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A must-read investor's guide to cloud computing innovations

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Part 8
A must-read investor's guide to cloud computing innovations PART 8 OF 8

Is cloud computing changing the face of the IT industry?

The future and the cloud

Cloud infrastructure is still in a nascent stage. It reels under security and data privacy problems, regulatory and compliance issues, and its integration with existing arrangements.

Cloud service providers continuously broaden their portfolio of services to deal with these issues. So they serve as an extension of the enterprise IT space as well as providing infrastructure for startups.

Is cloud computing changing the face of the IT industry?

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The chart above shows that worldwide public cloud services spending is expected to reach $108 billion by 2017. Enterprises seem to be shifting their focus from cost savings to innovation.

Outlook

Companies’ adoption of SaaS and cloud models is expected to give more visibility to their revenue generation because of the recurring revenues associated with these models.

IBM (IBM) and HP (HPQ) have invested and plan to invest billions of dollars in the cloud space to benefit from this rapid-growth technology. But it isn’t easy to get a piece of cloud computing with Amazon (AMZN) holding the leadership position. Microsoft (MSFT), with its Azure product, is emerging as a big player—with more than 1,000 customers joining every day and plans to double its capacity every six to nine months. Google (GOOG) competes in prices.

All these activities give you a glimpse of the dynamic and competitive forces in the cloud market that will ultimately benefit the industry.

Opportunity

The vast majority of servers are still managed in-house. This presents a significant opportunity and a catalyst for change in the traditional IT business model.

In the present scenario and going forward, organizations are reeling under margin pressures. They’re forced to look for ways to limit costs while enhancing output. Cloud computing, with its standard and customized offerings, has enabled IT to reduce its capital footprint. It’s remodeling the traditional IT industry.

Organizations are still uneasy about the data and security issues facing the cloud. But it’s not like the cloud is the only space plagued with security concerns. Every IT system faces security issues that meet with software updates and security specialists. So the sooner the cloud finds a solution to these issues, the faster it will change the existing IT landscape.

Cloud computing is therefore considered a disruptive technology that will change the information technology business.

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