Muon Cloud

Is Cloud Computing a storm in a marketing teacup or will it go the way of the last ‘next big thing’? Last week one of my fellow BCS Elite Group members posted the following question about it on LinkedIn: Is it here to stay and how big will the market become within the next 3 years?

Now, I’ve written before about the drivers for cloud computing in the credit crunch, but I haven’t backed up my words with third party numerical predictions for market penetration so I did some Googling and here is what I found:

• In a May 2008 research note entitled “The Cloud Wars: $100+ billion at stake”, Merrill Lynch analysts wrote that by 2011 the volume of cloud computing market opportunity would amount to $160bn, including $95bn in business and productivity apps (email, office, CRM, etc.) and $65bn in online advertising.
• In an October 2008 IT forecast IDC predicted that over the next five years spending on IT cloud services will grow almost threefold, reaching $42 billion by 2012 and account for 9% of revenues in five key market segments. More importantly, spending on cloud computing will accelerate throughout the forecast period, capturing 25% of IT spending growth in 2012 and nearly a third of growth the following year.

But can you ever trust what analysts predict? From past experience, no, but I think that the current bubble of interest in cloud computing will grow and last a good while, whereas the very similar ASP and SaaS marketing bubbles quickly popped and disappeared. Yes, there are strong drivers, the market conditions are in its favour and the technologies are maturing fast; but the main reason for my faith in the future of cloud computing is its name. The word ‘cloud’ stirs the imagination, conjures up mental pictures, and when customers are inspired to imagine they are more likely to change.