Five Reasons for the Cloud Computing Boom - InformationWeek
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6/22/2010
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Five Reasons for the Cloud Computing Boom

New market numbers show that cloud computing is not a fad and it's not a pipe dream. It's a bonafide IT phenomenon that points to the future of organizational computing.

New market numbers show that cloud computing is not a fad and it's not a pipe dream. It's a bonafide IT phenomenon that points to the future of organizational computing.

According to a release this week from research firm Gartner, cloud services revenue worldwide will reach $68.3 billion this year, a 16.6% increase from last year's revenue of $58.6 billion. And the industry will experience strong growth through 2014, when Gartner predicts worldwide cloud services revenue will climb to $148.8 billion.

So what has caused, is causing, this surge in interest and acceptance of cloud computing? Here are five factors that have played, are playing, a role in its skyrocket market trajectory.

** The recession. Cutbacks in IT budgets resulting from the economic slowdown called for creative ways to add new applications and business processes. As Ben Pring, research VP at Gartner, points out in the company's release: "An IT solution that can deliver functionality less expensively and with more agility (remembering that time is money) is hard to ignore against this backdrop."

** CFOs. The ability to forgo capex investments in technology made their hearts flutter.

** CIOs. Accused of dragging their feet at first, and in fact causing business managers to turn to software-as-a-service providers as an under-the-radar alternative to glacial IT processes, most CIOs have embraced at least the tactical benefits of the cloud.

** Outsourcing. The successful acceptance of outsourcing as an IT strategy set the table for cloud computing; its various iterations, in particular software-as-a-service and infrastructure-as-a-service, could be looked on as the next steps along the outsourcing road.

** Nicholas Carr. Author and lecturer Carr's notorious 2003 Harvard Business Review article, "IT Doesn't Matter" (which he subsequently turned into the book, Does IT Matter?) set forth the outlines of the cloud computing argument. The basic message, that IT should be looked on as a low-cost commodity, anathema to most CIOs, nonetheless resonated with corporate executives.

As evidence of its continuing influence, consider this quote from Gartner's Pring: "IT managers are thinking strategically about cloud service deployments; more-progressive enterprises are thinking through what their IT operations will look like in a world of increasing cloud service leverage."New market numbers show that cloud computing is not a fad and it's not a pipe dream. It's a bonafide IT phenomenon that points to the future of organizational computing.

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