Cloud's not just hype; spending to grow three fold

KUALA LUMPUR, MALAYSIA: According to IDC, worldwide IT spending on cloud services will grow almost threefold, reaching $42 billion, by 2012. As the cloud computing model offers a much cheaper way for businesses to acquire and use IT, IDC expects its adoption to be amplified by the cost-cutting mantra of most organisations today.

In a recent IDC survey conducted with 696 IT executives and CIOs across Asia/Pacific excluding Japan (APEJ) to gather their views, understanding, current usage and planned usage of cloud computing, it was found that 11 percent of the respondents are already using cloud-based solutions. A further 41 percent of the respondents indicated that they are either evaluating cloud solutions for use in their businesses, or already piloting cloud solutions.

When asked about their opinion of the current state of cloud computing, 17 percent of the respondents stated that although cloud computing is very promising, there are currently not enough services available to make it compelling. (See Figure 1)

Figure 1: What is your opinion of the current state of clouding computing? (N=696 IT executives and CIOs in APEJ, January 2009)

Patrick Chan, chief technology advisor, emerging technologies, IDC Asia/Pacific, says: "Future uptake of cloud computing looks strong. Over the next three years, as the use of cloud services expand from the domain of early adopters to that of the early majority, it becomes critical for IT vendors to develop strong cloud offerings, and play a leadership role in aligning their new cloud products and services with their organisation, their traditional offerings, partner ecosystem, and customer and market requirements. IT vendors who fail seriously to contend for a leadership role will be left with a minority share of the lucrative pie."

For IT vendors to be successful in the cloud market, they will have to address users’ cost concerns. The survey also revealed that more than 50 percent of the respondents indicated cost cutting as the key driver behind the adoption of cloud computing. (See Figure 2)

Figure 2: What drove your organisation towards using or considering cloud services? (N=696 IT executives and CIOs in APEJ, January 2009)

However, it is also important to note that supplying low-cost services alone will not guarantee success, as users are also indicating that any cloud solution they buy must offer competitive pricing, offer service level agreement (SLAs) and offer complete solutions.

"Some IT vendors are well positioned to do this but others who are focused on a single solution will need to build strong partner ecosystems to bring broad solutions to their customers. The time to do that is now, as our survey respondents have indicated that in three years time, their use of cloud-based services will be very different as compared to what we see today" added Patrick. (See Figure 3)

Figure 3: How important is it to your organization that a cloud services supplier or vendor have the following characteristics? (N=696 IT executives and CIOs in APEJ, January 2009)