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Monday, December 15, 2008

Why Cloud Computing will Accelerate in 2009

The global recession will be a major factor behind every trend and development in the information technology (IT) and telecommunications markets in 2009. However, IDC predicts that the financial pressures felt by IT vendors and their customers will actually accelerate the industry transformation.

"A slow global economy will act like a pressure cooker on the IT market, speeding the development and adoption of new technologies and business models," said Frank Gens, senior vice president and chief analyst at IDC.

The reason why this will happen is simple -- the benefits offered by these disruptive offerings and models will be magnified. Suppliers and customers will migrate toward new solutions not because they are about the future, but because they offer practical benefits today.

A deep global recession and a radical industry transformation are at the core of IDC's predictions for the IT industry in 2009. With economists forecasting dramatically slowing global GDP growth, IDC predicts that global IT spending growth will slow by half or more, effectively stripping more than $35 billion of potential revenue out of the market.

To survive, it will be critically important for vendors to reorient their businesses and offerings toward market segments with above average growth. The latter will continue to include emerging markets, such as the BRIC countries (Brazil, Russia, India, and China), as well as the small and medium-sized business (SMB) sector.

Although spending will slow significantly in these markets, it will outperform the overall market. In addition, government initiatives to spur economic growth and financial stability will include outlays for new technology, making this an important market sector for the first time in many years.

At the leading edge of the ongoing industry transformation, IDC predicts that the expansion to cloud computing will accelerate as budget pressures drive users to the cloud's low costs. While spending growth will slow for various cloud services, such as software-as-a-service and cloud storage, it will outperform more traditional IT alternatives.

Vendors and service provides will scramble to announce cloud-related offerings, acquisitions, and partnerships to capture new customer spending. Similarly, Green IT will have a good year, benefiting from its ability to deliver near-term cost savings, although capital-intensive green investments will move down on many budget agendas.

The slowdown in spending will impact the telecommunications industry as well, cutting revenues in half, leading to global consolidation among the leading players, and sparking an aggressive expansion into cloud services.

Other IDC market study predictions for 2009 include:

- The online economy will benefit as ever more shoppers turn to the Internet in search of better prices and products that have become harder to find in the struggling offline economy.

- It will be a grim year for mobile gadgets as consumer spending shrinks and vendors cut prices (and margins) to capture or maintain market share.

- The business or personal divide will crumble further as the increased use of mobile technologies and Web 2.0 tools erode the distinctions between work and personal environments.

- 2009 will be a breakthrough year for information access and analysis as the next generation of Eureka 2.0 tools come to market and a new leadership battle unfolds over this last, and most strategic, patch of IT market real estate.