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Posts tagged ‘Cloud computing forecasts’

Apr 10

saas-erp-market-forecast

Making Cloud Computing Pay

Relying on cloud computing strategies to free up dollars and time that can quickly be re-invested in product and service innovation emerged as the highest priority for respondents in a recent Rackspace survey.

While cost reductions were significant, the greatest contributions were seen in investments in innovation (48%), new product & service development (45%), and boosting sale efforts (38%).

Rackspace recently commissioned a study with market research firm Vanson Bourne, who surveyed 1,300 organizations in the UK and the U.S., including 1,000 Small & Medium Enterprises (SME) and 300 enterprises with 1,000 employees or more.  The methodology included coverage of Financial Services, Retail, IT/Technology, Manufacturing, Business and Professional Services, Media, Logistics, and Mobile Telecommunications sectors, with a further small representative group from other sectors.   Rackspace also partners often with the Manchester Business School to complete qualitative research, which they also did on this project.  You can find an executive summary of the study here, Cloud Computing Research.   In February, Joe McKendrick’s post titled Cloud Computing Boosts Next Generation of Startups, Survey Shows covered the findings from this survey from a start-up standpoint.

Key take-aways from the research include the following:

  • In March, Rackspace made a subset of the results available in Microsoft Excel format, titled the Vanson Bourne Cloud Barometer Data – IT Skills.   Thank you Rachel Romoff  and the Rackspace team for responding so quickly to my request for links to the data set and insights into how the study was completed.
  • 62% of respondents state that cloud computing is enabling their organizations to invest more money back into their businesses.  Cloud computing improved profits by an average increase of 22% according to the study.  Marketing benefits most 
    significantly from cloud computing investment, as is shown in the table below. I’ve asked for clarification from Vanson Bourne with regard to sales being rolled up into the marketing figure and will update this post when I get a response.
  • Average cost reduction is 23% due to cloud computing savings on infrastructure, based on the combined results of UK and US-based respondent analysis.
  • 62% of firms have invested funds saved due to cloud computing efficiencies back into their businesses, increasing total investment by an average of 23%.  The following table from the study shows the prioritization of investments being made based on funds saved from cloud computing:
  • 56% of organizations are using open source technology as part of their cloud strategies and 86% say that using open source cloud technology boosts their business’ ability to innovate.
  • 68% say their organizations are increasing their use of open source cloud computing technology due to the lower cost of ownership (58%) and the greater stability and robustness of it as a platform (45%).
  • Manufacturers are saving $774,000 (£506K) per using cloud providers according to the study.  Presented below is a table from the Vanson Bourne study comparing industries.

Bottom line:  Using the cost and time savings from cloud computing to free up up resources for product innovation is giving these companies a long-term competitive advantage in the market.

Mar 12

Why Cloud Computing Is Slowly Winning The Trust War

Cloud computing Seeing skeptical CIOs agree to cloud-based pilots of Customer Relationship Management (CRM), Enterprise Resource Planning (ERP) and other applications is evidence of how cloud computing is slowly winning the trust war.

Further evidence can be seen from how skeptical many of these CIOs initially were, and how successful pilots led to their gradual trust.

This trust hasn’t come cheap however.

Every one of these CIOs spoken with, across a range of manufacturing companies, learned that Service Level Agreements (SLAs) aren’t sufficient to manage the areas of security, privacy and confidentiality on their own.  Cloud computing vendors have used SLAs as a means to imply security standards are met; one CIO told me he had an audit done to see if the SLA targets promised were realistic.  They weren’t and he moved on to another vendor.  That is the level of skepticism and lack of trust many CIOs initially have about the cloud today.  Add to that how much Europe doesn’t trust the cloud, and any CIO of a manufacturing or services business that has operations globally has ample reason to be skeptical about cloud computing.  The highly visible failures of Amazon, Apple, Google, Microsoft continues to fuel skepticism and distrust of cloud computing as well.

Despite these factors, cloud computing is slowing winning the trust war.  Here are the key take-aways from my conversations and visits with CIOs and their departments over the last two weeks:

  • Service Level Agreement (SLA) claims of security, privacy and confidentiality often only partially cover the unique needs of a given business – rarely all of them.  CIOs complained that the SLAs they were initially given for cloud pilots by vendors lacked any insight into their core business, how it operated, and how the cloud-based applications could contribute greater insight and intelligence.  Only after several revisions and additions of performance measurements tied to business strategies did these skeptical CIOs let the pilots go on.  Model contracts for defining privacy, for these CIOs, are also losing credibility.  These CIOs forced the issue of a highly specific privacy plan from vendors and got them.
  • For global cloud deployments, CIOs viewed the development a roadmap and plan for how to deal with transborder data flow restrictions and in-country compliance for data confidentiality, security and personal information protection as critical.  One manufacturing CIO is setting up a two-tier ERP system throughout Europe has to first define the global privacy regulations across each nation and province.  Depending on the European nation this could include defining the physical location, contents and specific configuration of every server used.  Germany has among the most intensive data protection rules and requirements, which further require intensive roadmap and plan development to stay in compliance.
  • The most skeptical CIOs run scenario tests of full data and record extractions during pilots.  This is a safeguard in case the relationship with the cloud provider goes badly, and also to make sure they can quickly get their data back and avert vendor lock-in.  As part of this many CIOs want to see proof that data deletion has worked correctly on the provider’s servers.
  • The most trustworthy cloud computing pilots quickly move beyond basic analytics including ROI to deliver expertise and knowledge specific to the clients’ business.  This is the most powerful dynamic of all in the victories cloud computing is having in the trust war.  When a cloud pilot moves beyond showing how it can automate a process – say payroll for example – and starts making contributions to the expertise and knowledge of a company, trust grows quickly.   At that point trust becomes an accelerator for cloud computing and the platform and applications become part of the IT strategy of a business.

Bottom line:  Trust is the greatest accelerator there is in cloud computing’s growing adoption, and that’s earned when cloud applications get beyond simple metrics to delivering insights and useful intelligence on secured platforms.

Thank you Cindy Jutras and Lisa Lincoln for your contributions and insights on this as well.

Additional Reading and References:

Demirkan, H., & Goul, M. (2013). Taking value-networks to the cloud services: Security services, semantics and service level agreements. Information Systems and eBusiness Management, 11(1), 51-91.

Khan, K. M., & Malluhi, Q. (2010). Establishing trust in cloud computing. IT Professional Magazine, 12(5), 20-27.

John C. Roberts, II , Wasim Al-Hamdani, Who can you trust in the cloud?: a review of security issues within cloud computing, Proceedings of the 2011 Information Security Curriculum Development Conference, p.15-19, September 30-October 01, 2011, Kennesaw, Georgia

Rodero-Merino, L., Vaquero, L. M., Caron, E., Muresan, A., & Desprez, F. (2012). Building safe PaaS clouds: A survey on security in multitenant software platforms. Computers & Security, 31(1), 96. Link: http://hal.archives-ouvertes.fr/docs/00/65/73/06/PDF/RR-7838.pdf

Feb 20

3 Comments

Demystifying Cloud Vendors

cloud-computing landscapeCutting through the hype of cloud vendors starts by evaluating how ready their Cloud Services, enabling technologies and Professional Services are to serve customers today.

That’s one of the key take-aways from a recent webinar I attended titled How Cloud Computing Changes the Vendor Landscape by David Mitchell Smith, VP and Gartner Fellow last week.  The slides are available for download here (Free for download after Gartner registration if you are not a Gartner client).

What made this webinar unique and worth mentioning is the framework that was presented for evaluating vendors.  Beginning with the well-known Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS) structure, Gartner added in a Business and Information Systems layer that includes brokerages, management and security.  This is the layer where Gartner says they are seeing enterprise clients most concentrate on emerging technologies.

The cloud vendor landscape is defined by Cloud Services, Professional Services for Consumption, Enabling Technologies and Professional Services for building and running applications.  Green designates a vendor area of emphasis, yellow are those areas serviced by partners and white areas are not addressed by the vendor’s strategy at all.

Using this framework, nine different companies were analyzed including Amazon, Google, HP, IBM, Microsoft, Oracle, Salesforce.com, SAP and VMWare.

  • Microsoft has the most ambitious cloud strategy of the nine companies profiled, and their cloud-first design initiative shows they have faith in Azure performing in the enterprise.  Microsoft Dynamics AX 2012 will first be released on Azure, then on-premise is a case in point. Microsoft is impatient  to move into a subscription model with its evolving cloud platform. Gartner’s analysis of Microsoft’s cloud strategy is shown in the following graphic.

Microsoft Cloud Strategy

  • Oracle is one of the most persistent cloud washers according to Gartner, often bending the definition of cloud computing to align with their strengths.  Their continual efforts to redefine the cloud are also designed to get their formidable customer base to upgrade to the latest generation of their applications.  Of the vendors compared they also have the greatest strength in enabling technologies, evidenced by their Exalogic and Exadata systems, Oracle Linux and Solaris operating systems.

Oracle cloud strategy

  • SAP’s cloud strategy looks to make the most of the large, highly profitable R/3 installed base while partnering with IaaS vendors to build out their cloud platform according to Gartner.  The point was made that of the vendors in the comparison, SAP prioritizes enabling technologies over owning the entire cloud stack as Oracle aspires to.

SAP Summary Chart

Bottom line: If you want to know  the truth about a given cloud vendor evaluate their Cloud Services, Professional Services track record and how well they transform enabling technologies into successful products.  The following graphic provides a summary of the vendors included in the webinar:

Summary Chart

Jan 31

1 Comment

Roundup of Cloud Computing & Enterprise Software Market Estimates and Forecasts, 2013

157989221When the CEO of a rust-belt manufacturer speaks of cloud computing as critical to his company’s business strategies for competing globally, it’s clear a fundamental shift is underway.

Nearly every manufacturing company I’ve spoken with in the last ninety days has a mobility roadmap and is also challenged to integrate existing ERP, pricing and fulfillment systems into next-generation selling platforms.

One of the most driven CEOs I’ve met in manufacturing implemented a cloud-based channel management, pricing, quoting and CRM system to manage direct sales and a large distributor network across several countries.  Manufacturers are bringing an entirely new level of pragmatism to cloud computing, quickly deflating its hype by pushing for results on the shop floor.

There’s also been an entirely new series of enterprise software and cloud computing forecasts and market estimates published.  I’ve summarized the key take-aways below:

  • Enterprise sales of ERP systems will grow to $32.9B in 2016, attaining a 6.7% CAGR in the forecast period of 2011 to 2016.   CRM is projected to be an $18.6B global market by 2016, attaining a CAGR of 9.1% from 2011 to 2016.   The fastest growing category of enterprise software will be Web Conferencing and Team, growing at a 12.4% CAGR through the forecast period.  The following graphic compares 2011 actual sales and the latest forecast for 2016 by enterprise software product category.  Source:  Gartner’s Forecast Analysis: Enterprise Application Software, Worldwide, 2011-2016, 4Q12 Update Published: 31 January 2013

Figure 1 enteprise spending

Figure 2

figure 3 cloud computing

 public cloud forecast

Forrester Wave

  • IDC is predicting Cloud Services and enablement spending will hit $60 billion, growing at 26% through the year and that over 80% of new apps will be distributed and deployed on cloud platforms.  Their predictions also are saying that 2.5% of legacy packaged enterprise apps will start migrating to clouds.  Source: Top 10 Predictions, IDC Predictions 2012: Competing for 2020 by Frank Gens. You can download a copy of the IDC Predictions here: http://cdn.idc.com/research/Predictions12/Main/downloads/IDCTOP10Predictions2012.pdf

Oct 7

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Transactions and Complex Selling: Strong Catalysts of Cloud Computing Growth

Enterprise software vendors need to challenge themselves to deliver significantly more value if the potential for cloud computing is going to be achieved .

Instead of just going for the low-end, easily customized processes within analytics, CRM, supply chain management, ERP, pricing or service, vendors need to take on the more challenging, complex hard-to-solve problems enterprises have.

As I am completing more research on personas, I’m finding what CIOs really look for in SaaS apps.  Flexibility and ease of workflow support, intuitive user interface design without sacrificing functionality, and support for analytics, business intelligence and knowledge management systems integration are all mentioned often.

Nearly all of them also mention that the existing generation SaaS applications on the sell-side, from CRM to order capture and order management aren’t taking on the more challenging areas of their strategies.  The result is the CIOs are still relying on legacy, on-premise apps in areas of their companies that are ready for change to SaaS-based applications.  Cloud platforms are taking on these more complex, challenging problem areas, yet innovation still lags the needs in the market.

Transactions Are The Fuel of Cloud Infrastructure Growth  

CIOs are focusing on how to exceed the expectations of their internal customers at the workflow and interface level while infusing SaaS apps with analytics, business intelligence and knowledge management support.  What’s missing is the killer transaction platform layer and transaction-based applications.  Gartner’s report, A Workforce Without Humans: Three Ways Technology Will Eliminate Skilled Jobs in the U.S. Through 2020 by Kenneth F. Brant by Johan Jacobs has the following graphic which shows CIO’s estimates of migration to cloud-based IT infrastructure and applications which supports this point.

Source: Maverick Research: A Workforce Without Humans: Three Ways Technology Will Eliminate Skilled Jobs in the U.S. Through 2020 by Kenneth F. Brant by Johan Jacobs

Much of the report is based on the results of Gartner’s 2011 survey of U.S. CIOs. Additional insights from the survey include the following:

  • Virtualization and cloud computing are the two top-ranked U.S. CIO technology priorities for 2011.
  • 83% of U.S. CIOs estimated that more than half of their transactions would be conducted on a cloud infrastructure by 2020.
  • 79% of the respondents predicted that more than half of their transactions would be completed on applications leased using the SaaS platform by 2020.

For cloud infrastructure platforms and SaaS applications to deliver that level of transaction volume and support, there needs to be a major shift in how enterprise vendors develop software. Making better use of analytics, business intelligence and knowledge in the enterprise is key. Designing applications that make information and knowledge sharing intuitive is critical.

The following figure from the same report cited earlier shows the relationship of technologies to potential business value.  Many CRM and sell-side vendors tend to focus on being a substitute or just barely delivering increases in human productivity.

Going after the hard work of optimizing pricing strategies, call centers, making multichannel selling strategies profitable and getting the most out of social networks to make the customer experience exceptional will deliver major gains in productivity.  It’s been my experience during the persona interviews that for any SaaS vendor to really excel here they need to get beyond human productivity and make it possible for enterprises to deliver exceptional customer experiences daily.

Creating SaaS applications that take on real complexity earns trust too, which no amount of pure efficiency can compete with.

Source: Maverick Research: A Workforce Without Humans: Three Ways Technology Will Eliminate Skilled Jobs in the U.S. Through 2020 by Kenneth F. Brant by Johan Jacobs

An Example: SaaS in Manufacturing

The following table compares the strategies and systems used in a typical manufacturing company.  Enterprise apps vendors for the most part are focused on make-to-stock and assemble-to-order automation and efficiency (SAP ByDesign for example).

As the continuums move from left to right, the process, systems and strategy challenges exponentially increase.  As a result there are only a few vendors who can manage the more complex engineer-to-order requirements in manufacturing for example. Transactions there are very small in number, yet orders of magnitude more profitable.  This is just an example of many areas in enterprises that need major improvement.

Instead of just focusing on the easy processes and strategies on the left, vendors need to go after the more difficult, complex selling and transaction challenges on the right.  This is why CIOs want SaaS applications that are easy to customize from a user interface and workflow standpoint, while at the same time supporting analytics, BI and knowledge management.  The goal is to slot them into these more challenging areas of their business and transform their company’s intelligence and expertise into profitable growth.

Bottom line: The true catalyst of cloud computing growth isn’t just SaaS economics; it’s how effectively enterprise software vendors address the very difficult transaction, order management and selling challenges their potential customers face all the time. When that happens, the many optimistic forecasts of cloud adoption in the enterprise will take a step closer to being fulfilled.

Jul 27

hypecyclefinal
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Gartner Releases Their Hype Cycle for Cloud Computing, 2011

Calling the hype around cloud computing “deafening”, Gartner released their annual hype cycle for the 34 different technologies in a 75 page analysis today.  You can find the Hype Cycle at the end of this post and I’ve provided several of the take-aways below:

  • The industry is just beyond the Peak of Inflated Expectations, and headed for the Trough of Disillusionment. The further up the Technology Trigger and Peak of Inflated Expectations curve, the greater the chaotic nature of how technologies are being positioned with widespread confusion throughout markets. The team of analysts who wrote this at Gartner share that conclusion across the many segments of the Hype Cycle.
  • Gartner states that nearly every vendor who briefs them has a cloud computing strategy yet few have shown how their strategies are cloud-centric. Cloudwashing on the part of vendors across all 34 technology areas is accelerating the entire industry into the trough of disillusionment. The report cites the Amazon Web Services outage in April, 2011 as a turning point on the hype cycle for example.
  • Gartner predicts that the most transformational technologies included in the Hype Cycle will be the following: virtualization within two years; Big Data, Cloud Advertising, Cloud Computing, Platform-as-a-Service (PaaS), and Public Cloud computing between two and five years; and Community Cloud, DevOps, Hybrid Cloud Computing and Real-time Infrastructure in five to ten years.
  • There continues to be much confusion with clients relative to hybrid computing.  Gartner’s definition is as follows ”Hybrid cloud computing refers to the combination of external public cloud computing services and internal resources (either a private cloud or traditional infrastructure, operations and applications) in a coordinated fashion to assemble a particular solution”. They provide examples of joint security and management, workload/service placement and runtime optimization, and others to further illustrate the complex nature of hybrid computing.
  • Big Data is also an area of heavy client inquiry activity that Gartner interprets as massive hype in the market. They are predicting that Big Data will reach the apex of the Peak of Inflated Expectations by 2012.  Due to the massive amount of hype surrounding this technology, they predict it will be in the Trough of Disillusionment eventually, as enterprises struggle to get the results they expect.
  • By 2015, those companies who have adopted Big Data and extreme information management (their term for this area) will begin to outperform their unprepared competitors by 20% in every available financial metric. Early use cases of Big Data are delivering measurable results and strong ROI.  The Hype Cycle did not provide any ROI figures however, which would have been interesting to see.
  • PaaS is one of the most highly hyped terms Gartner encounters on client calls, one of the most misunderstood as well, leading to a chaotic market. Gartner does not expect comprehensive PaaS offerings to be part of the mainstream market until 2015.  The point is made that there is much confusion in the market over just what PaaS is and its role in the infrastructure stack.
  • SaaS performs best for relatively simple tasks in IT-constrained organizations. Gartner warns that the initial two years may be low cost for any SaaS-based application, yet could over time be even more expensive than on-premise software.
  • Gartner estimates there are at least 3M Sales Force Automation SaaS users globally today.

Bottom line: The greater the hype, the more the analyst inquiries, and the faster a given technology ascends to the Peak of Inflated Expectations. After reading this analysis it becomes clear that vendors who strive to be accurate, precise, real and relevant are winning deals right now and transcending the hype cycle to close sales.  They may not being getting a lot of attention, but they are selling more because enterprises clearly understand their value.

Source: Gartner, Hype Cycle for Cloud Computing, 2011 David Mitchell Smith Publication Date: 27 July 2011 ID Number: G00214915 © 2011

Jun 18

Roundup of Cloud Computing and Software-as-a-Service (SaaS) Forecasts, June 2011

The gap is beginning to close between the value SaaS-based applications have the potential to deliver and what customers are achieving.

While SaaS-based software vendors are making major strides in integration, reliability, system performance and usability, it is the enterprise buyer’s skepticism and high standards forcing the market to move forward.  The latest series of market forecasts and surveys reflect greater use of actual customer results and a quickening pace of progress.

Performance-Driven Cultures and SaaS Adoption

Measuring business outcomes using industry standard and company-specific metrics typifies companies getting the best results.  A lack of clarity or confusion around strategy based goals leads to low adoption and eventual abandonment of SaaS initiates.  Sales and sales operations VPs are winning the debates against home-grown or internal system development based on speed of deployment, usability and integrated analytics of SaaS applications.  Based on the surveys and research completed this year, the best SaaS implementations are designed on a firm foundation of measurable results including quantifying risk.

Performance-driven cultures have a higher success rate with SaaS pilots, are more thorough in defining their own infrastructure (IaaS) and platforms (PaaS), and also know what success looks like from a metrics-driven standpoint.   The graphic, Performance-Driven Culture: The Metrics Continuum, shown to the left, was originally published in Gartner’s Predicts 2011: Enterprise Architecture Shifting Focus to Business Value Outcomes Report, November, 11, 2010 Philip Allega, et.al supports this point.  Please click on the graphic to expand it for easier reading.

Hype is Prolonging the Peak of Inflated Expectations

The bottom line is all really matters is measurable, repeatable performance when enterprises evaluate their SaaS strategies.  Many marketing, sales, sales operations and service VPs must defend their choice of SaaS over legacy system upgrades or internal system development.  Resistance to change and complacency in IT is slowly killing many companies who must step up and keep pace with their customers to survive. People are betting their jobs on this technology.  Many in marketing, sales and service want to know how to improve and measure business strategy performance.  That’s one of the main inflexion points in SaaS marketing today.

 The reality for enterprise users is that nothing gets purchased, no matter how wonderful the claims, unless there are strong metrics that link them back to business performance.  That’s what is deflating hype in this market faster than any other factor.  You can download the Gartner Hype Cycle for Cloud Computing 2010 from the link (no opt-in).  Please click on the graphic to download the Gartner Hype Cycle for Cloud Computing 2010.

Here are short summaries of the latest cloud computing and SaaS forecasts published recently:

  • Gartner is forecasting enterprise-based spending for Software-as-a-Service (SaaS) applications  will grow at a 16.3% compound annual growth rate through 2015. SaaS will grow at nearly double the pace of licensed enterprise applications during the forecast period.  Licensed applications will grow at a n 8.5% CAGR during the same period. The following  table, Total Software Revenue Forecast for SaaS Delivery Within the Enterprise Application Software Markets, 2007-2015 (Millions of U.S. Dollars) compares enterprise software spending by application category for the forecast period. Source: http://my.gartner.com/portal/server.pt?open=512&objID=260&mode=2&PageID=3460702&id=1728009&ref=

     Total Software Revenue Forecast for SaaS Delivery Within the Enterprise Application Software Markets, 2007-2015  (Millions of U.S. Dollars) 

     

  • The Asia-Pacific (APAC) Software as a Service (SaaS) market is expected to grow from $390M in 2008 to $4.3B in 2015, at an estimated CAGR of 41.0% from 2008 to 2015. The appeal and reach of software as a service (SaaS) continue to grow rapidly among enterprises in Asia Pacific. Australia & New Zealand (ANZ) is the largest regional SaaS market in Asia Pacific. SAAS is gaining momentum in ANZ because of the markets resemblance to the North American market with better broadband penetration, availability of applications getting delivered in SaaS mode and overall greater adoption of IT in general. Source: http://professional.wsj.com/article/TPMTPW000020110214e72e002k2.html
  • Cloud middleware systems markets at $1.5B in 2010 are forecast to reach $4.3B, worldwide by 2017.  Cloud computing middleware represents the base for development of all cloud computing infrastructure as it supports systems integration and systems self-provisioning.  Market leaders are predicted to be Akamai, IBM, Google, Microsoft, and Oracle. Source: http://wintergreenresearch.com/
  • Infonetics Research forecasts the overall managed security services market, including CPE, SaaS, and cloud services, to reach just under $17B by 2015.  SaaS and cloud-based security services are expected to make up close to half of the overall managed security services market opportunity by 2015 Worldwide SaaS revenue is forecast to grow dramatically over the next few years, with a compound annual growth rate (CAGR) of 23% from 2010 to 2015.  Source: WSJ Journal 
  • Cloud service adoption is up 61% from 2010 and 45% of multinational corporations (MNCs) already use cloud sourcing for at least some elements of key IT services.  Cable & Wireless and Ovum partnered to create this white paper, full of excellent insights and research data: http://www.cw.com/assets/content/pdfs/resource/ovum-cloud-wp.pdf
  • 60 percent of companies worldwide said cloud computing is a top IT priority for the next year, the sentiment is even higher in the C-suite with three in four (75 percent) C-level executives reporting cloud computing as top of mind.  According to an Avanade Research and Insights’ Global Survey: Has Cloud Computing Matured? Third Annual Report, June 2011, there is also significant purchasing of cloud services without the IT department’s knowledge, with nearly 20% of all purchases never reviewed with the CIO. Source: Avanade Research Report  
  • By 2014, cloud computing services will grow to a $45B industry a year (IDC) and SaaS to grow at 21% CAGR to touch $17.6B.  Microsoft recently published the following presentation, Grow Your Business with Cloud – Are You Ready?  You can download a copy of the presentation by clicking on the presentation to the right.
  • The global cloud computing market is expected to grow from $37.8B in 2010 to $121.1 B in 2015 at a  CAGR of 26.2% from 2010 to 2015 according to Yankee Group. SaaS is the largest segment of the cloud computing services market, accounting  as it did for 73% of the market’s revenues in 2010. The IaaS and PaaS markets are still at a nascent stage and  currently hold a small share of the Cloud computing services market. However, these are expected to witness  moderate growth due to their flexibility and cost effectiveness.Source: CSS Corp. Analysis.
  • Project and Portfolio Management (PPM) software emerged in 2009 as a fast-growing market for SaaS, with a compound annual growth rate (CAGR) of more than 40% projected for the next five years according to Gartner. PPM software consumption environments are changing radically, with hosted and SaaS options — as a result, most traditional on-premises vendors are forced to provide SaaS alternatives to counter new entrants and SaaS-only PPM vendors.  Source:  Competitive Landscape: SaaS Project and Portfolio Management Software, Worldwide, 2011 published 6 April 2011.

Jun 14

15 Comments

Infographic of Cloud Computing Outlook 2011

Today Cloud.com, Zenoss and BitNami released the results of a recent survey to determine the key IT objectives and obstacles to cloud adoption.  The survey respondent base consisted of the development communities from BitNami, CloudStack and Zenoss Core, all open source projects, and included more than 500 IT professionals.  For an analysis of the results see Cloud Computing Survey Finds Scalability and Cost Savings Driving Cloud Adoption on CloudTweaks.com.  The following Infographic is based on the survey results.

Jun 1

2 Comments

Sizing the Public Cloud Computing Market

Forecasting the global public cloud market is growing from $25.5B in 2011 to $159.3B in 2020 in the report Sizing the Cloud, Understanding And Quantifying the Future of Cloud Computing  (April, 2011), Forrester Research has taken on the ambitious task of forecasting each subsegment of their cloud taxonomy.   Forrester defines the public cloud as IT resources that are delivered as services via the public Internet in a standardized, self-service and pay-per-use way.   The aggregate results of their forecasts are shown in the attached graphic.

The forecast range is from 2008 to 2020 and I’ve included several of the highlights from the study below:

  • Forrester breaks out Business Process-as-a-Service (BPaaS) in their public cloud taxonomy, not aggregating this area of cloud computing into IaaS or PaaS.  This is unique as other research firms have not broken out this component in their cloud market taxonomies, choosing to include Business Process Management (BPM) as part of either infrastructure-as-a-service (IaaS) or platform-as-a-service (PaaS) subsegments.  Forrester is predicting this category will grow from $800M in 2012 to $10.02B in 2020.
  • SaaS is quickly becoming a catalyst of PaaS and IaaS growth, growing from $33B in 2012 to $132.5B in 2020, representing 26% of the total packaged software market by 2016.  Forrester is predicting that SaaS will also be the primary innovative force in public cloud adoption, creating applications that can be tailored at the user level.  Forrester is bullish on public cloud growth overall, and their optimistic outlook can be attributed to the assumption of cloud-based applications being configurable at the user level, with little to no enterprise-wide customization required.
  • PaaS is forecasted to grow from $2.08B in 2012 to $11.91B in 2020.  Forrester is defining PaaS as a complete preintegrated platform used for the development and operations of general purpose business applications.  The research firm sees the primary growth catalyst of PaaS being corporate application development beginning this year.  By the end of the forecast period, 2020, up to 15% of all corporate application development will be on this platform according to the report findings.
  • IaaS will experience rapid commoditization during the forecast period, declining after 2014.  Forrester reports that this is the second-largest public cloud subsegment today globally, valued at $2.9B, projected to grow to $5.85B by 2015.  After that point in the forecast, Forester predicts consolidation and commoditization in the market, leading to a forecast of $4.7B in 2020.

Jul 19

5 Comments

Sizing the Cloud Computing Market

The pace of cloud computing market forecasts produced and announced is quickening, with several new projections announced this month. In every one of these forecasts, the benefits of operating expense (OPEX) versus capital expense (CAPEX) financing play a role, as does the emerging trust in cloud computing as a viable platform.

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