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1/30/2009
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10 Cloud Computing Predictions

Vendors are rushing to join Amazon, EMC/VMware, IBM, Google, Microsoft, and Salesforce in the cloud, offering businesses new ways to do more with less.

The cloud computing market arrived in a big way in 2008, with Amazon, EMC/VMware, IBM, Google, Microsoft, Salesforce.com, and a dozen other vendors introducing products for on-demand, pay-as-you-go computing. What's next? My predictions for 2009:

1
The Cloud Market Grows
Cloud computing growth will exceed 20%. It's an educated guess, not the result of market research, but the main point is the cloud will grow at a healthy clip while enterprise software, hardware, and other IT segments struggle to grow at all. Amazon's nonretail business, which includes Amazon Web Services, grew 45% in the third quarter of 2008, and Salesforce's fiscal third-quarter revenue climbed 43%. Cloud services will appeal to budget-restrained IT departments.

2
Google Remains In A Niche
Google App Engine is an interesting alternative for developers building and deploying Web applications, but it will appeal mainly to startups, Web 2.0 companies, and small businesses. Google Docs (software as a service) and Google App Engine (platform as a service) will win over big companies, but not for the foreseeable future.

3
More Outages, Less Disruption
When Amazon's Simple Storage Service crashed for two hours in February, then for eight hours in July, S3-based Web applications also went down. As more companies sign up for cloud services this year, two things will happen. First, the added workload will cause more cloud failures. And second, cloud users will be better prepared with backup and recovery plans.

4
Big Companies Embrace It
Cloud computing has been popular mostly among smaller companies, but large user organizations will shed their inhibitions and adopt cloud services more aggressively this year. Why? Because they can. Enterprise-class management tools, data-integration technologies, and other prerequisites are becoming available. The promise of cost savings and the ease of subscription-style pricing also will fuel adoption among larger companies.

5
Microsoft Keeps 'Em Waiting
If 2008 was the year Microsoft raised the curtain on its cloud computing strategy, 2009 will be the year it begins to deliver. But don't expect too much. Its Windows Azure cloud operating system and related Azure Platform Services are still in development. We may see some Azure services in the second half of 2009, but 2010 is more realistic for general availability.

6
Cloud Startups Thrive
Cloud management vendor RightScale recently closed a $13 million second round of funding. Venture capital may be drying up around Silicon Valley, but cloud computing startups will be an exception.

7
Real Management Tools Emerge
It may seem like Amazon's Elastic Compute Cloud is the granddaddy of cloud services, but EC2 only became generally available a few months ago, after a long test cycle. Now EC2 management tools are much needed. Amazon has promised EC2 management, monitoring, load-balancing, and auto-scaling tools in early 2009. IBM plans to add cloud management to Tivoli Service Request Manager, Provisioning Manager, and monitoring products. There will be more such examples.

8
We See Public-Private Clouds
IT departments will create public-private hybrid clouds. They'll use virtualization, APIs, and platforms such as Elastra's Cloud Server to devise cloud-like environments in their own data centers that work seamlessly with public cloud services. Work is under way to create a "wrapper" around Google App Engine that lets users deploy App Engine on their own servers.

9
Data Security Worries Return
I keep hearing IT pros are growing comfortable with cloud service providers' data security, that it's as good or better than what most IT departments can provide. Maybe, but it will only take one data breach before the flaw in that argument gets exposed--that consumers and regulators have yet to be convinced the cloud is a secure place for personal data.

10
Oracle Joins The Cloud
Larry Ellison loves to bad-mouth cloud computing, but Oracle's CEO also keeps rolling out cloud-like options. Having watched Salesforce thrive with SaaS, he no doubt sees it and other vendors raise the stakes with platforms as a service that give developers everything to build and run applications in the cloud. And Oracle's database is now available on Amazon's EC2. The obvious next steps: virtual databases and build-it, run-it Web applications, hosted by Oracle.

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