Where Is Cloud Computing Going? Up, Up And Away!

“An invasion of armies can be resisted, but not an idea whose time has come.”
- Victor Hugo (1802-1885), celebrated French author.

Going by recent reports, cloud computing is indeed an idea “whose time has come.” First, the figures.

According to a report published by market research firm In-Stat, by 2014, businesses in the United States will spend more than $13 billion on cloud computing and managed hosting services. This is in comparison to a trifling $3 billion at present. SaaS (Software as a Service) spending is expected to grow 112 percent annually from 2011 to 2014, while spending on PaaS (Platform as a Service) will increase 113 percent annually to approximately $460 million in 2014. IaaS (infrastructure as a Service) spending will approach $4 billion in the same time frame.

In-Stat is a Arizona-based market research firm that uses “technical, market and end-user research and database models to analyze the Mobile Internet and Digital Entertainment ecosystems.” The company also has offices in Massachusetts and China. The report is part of the firm’s Cloud Computing and Managed Services Spending Forecasts service where five-year spending forecasts are compiled into data sets that end-users can obtain in customised form, allowing them to track the specific topics, trends and issues that affect their business operations.

Although the above figures may seem overly optimistic, they do tie in with numbers released in a Market Monitor report published by the 451 Group late last year. The report predicted that  total cloud computing revenues would touch $16.7 billion by 2015.

In a previous article (How Small Firms Can Benefit Big From Cloud Computing (And Why They Are Not), I had looked at the immense benefits SMEs (Small and Medium Enterprises) can obtain from cloud computing, and also the issues holding back its widespread adoption. According to the aforementioned In-Stat report, these issues are likely to be solved by 2014, considering that it predicts that small and home offices comprised of one to four employees will lead the adoption of cloud computing over the next three years.

Although spending across all sectors and size of business is projected to grow, there are some segments where growth will be staggering,” said Greg Potter, research analyst at In-Stat. “The professional services and healthcare verticals will see the largest growth in spending on cloud computing services, growing over 124 percent between 2010 and 2014.”

The report, titled US Business Spending by Size of Business and Vertical, 2009–2014: Cloud Computing and Managed Hosting Services, provides forecasts of US business cloud computing and managed hosting spending for the 2009–2014 period with detailed segmentation by product category, size of business, and vertical market.

Forecasts are broken into the following size-of-business segments and sub-segments:

  • SOHO business (1 to 4 employees)
  • Small business (5 to 9 employees, 10 to 19 employees, and 20 to 99 employees)
  • Mid-Sized business (100 to 499 employees and 500 to 999 employees)
  • Enterprise (1,000 to 4,999 employees, 5,000 to 9,999 employees, and 10,000 or more employees)

Forecasts are also broken down further into the following vertical markets:

  • SOHO (Small Office Home Office) business (1 to 4 employees)
  • Small business (5 to 9 employees, 10 to 19 employees, and 20 to 99 employees)
  • Mid-Sized business (100 to 499 employees and 500 to 999 employees)
  • Enterprise (1,000 to 4,999 employees, 5,000 to 9,999 employees, and 10,000 or more employees)
  • Forecasts are also broken down further into the following vertical markets:
  • Administrative and support services, waste management
  • Arts and entertainment
  • Construction
  • Education
  • Finance and insurance
  • Forestry, fishing, and agricultural services
  • Government
  • Healthcare and social services
  • Hospitality and food
  • Information and communication
  • Management of companies and enterprises
  • Manufacturing
  • Mining
  • Other services
  • Professional services
  • Real estate
  • Retail trade
  • Transportation utilities
  • Wholesale trade

It seems that there is only one way that cloud computing can go now – up, up and away!

By Sourya Biswas

sourya

Sourya Biswas is a former risk analyst who has worked with several financial organizations of international repute, besides being a freelance journalist with several articles published online. After 6 years of work, he has decided to pursue further studies at the University of Notre Dame, where he has completed his MBA. He holds a Bachelors in Engineering from the Indian Institute of Information Technology. He is also a member of high-IQ organizations Mensa and Triple Nine Society and has been a prolific writer to CloudTweaks over the years... http://www.cloudtweaks.com/author/sourya/

Comments

  1. says

    Clearly service based computing will only increase. Conceptually it has always made sense. The hurdles have been political, perceptual and technical.

    As for the numbers…I really don’t care which source makes the forecast. They’re all throwing darts at a board. It is impossible for any of them to accurately forecast demand/growth for the ambiguous “cloud”. These days a market forecast is any single or double digit number followed by the word billion.

  2. Jay Godse says

    Cloud computing gives business managers a way to tie IT expenses with the revenues of ongoing business processes. There is minimal up-front capital investment. Also, money does not have to be spent to create and operate an in-house data center, or a much smaller one can be built with the rest of the resources on a cloud infrastructure.

    Another thing is that many cloud providers provide on-demand computing resources. You only pay for them when you are using them, and computing resources can be activated in seconds or minutes. i.e. Computing costs can track traffic,
    and more importantly, you don’t have to pay as much when traffic is low.

    Because cloud services scale up and down according to demand, they have a lot of appeal for small and medium sized business owners.

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