September 12, 2012

Enterprise And Individual Users To Fuel Growth In Cloud Computing

Enid Burns for — Your Universe Online

Worldwide spending on cloud services is set to take off. According to a report, "Worldwide and Regional Public IT Cloud Services 2012-2016 Forecast" released by IDC this week, cloud services will see as much as 41% growth over the next four years.

Spending on IT cloud services worldwide will exceed 40 billion this year and will edge toward $100 billion by 2016. The report states that between 2012 and 2016, public IT cloud services will observe a compound annual growth rate of 26.4%. That's five times the IT industry overall.

"The IT industry is in the midst of an important transformative period as companies invest in the technologies that will drive growth and innovation over the next two to three decades," said Frank Gens, senior vice president and chief analyst at IDC, in a statement on the report. "By the end of the decade, IDC expects at least 80% of the industry's growth, and enterprises' highest-value leverage of IT, will be driven by cloud services and other 3rd Platform technologies."

IT cloud services will account for 16% of IT revenue by 2016. Five key technology categories for the cloud include applications, system infrastructure software, platform as a service (PaaS), servers and basic storage. Advancing these key categories is essential for cloud services. "Quite simply, vendor failure in cloud services will mean stagnation," Gens said.

While software as a service (SaaS) technologies, a service that combines applications as a service and system infrastructure software, have been around for several years, the evolution of SaaS is important in this area. The report forecasts that SaaS will comprise the largest share of public IT cloud services spending over the next five years. Following SaaS, basic storage and platform as a service will grow at a faster rate. Development in those categories will be crucial in building momentum for cloud service adoption.

A breakdown of geography shows that the United States will remain the largest public service cloud market. Western Europe and Asia/Pacific, excluding Japan, will follow closely. Emerging markets will represent the largest growth for public cloud services.

Cloud service offerings are emerging as an alternative to hardware. Businesses and consumers can purchase cloud storage space to perform back-ups and access files from any device in any location. Companies including Microsoft are moving to offer more of their services through the cloud. Microsoft recently introduced the new Outlook email - a reboot of its web-based email platforms such as Hotmail, and - and created the email as a cloud service. An advantage of the service is that attachments are delivered through the cloud, and therefore aren't subject to size limits that traditional email accounts must conform to when sending larger files.

Businesses are relying more and more on cloud services. The cloud allows companies to distribute their workforce more easily. It also allows for more services to be handled in the cloud, which alleviates the need for constant hardware upgrades.