degree from University of California, Santa Barbara, with an emphasis in semiconductor design and computer science; and an MBA from the University of San Diego with an emphasis in entrepreneurship and finance.

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