Cloud computing will not only propel enterprise IT to greater efficiency in the coming years, it will help boost the world economy by increasing revenues of cloud technology and service providers while encouraging innovative startups.
That's one of the highlights of research from Gartner Inc. set to be released today. In an interview with Bloomberg Television's Erik Schatzker this morning, Gartner SVP Peter Sondergaard said he expects cloud computing to consume 19 percent of enterprise budgets annually over the next five years. In contrast, spending on public clouds comprised just 3 percent of enterprise budgets in 2010.
Overall, annual cloud spending is expected by Gartner to grow five times faster than overall IT budgets worldwide -- a figure expected to hit 3.9 percent next year, contrasted with an expected 5.9 percent growth rate for IT budgets in 2011.
Sondergaard says the reduction in growth for IT spending this year can be attributed to less spending on PCs and devices, along with currency fluctuations that affect revenue rates. In Western Europe and Japan, for instance, macroeconomic factors are not only affecting IT spending, but their impact on local currencies could make growth rates negative in those regions.
Still, the general trend in IT spending is up -- and set to outstrip spending in other enterprise areas. Based on Gartner's research, cloud computing, along with mobility, social media, and information management, will result in IT purchases growing by almost 10 percent between 2010 and 2012.
Table 1: Enterprise IT Spending
Gartner also maintains that the effects of cloud computing make any IT spending reductions deceptive, since clouds eliminate the need for capital expenditures on in-house hardware, software, and services. "Part of the slowdown is actually beneficial for business," Sondergaard told Bloomberg today. "It makes the use of information technology more effective."
None of this is surprising. Indeed, research firm IDC predicts that clouds -- specifically, public cloud services -- will account for 46 percent of IT spending by 2015.
Another firm, iSuppli Corp. , predicts that spending on public cloud services will hit $110 billion in 2015. iSuppli says public cloud spending is already up 50 percent over last year and should hit $35 billion by year end.
Note too that all these figures pertain to public cloud services. Some sources anticipate private cloud growth will be much higher.
The picture emerging is one of a "cloudburst" that will drive innovation and revenue in other areas, such as wireless gear, servers, and virtualization products. Cloud computing won't save the economies dependent on IT spending, but it sure will help.
— Mary Jander , ThinkerNet Editor, Internet Evolution