As the saying goes…just follow the money. That was IDC’s point in its latest update of the “Public IT Cloud Services” forecast. Looking to predict cloud-related expenditures through 2015, the company says the industry will balloon to nearly $73 billion from just over $20 billion by the end of 2010. The math works out to cloud services accounting for an astounding “46% of net-new growth” in overall IT product spending over the next five years. That means a lot of companies will likely be shifting budgets over to what they consider “cloud-related” as is the case of the US federal IT department, who is planning to divert some $20 billion of its $80 billion annual budget into the cloud.
That plan was laid out under the direction of CIO Vivek Kundra, of course. Unfortunately, Mr. Kundra won’t be at the helm to see its implementation, if it occurs at all. He also won’t be there to hear the fruits of the Cloud2 Commission labor that Brocade CTO, Dave Stevens remarked about in this recent blog.
Vivek Kundra with Brocade CEO Mike Klayko and CTO Dave Stevens
I’m not sure if Harvard University is going to provide him the go-go atmosphere he seemed to crave, but I wish him the best. I do know one thing. He’d wholly agree with and endorse these bullish summary statements and market forecasts IDC makes about the cloud through 2015 in the report:
- Public IT cloud services will grow at almost four times the rate of the IT market as a whole. Worldwide revenue from public IT cloud services exceeded $21.5 billion in 2010 and will reach $72.9 billion in 2015, representing a compound annual growth rate (CAGR) of 27.6%. This rapid growth rate is over four times the projected growth for the worldwide IT market as a whole (6.7%). By 2015, one of every seven dollars spent on packaged software, server, and storage offerings will be through the public cloud model.
- The cloud is about much more than the cloud. Cloud cannot be sufficiently understood as a standalone phenomenon in the IT market, but rather as a core ingredient of a larger transformation of the IT industry — and many other industries using IT to transform themselves. Other ingredients enabled by cloud — and, in turn, accelerating cloud adoption — include the expanding “species” of mobile devices, the explosion of mobile apps, the growing availability of wireless broadband, and the explosion of big data tools.
- Software-oriented cloud services (SaaS) account for 77.2%of spending. This includes all three software-oriented cloud categories — not just applications. Hardware-oriented cloud services (server and storage clouds) account for 22.8% of spending, which includes a significant portion of spending by SaaS providers on cloud infrastructure from other providers.
- Regional adoption will shift strongly offshore. The U.S. share of spending will shrink by almost 18 points, with the largest growth areas being Asia/Pacific (excluding Japan) (APEJ) and Western Europe, both with shares up by 7 points.
In fact, IDC goes as far as to declare the cloud as the official “Third Platform” for growth in IT, building on the growth of the mainframe and client/server eras. The difference, says IDC, is that cloud-related growth will be in the order of 1000s to 10,000s greater in terms of the number of users, devices and applications versus mainframes, client/server.
A tad bit exuberant perhaps, but none more so than Steve Jobs framed discussion during the launch of Apple’s iCloud. And as if to place an exclamation point on the topic, there was this: Apple now worth more than Wintel combined.
Nuts, I knew I should have plunked down some change on AAPL when I had the chance!