How BIG Is The Cloud Computing Market?

How BIG Is The Cloud Computing Market?

“A market is never saturated with a good product, but it is very quickly saturated with a bad one.”
– Henry Ford (1863-1947), American industrialist and pioneer of assembly line production.

Henry Ford, industrialist extraordinaire, knew the value of his Model T in the American market. That is why, contrary to the popular belief at that time that customers should always be provided choices, he refused to offer his now-iconic product in multiple colors, going as far as to say, “They can have it any color so long as it’s black.

Although the lack of options in the product portfolio may not have hurt Ford at a time when there were few, if any competitors, today it’s just not a feasible business strategy. Thus, for any new product, even cloud computing, offering the customer choice is of paramount importance.

TRIVIA: Henry Ford insisted on black because that’s the color that dried the quickest, thereby speeding up production.

In addition to having a good product (or service), the other thing that a business absolutely needs in order to be successful is a market that is large enough. In other words, having a great product (or service) that can be sold only to a few businesses will not ensure the provider’s success. That is possible only if there is a large market for what is being sold.

Now, I move to the other side of the table and try to determine if the service providers have a large enough market in their hands, and also, whether that is a growing market.

Going by the established names of IT that have already entered the cloud computing game, it is obvious that they see big dollars in this field. I had earlier referred to an industry report that predicted businesses in the United States will spend more than $13 billion on cloud computing and managed hosting services by 2014 as compared to $3 billion now (See: Where Is Cloud Computing Going? Up, Up And Away!).

Now, another report by technology consultant 451 Group has expressed similar optimism, with special emphasis on Amazon’s growth story in cloud computing. “In terms of market share Amazon is Coke and there isn’t yet a Pepsi,” remarked William Fellows, principal analyst of the 451 Group. Although the company has not revealed the revenue breakup from its cloud services division Amazon Web Services (AWS) in its annual report, UBS analysts estimate a figure of $500 million in 2010, and predicted to rise to $750 million in 2011 and a massive $2.5 billion in 2014. This is not far from Citigroup’s 2010 prediction of $650 million from AWS. AWS comprises Amazon’s 12 cloud computing offerings like Elastic Compute Cloud (EC2) platform, Simple Storage Service (S3) offering and others.

Jeff Bezos, CEO of Amazon, has gone on record that AWS could potentially become as big as its retail business, which last year racked up revenues in excess of $25 billion. And all this from a business scarcely four years old (See: A History of Cloud Computing.)

The second largest player in the cloud computing space, Rackspace, is also considered to have drawn in sufficient dollars last year. The 451 Group conservatively estimates that revenue from Rackspace’s cloud services was $100 million in 2010.

However, there’s still a long way to go before cloud-based products and services replace traditional IT infrastructure. As per 451 Group’s estimate, less than 10% of global IT spend is on cloud computing. However, the ratio is expected to change considerably, a lot of it due to constrained budgets post recession.

Most CEOs can see which way the wind is blowing. We see something of a perfect storm of conditions which make cloud computing interesting for them,” said Mr. Fellows from the f51 Group. “The economic crisis means companies are avoiding capital expenditure. [Cloud computing] offers them a way of avoiding capital expenditure without negatively affecting capacity, and they don’t have to provision for peak capacity.”

Therefore, we may soon hear of more providers entering the market to take a bite of the pie…

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/

Sorry, comments are closed for this post.

Recent

How M2M Differs From IoT Internet of Things

How M2M Differs From IoT Internet of Things

What Is M2M Machine To Machine? When it comes to communications between machines, the terms Machine to Machine (M2M) and the Internet of Things (IoT) are seemingly similar to each other. In fact, there is a very strong connection between both terms which is why they are often used as the same. However, that is…

Cloud Infographic – Top Vulnerable Applications

Cloud Infographic – Top Vulnerable Applications

Top Vulnerable Applications  As you use the Internet on a daily basis, you probably come across cyber security topics, but rarely glance at them twice. After all, cyber security threats don’t concern you, right? Well, that’s not exactly true. Cyber attacks are more widespread than you can imagine and they may be targeting your devices as…

The Lighter Side Of The Cloud – Whatever Happened To Alone Time?

The Lighter Side Of The Cloud – Whatever Happened To Alone Time?

By David Fletcher Are you looking to supercharge your Newsletter, Powerpoint presentation, Social media campaign or Website? Our universally recognized tech related comics can help you. Contact us for information on our commercial licensing rates.  About Latest Posts souryaSourya Biswas is a former risk analyst who has worked with several financial organizations of international repute,…

MOST RECENT - Posted by

Popular Archives

The Growth Of Rampant Digital Diseases

The Growth Of Rampant Digital Diseases

Rampant Digital Diseases Keeping ‘Rombertik’ at Bay – The New Malware that Destroys Hard-Drives A new form of malware is still on the loose, and this one takes malicious to a whole new level. Nicknamed ‘Rombertik’ by Cisco Systems, the malware attempts to infiltrate the victim’s browser to procure confidential information; fairly standard operating procedure…

Cloud Infographic – What Is The Internet of Things?

Cloud Infographic – What Is The Internet of Things?

What Is The Internet of Things? “We’re still in the first minutes of the first day of the Internet revolution.”  – Scott Cook The Internet of Things (IOT) and Smart Systems are based on the notions of Sensors, Connectivity, People and Processes. We are creating a new world to view and measure anything around us through…

Sponsors

The Many Hats Of Today’s IT Managers

The Many Hats Of Today’s IT Managers

The Many Hats of IT Managers In years past, the IT department of most large organizations was much like a version of Middle Earth: a mysterious nether world where people who seemed infinitely smarter than the rest of us bustled around, speaking and typing languages that appeared indecipherable, yet, which made our world work. They…

Selling Your Business To Your Employees

Selling Your Business To Your Employees

Mobility For Your Employees It may seem a radical notion, the idea of selling your business to the people who work for you, but this is the era in which we now work. Employees of all levels are all incredibly aware of their options when it comes to mobility and employability. This doesn’t mean that…

Technology Sponsors

hp Logo CityCloud-PoweredByOpenstack-Bluesquare_logo_100x100-01
cisco_logo_100x100 vmware citrix100
Site 24x7 200px-KPMG
Advertising ROI Plans

Established in 2009

CloudTweaks is recognized as one of the leading influencers in cloud computing, big data and internet of things (IoT) information. Our goal is to continue to build our growing information portal, by providing the best in-depth articles, interviews, event listings, whitepapers, infographics and much more.

CloudTweaks Comic Library

Advertising