13 August 2009

Pinto’s Point

Cloud computing

By Jim Pinto

Google, Microsoft, and Amazon are the leading players in a global race.

They are building data-center capacity around the world at a pace that has not been slowed by the current economic recession. They want to be ready with enough capacity to handle two big developments that will transform the technology world over the next decade:

• Cloud computing: Applications and services, Internet delivered
• Utility computing: On-demand Internet-based server capacity

With both of these trends, the biggest target is private data centers. Cloud computing will run the big commoditized applications (mail, groupware, CRM, etc.) so IT departments do not have to run them from a private data center.

Most IT departments now pay for maximum capacity at all times, with very low utilization. If they have not planned for enough capacity at the high end, they risk downtime at peak times if their systems get overloaded.

Utility computing wants simply to take over server capacity for private services and applications. They will seamlessly scale up and scale down services so organizations only have to pay for the bandwidth and server capacity used.

About 5% of enterprises have already implemented some form of cloud computing, and this ratio will increased to 9% by 2012, more than doubling the total. Software-as-a-Service, just one segment of cloud computing, is growing at double-digit rates. According to experts, the real impact of cloud computing will be much more; “in the cloud” applications should be 25% of the net new growth in IT spending.

Watch for cloud computing to blossom in 2010.

Related links:

• Four reasons why corporate IT will embrace cloud computing:
  http://blogs.zdnet.com/BTL/?p=17024&tag=nl.e539
• Why Microsoft, Google, and Amazon are racing to run your data center:
  http://blogs.zdnet.com/BTL/?p=19733&tag=nl.e539
• Cloud computing rises to $9.6 billion in 2009, up 22%
  http://blogs.zdnet.com/BTL/?p=17662&tag=nl.e539
• InTech e-News – Software as a Service:
  http://r.listpilot.net/c/isa/44xsczk/1wbg9

Behind the byline

Jim Pinto is an industry analyst and founder of Action Instruments. You can e-mail him at jim@jimpinto.com or view his writings at www.JimPinto.com. Read the Table of Contents of his book, Pinto’s Points, at www.jimpinto.com/writings/points.html.