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Cloud-adoption To Drive IT Products and Services Market in 2011, Report

Cloud-adoption To Drive IT Products and Services Market in 2011, Report

The public sector in the United States will spend less on IT products and services in 2011 while private sector enterprises are expected to purchase more IT products, a report by Business Monitor International (BMI) revealed. Cloud computing will drive the demand for such products and services with both private and public organizations looking for cloud-based solutions to benefit from cost-saving advantages offered by the Cloud.

The US market for IT products and services is forecast to expand to $653 billion by 2015 after sales dropped in last quarter of 2010. However, the growing demand for Software-as-a-Service (SaaS) and Infrastructure-as-a-Service (IaaS) will boost sales in 2011 and cloud computing will be a major market driving force in short-run, the report said. Local and federal government agencies introduced cloud strategies that will benefit providers of such services and the entire IT market while the federal government already introduced a detailed cloud adoption strategy.

Federal agencies like the US General Services Administration (GSA) have started to move email and other resources to the Cloud, paving the way for a major move to cloud computing at government level. In the past, federal government cautiously adopted such solutions due to security concerns. On the other hand, recent service breaches like those experienced by Amazon and other leading cloud services providers raised new security and reliability concerns that might affect the overall market development.

Salesforce retained its position as a leading and fast developing SaaS provider, adding 20,000 new customers in 2010, according to the report. Microsoft also witnessed a steady growth of its SaaS offerings with a number of public agencies selecting the company’s software solutions for their everyday work process.

The US software market is forecast to reach $154.6 billion in 2011, while growth is estimated to average 6 percent a year in 2011-2015, the report said. Demand for cloud-based solutions will drive the software market after a growing number of enterprises move to the Cloud or plan to adopt cloud computing solutions within their organizations. Recent surveys revealed that a prevailing number of business owners and managers plan to deploy cloud solutions to decrease costs. The lack of experienced cloud-adoption specialists, however, slows down the process, experts believe.

Notebooks account for over 60 percent of overall PC sales in 2001, according to the report, with smarthphones and tablets also gaining momentum rapidly. A total of 78 million PC units are expected to be shipped across the United States in 2010 but customers are spending less on new PCs, according to BMI experts.

The US IT services market is forecast to add 6 percent to $247.6 billion in 2001 while IT services is expected to be the fastest-growing market segment. Economic recovery and improving fundamentals related to overall state of the economy signal a new trend of growing IT services sales while hardware segment is expected to remain more calm.

Overall, cloud adoption by public and private organizations will drive the market in 2011 with providers competing for contracts by federal and local government agencies that are gradually deploying cloud-based solutions. The growing market for cloud products and services is expected to additionally support the present trend for emergence of relatively high number of cloud start-ups in the US. Most such start-ups focus on SaaS and Platform-as-a-Service (PaaS) segments, providing innovative solutions to compete with established market players like Amazon, Salesforce, Microsoft and Google.

By Kiril Kirilov

Kiril Kirilov

Kiril V. Kirilov is covering IT and business and finance topics as a full-time journalist and freelance writer for over two decades. He also deals with all things content strategy and content marketing.

Kiril analyses all business and new technology trends across the tech industry. He is also founder of a content strategy service.