Cloud Computing

Challenges and Opportunities

May 2012 study synthesis

Objectives
The following objectives have been identified:
To analyze: The current situation and impact

To identify: opportunities for growth

use and knowledge of cloud among Spanish SME and micro-
enterprises
economic perspectives
strategic perspectives

TABLE OF 1. Concept and current situation

CONTENTS 2. Survey of SMEs in Spain

3. Expert opinions

4. Impact Evaluation

5. Best practices
3
 1.
Concept and
current situation
 1.

What is cloud computing?

It is a model for enabling ubiquitous,

convenient, on-demand network access to
a shared pool of configurable computing
resources (e.g., networks, servers, storage,
applications, and services) that can be
rapidly provisioned and released with
minimal management effort or service
provider interaction.

NIST (National Institute of Standards and Technology) definition

5
 1.

Features associated with cloud computing

Ability to perform functional adjustment according Scalability
to specific demand

Ability to automatically assign computing resources Self-service

subject to the specific needs of the user on-demand

Invoice model based on use, which means

that cost is subject to use Pay per use

Multiple The provider can facilitate

users dynamic assignment by sharing
computing resources among
several users
Unrestricted Universal, continuous and
access multidevice access

It makes it possible to isolate contracted computing

Abstraction resources offered by the provider from the computing
infrastructure of the entity
6
 1.

Classification of cloud
IaaS Hybrid
PROVISION of infrastructure as a
service
cloud
USE of mixed infrastructure

Service PaaS Deployment Public

Types
Models SUPPLY of platforms aimed at
development, testing, deployment, hosting
or maintenance as a service
Cloud
OFFER of external services of
Office automation virtualized computing, external
Social Networks to the client
SaaS 2.0 Network
CRM
ERP
USE of licenses as a service
Private Community
BPaaS cloud cloud
DELIVERY as a service of highly
DELIVERY of virtualized services, but
standardized business DELIVERY of common supply to similar
with internal management and
processes clients
infrastructure

Enabler Provider
HW + SW

Actors Broker
Auditor involved
Final customer
Source: ONTSI 7
 1.

Cloud advantages and challenges

Advantages Economic and financial
Challenges

S peed and flexibility

d ata security and
confidentiality
o utsourcing of
technological operations

i mprovement in
technological
management and security
h igh level of
standardization and
technological integration

u biquitous access and

availability d ependence on the
provider of the technological
services

p ositive impacts on
sustainability (green IT) and on
t
s
echnological amortization

ervice availability
the economy 8
 1.

Interesting facts:
01.
According to IDC, global revenue
from cloud services will reach 55,500 02.
million dollars in 2014, with growth
rates of nearly 30%. By 2014 the
market share will have reached "A study published by Gartner
nearly 12%, positioning itself as the identifies Spain as being amongst
main driver in the industry the thirty leading locations to host
externalized services. The main
Source: “Worldwide and Regional Public IT Cloud Services 2010-2014 assets of Spain highlighted by
Forecast”, IDC Gartner are: reduced costs,
knowledge of other languages than
03. Spanish, good IT and transport
infrastructure and a strong link with
"Cloud computing saves costs and Latin America"
facilitates SMEs’ access to
computing, making it possible for Source: “Cloud Computing”, Bankinter Innovation Foundation
them to compete at the same
technological level as large
organizations"
Source: “Cloud Computing”, Bankinter Innovation Foundation
9
 2.
Survey of SMEs
in Spain
 2.

45.2% of SMEs have some knowledge of*cloud

KNOWLEDGE OF CLOUD COMPUTING SOLUTIONS

20.5%
HAVE a perfect knowledge of
cloud computing

24.7%
KNOW some examples or have
heard of some examples

54.9%
DO NOT KNOW cloud
computing solutions

"This figure is obtained as a result of adding up the total percentage of companies that
have a sound knowledge of cloud computing and those that can mention some Based on: Total number of companies (0 to 249), Source: ONTSI 11
examples. with websites
 2.
27,2%
60.1%
algunos ejemplos, of micro-enterprises do not have any knowledge
o hablar de ellos
of cloud solutions 24,2%

KNOWLEDGE OF CLOUD COMPUTING SOLUTIONS BY COMPANY SIZE

28,9%
No los conozco Compared to micro-
60,1%
43,9%
43.9%
enterprises, SMEs have
Sí, los conozco deeper knowledge of
perfectamente
HAVE perfect knowledge
15,7%
15.7% cloud, 28.2 percentage
point higher.
27.2%
27,2%
algunos ejemplos,
o hablar de ellos
24,2%
24.2%
DO KNOW

some examples

28.9%
28,9%
No los conozco
60,1%
60.1%
43,9%
Sí, los conozco
DO perfectamente
NOT KNOW From 10 to 249
From 0 to 915,7% Based on: Total number of companies , with Source: ONTSI 12
websites
 2.

21.7% of enterprises that have some knowledge of

cloud use cloud-based solutions
USE OF CLOUD COMPUTING SOLUTIONS

0.9%
There is a high level of 21.7%
satisfaction with cloud
technology

There are no significant

differences in the use of
cloud solutions as regards
to company size
It has used it in the past but does
not use it anymore
It is currently using it

Never used it
77.5%
Based on: Total number of companies (0 to 249), with websites Source: ONTSI 13
 2.

There are no significant differences as to the degree of

cloud solution use by company size
USE OF CLOUD COMPUTING SOLUTIONS BY COMPANY SIZE

77.5%

77.4%

20.1%

22.2%

2.5%

0.4%

From 10 to 249
From 0 to 9
14
Based on: Total number of companies (0 to 249) with websites that have
Source: ONTSI
some knowledge of cloud
 2.

IaaS is the most commonly used service model

CHARACTERISTICS OF CLOUD COMPUTING SOLUTIONS USED

76.1% 50.6%
USE of some solution
USE of some solution 18.8%
USE of some solution

IaaS SaaS PaaS

16.7% of the total

Storage service is the number of enterprisesD BMS solutions
(Database
most used IaaS use CRM solutions Management
solution (68.5%) based on SaaS Systems) stand out
Source: ONTSI 15
Based on: Total number of companies using cloud with websites
 2.

Private Cloud is the deployment type most

commonly used
CHARACTERISTICS OF CLOUD COMPUTING SOLUTIONS USED

Environments controlled by
the organization
Private Cloud

Focused on niches:
59.9%
Community
Cloud
education
1.7%
health care…
13.9% 33.8%
Often in larger Higher levels of
Hybrid Cloud
companies Public Cloud elasticity and
scalability

Based on: Total number of companies using cloud, with Source: ONTSI 16
websites
 2.

47.4 % of companies using cloud use

cross-cutting solutions
BUSINESS PROCESSES WITH HIGHER CLOUD SOLUTION INTEGRATION

34.7% 18.2%
47.4% 11.7%

8.9% 8.2%

8.2% 6.6% 2.3%

The whole Commercial and Productive aspects Finance management Quality

company sales
Human resources Innovation Other areas Did not know or failed to
respond
Based on: Total number of companies using cloud, with Source: ONTSI 17
websites
 2.
Higher flexibility and scalability of cloud are the main
reasons for adopting the technology
MAIN REASONS*FOR ADOPTING THE TECHNOLOGY

From 10 to 249 * Five main reasons 0 to 9

66.5%
Greater flexibility and scalability of 52.3%
technology management resources

43.1% Possibility of access from any device 51.3%

connected to Internet

Modernization of business and 42.5%

39.9%
management processes

Avoid capital expenditure on investment

36.9% 27.1%
in technology systems

Increase computing capacity and 27.3%

23.3%
business performance

Based on: Total number of companies using cloud, with Source: ONTSI 18
websites
 2.
The main benefits perceived have to do with time and
costs
PERCEIVED BENEFITS DERIVED FROM USE OF CLOUD COMPUTING APPLICATIONS OR SYSTEMS IN THE COMPANY

70.6%
TIME saving
29.6 % 28 %
16.4%
4.6%

63.4 %
COST saving REDEFINITION PRODUCTS ORGANIZATION OTHER
of internal and services of internal staff
management

48.5%
IMPROVEMENT of productivity in
general
Based on: Total number of companies using cloud, with Source: ONTSI 19
websites
 55,0% 2.
Ahorro en tiempo
More than half of the micro-enterprises consider 76,2%
productivity improvement as a benefit 55,0%

Ahorro en tiempo
PERCEIVED *
BENEFITS DERIVED FROM USE OF CLOUD COMPUTING APPLICATIONS OR SYSTEMS IN THE COMPANY, BY COMPANY
SIZE
76,2% Time saving is
55,0%
55.0% perceived above all in
Ahorro en tiempo small enterprises
64,0% 76,2%
76.2%
Ahorro en costes
TIME saving
63,2%

64,0%
Companies with 10 to
64.0%
Ahorro en costes
249 employees
63.2%
63,2%
perceive slightly
64,0%
higher cost savings
COST saving

Ahorro en costes
42,2%
42.2% 63,2%
de productividad
general
50.7%
50,7%
*Three first benefits mentioned
IMPROVEMENT on productivity 42,2%
From 10 to 249
de productividad Based on: Total number of companies using cloud, with Source: ONTSI 20
in general From 0 to 9
general websites
 2.

76.2 %* of SMEs using cloud are generally satisfied

DEGREE OF SATISFACTION OF ENTERPRISES WITH CLOUD SERVICE PROVIDERS

1.0% 4.3%
0.6%
25.9% are generally very
17.9% 25.9% satisfied with the provider
and/or providers

Only 1.6% of SMEs declared

not being generally satisfied or
rather dissatisfied with
50.3% providers
Very satisfied Rather dissatisfied

Quite satisfied Not satisfied at all *It includes responses from companies that have declared being very or quite satisfied

Somewhat Did not know or failed to

satisfied respond
Based on: Total number of companies using cloud, with Source: ONTSI 21
websites
 2.

More than 75% of SMEs using cloud expressed

a high level of satisfaction with
quality of support and maintenance service
DEGREE OF SATISFACTION* OF ENTERPRISES WITH CLOUD SERVICE PROVIDERS QUALITY OF SERVICE

QUALITY of support and QUALITY of management and QUALITY of installation

maintenance service resource resizing services service

75,1% 67.5% 60.3%

**It includes responses from companies that have declared being very or quite satisfied

Based on: Total number of companies using cloud, with Source: ONTSI 22
websites
 2.

The main concern is related to security and confidentiality

MAIN EXISTING CONCERNS AS REGARDS CLOUDS USE

4.1% 5.5% 8.8% 10.2% 13.2%

17.2% 18% 20.8%

SECURITY AND
LOSS OF
CONFIDENTIALITY
CONTROL OF PROCESSES
Source: ONTSI

26.5% 55.2% Based on: Total number

of companies using
cloud with websites
Other reasons None Variable non-controlled costs Difficulty of migration Responsibility of the provider

Doubts about integrity Doubts about availability Dependence on provider Loss of control of processes Security and confidentiality
23
 2.

Lack of knowledge about the benefits of the technology

is the main barrier to entry
BARRIERS TO ENTRY OF CLOUD COMPUTING IN COMPANIES

Main barriers that have

18.2%
to do with cost, by order
63.1% of importance are the
17.8% following:

30.5%
Budget restrictions
14.2%
Cost factor

High costs related to

4.3% recruitment
24.9%
Difficulty of migration
Lack of knowledge about the benefits Responsibility of the provider
Budget restrictions Doubts about availability
High costs related to recruitment Dependence on the provider

Based on: Total number of companies using cloud, that are aware of its existence but do not use it
Source: ONTSI 24
 2.

Interesting facts:
02.
01. Lack of sufficient knowledge
about the technical and
Enterprises using cloud economical benefits of this new
technological model along with the
computing declare that the
performance level of providers is costs arising from initial
optimal recruitment largely explain the
high percentage of SMEs that do
not use cloud computing

03. 04.
16.1% of SMEs that are aware 63.4% of enterprises using cloud
of the existence of the would recommend the use of the
technology but do not use it technology without any
have expressed their intention of reservation to enterprises with
using it in the future similar characteristics

Source: ONTSI 25
 2.

Data sheet: Survey of SMEs in Spain

Quantitative methodology

Scope

• The scope of the investigation includes micro-enterprises (0 to 9 employees) and SMEs (10
to 249 employees) with websites of some type located in the whole national territory.

Sample size

• Global sample size comprises 1,700 enterpises: 0 to 9 employees 1,413 (83.1%)

10 to 249 employees: 287 (16.9%)

Compiling information technique

• To compile the information, an online survey methodology has been applied, through a
Web ad-hoc application and after previous telephone contact.

Margin of error

• Margin of error for the 1,700 surveys is ± 2.37% under most unfavorable statistic
conditions (p=q=0.5), with 95% degree of confidence.

Work in the field

• Information has been compiled during October and November 2011.

26
 3.
Expert opinions
 3.

Experts from cloud providers

Perceived advantages:
o a new cost model is possible
o it allows enterprises with restricted budgets
to have access to new services
o it eliminates commitments and barriers to
entry making it possible to link
technology costs to revenue

Perceived barriers:
o lack of common legal framework
o loss of control and dependence
by clients
o deep ignorance in the market about what it
is and the advantages it offers
o the development of SaaS services is
very dependant on the capacity
of telecommunication networks
Source: ONTSI 28
 3.

Experts from large client businesses

Perceived advantages:
o cost model without infrastructure
amortization
o it facilitates immediate launch of projects.
o it facilitates focused and business
oriented ICT
o it facilitates access to new services

Perceived barriers:
o growing dependency on the provider
o privacy and legal requirement problems
o possibility of losing control over
the technology, but above all, over the
corporate processes

Source: ONTSI 29

Experts from the Public Administration
Many public entities are
currently carrying out a
previous phase of reflection
and prospect.
3.
Perceived advantages:
o cost savings
o avoiding duplication
o development of teleworking
o shared services consolidation
Perceived barriers:
o integration and interoperability problems
o uncertainty about performance
o "locked-in" effect with providers
Source: ONTSI 30
 4.
Impact
Evaluation
 4.

Estimated impact* of cloud in Spain for 2012

Gross Domestic Generation of

Product (GDP)
3,049
million euro
1€ Invested in cloud

Job creation of Generates

Employment 65,000 1.63 In GDP impact

Employment €
jobs in 2012

Total return of
Public
Treasury 678
million euro
Source: Obtained from the Economic Impact Model developed by 32
*Methodology based on macroeconomic input-output tables. Deloitte
 4.

Environmental impact of cloud

Reduction in CO2 emissions

90%
+
Small deployments
≈ 100 users

Private Cloud Public Cloud

60-90%
Average
Community deployments
Hybrid Cloud
Cloud ≈ 1,000 users

30-60%
Large deployments
≈ 10,000 users

33
Source: Accenture
 4.

Social impact of cloud

Mobile service universalization +
Spread of the Internet and creation of links to the web in mobile devices.

Office universalization.
Mobile access.

Virtual storage
Storaged data in remote servers.

Price reduction for online storage.

Information managers allow the user to expand hard disc storage capacity.

Applications in the cloud

Improvement in competitivity and device offer.

Online service supply.

Interconnectivity and Social Networks

Source: Deloitte 34
 5.
Best
practices
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concerning studies and indicators:

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