Cloud Computing--Redux

I know I have discussed cloud computing in this column before, but the fact is it just won’t go away. Every day I am inundated with news articles and calls from sales people telling me the cloud is where I need to be. I don’t think I ever have seen such buzz around a technology that has so little to show for itself. The latest report I saw predicts cloud computing will grow 27 percent a year for the next four years–from $370 million in 2009 to $1.2 billion in 2014. Twenty-seven percent sounds very impressive (I would be very happy with a 27 percent increase in my base pay). I would not be impressed with a 27 percent increase in the amount of money I saved this year (that would put my 2009 nest egg at about $127). I also am not blown away by $1.2 billion annual investment in the cloud by 2014. The total IT spend is estimated to be about $2.7 trillion in 2009. That means cloud computing represents 0.137 percent of the total IT spend in 2009. Not bad but not mind-boggling.

A Conundrum

There apparently is not a direct relationship between the hype about cloud computing and the actual dollars spent on it. I would like to talk a little about that disconnect and possible reasons for it. First, let’s define what we mean by “the cloud.” There are very wide ranges of offerings that define the cloud from ready-to-use Software as a Service (SaaS) offerings, such as Sales-Force.com, to bare-bones, virtualized Linux servers, ready to be configured and built out any way you want. Between those two extremes are a host of other offerings: storage as a service, database as a service, application as a service, etc. For our purposes, we will take a fairly common definition of cloud computing and define it as any IT service that is accessed in real time over the Internet. I could qualify this further by adding it is a pay-as-you-go or subscription-based IT service, but strictly speaking, that is not accurate, as many cloud offerings are free–at least for the consumer.