New data from IDC's Cloud Services Forecast shows that cloud services will outpace traditional IT spending over the next five years and will represent $44.2 billion, or roughly 10 percent, of all IT spending by 2013.
However, the missing link in this data set is that these numbers account only for IDC's cloud services taxonomy (Application Software, Application Development and Deployment Software, Systems Infrastructure Software, and Server and Disk Storage capacity) and don't represent private clouds.
Private clouds--or at least internal enterprise applications that use the same principles--will undoubtedly become a major trend over the next five years. In addition to the cost savings of using existing compute power, the ease of use of cloud APIs will work their way into the enterprise quickly, now that developers are comfortable with public cloud services like Amazon S3 and EC2.
If public cloud services will be 10 percent of all IT money spent, that represents a blisteringly fast growth rate. And while we certainly don't wish the recession to continue, it's interesting to see how companies have adapted their IT plans to take advantage of services that require far less capital expenditure. From IDC:
The five-year growth outlook remains strong, with a five-year annual growth rate of 26 percent--over six times the rate of traditional IT offerings. In spite of the challenging economy--or more accurately, because of it--this growth rate advantage expanded from last year's forecast, in which cloud services were forecast to grow at over five times traditional offerings.
There is no question that cloud services are in their infancy and that the market is ripe for further disruption. The challenge going forward will be to accurately measure just what applications and services are internal, external, cloud, or otherwise.
In the meantime, let's all just be glad to see IT spending on the rise.
Matt Lawton, director of Open Source Software Business Strategies at IDC, sent me over some details from its latest report on Open Source. I have a few of the details below, and Matt really wanted me to remind everyone that open-source software is being used in so many more ways than straight standalone commercial product deployments and that the standalone $1.73 billion for 2007 is just one component.
The market for standalone open-source software (OSS) continues to be in a significant growth stage. This IDC study outlines the evolution of worldwide revenue from standalone OSS and presents IDC's preliminary 2008--2012 forecast. Some of the highlights from this study are as follows:
--IDC expects worldwide revenue from standalone OSS to grow at a 23 percent compound annual growth rate (CAGR) to reach $4.83 billion by 2012.
--Worldwide revenue from standalone OSS in 2007 was $1.73 billion.
This forecast is characterized by two different components: revenue from new OSS projects growing at 32 percent CAGR over the forecast period, and revenue associated with a single OSS project (OpenSolaris) that is based on a formerly proprietary software product with a substantial revenue stream but lower growth profile.
Revenue from standalone OSS is an important but small indicator of the commercial impact of OSS. Large vendors are realizing significant revenues indirectly from their activities with and support of OSS. In addition, as unpaid OSS adoption extends from a development environment to production deployments, vendors of competitive proprietary software will feel the impact on their revenues.
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