After many years of hype, market watchers report that cloud computing, which sees organisations buy services delivered by providers over the internet, cloud is finally entering the corporate mainstream.
Ben Pring, research vice president at Gartner, said: "The scale of application deployments is growing; multi-thousand-seat deals are increasingly common. 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. This was highly unusual a year ago."
The term cloud computing refers to both the client-side applications delivered as services and the underpinning back-end data centre infrastructure. As such it includes Software as a Service (SaaS), Platform as a Service (PaaS) where the underlying platform and software stack is delivered, and Infrastructure as a Service (IaaS).
Renub Research's report, Cloud Computing - SaaS, PaaS, IaaS Market, Mobile Cloud Computing, M&A, Investments, and Future Forecast, Worldwide, noted that providers including Amazon, Salesforce.com, IBM, Oracle, Google and Microsoft are all offering cloud services.
It predicted: "The worldwide cloud computing market is continuing to grow at a rapid rate and it is expected to cross $25bn (£15.8bn) by the end of 2013. The different segments of the Cloud Computing market (SaaS, PaaS, IaaS) show different maturities and adoption levels. The various segments within the SaaS market will grow at a different rate."
According to the study, the fastest growing segments in SaaS are Content, Communications and Collaboration, Customer Relationship Management, Enterprise Resource Planning and Supply Chain Management. PaaS generates market revenue of approximately 1.5 per cent of the total application development market in the year 2008. IaaS is increasingly becoming popular with computing resources integrating as web services.
Gartner believes that cloud computing is ushering in an evolution of business that will be "no less influential than the era of e-business", though it does go on to caution that this impact will have both positive and negative elements.
Stephen Prentice, vice president and Gartner fellow, said: "Overall, there are very real trends toward cloud platforms and also toward massively scalable processing. Virtualization, service orientation and the internet have converged to sponsor a phenomenon that enables individuals and businesses to choose how they'll acquire or deliver IT services, with reduced emphasis on the constraints of traditional software and hardware licensing models."
This view was echoed by David King, CTO at Logica UK: "We're shifting into an era of renting IT, where organisations pay for technology as they use it, as opposed to buying it up-front. That's a big change for the industry, and we'll see the cloud being a major influence for the next decade of IT."
Dr Nichol Riggott, IBM UK's consultancy lead for Integrated Technology Services in Public Sector, pointed to the results from the October 2010 IBM Tech Trends survey, which showed that 91 per cent of respondents anticipate cloud computing will overtake on-premise computing as the primary way organisations acquire IT over the next five years.
However, Mark Taylor, director of developer and platform evangelism, Microsoft UK cautioned: "It is important therefore that organisations which look to put their information in the cloud ensure they meet key information security standards and implement different layers of security to safeguard themselves. Businesses must understand their needs with respect to security, data privacy, compliance and risk management, and identity and access control, since these can all prove to be issues."
As the momentum behind cloud computing gains pace Logica's King urges CIOs to think carefully before jumping on the bandwagon: "Cloud will no doubt be a component that brings benefit to a broad range of organisations, but it's important that businesses do not try and take a one-size-fits-all approach."
By focusing on its own IT challenges and thinking about the best fit for people within the business, CIOs can define the appropriate transformation roadmap and governance model for their move into the cloud."