Analysts: 2009 the year of the cloud

Cloud computing will become entrenched in the corporate world, with rising momentum in the Asia-Pacific region, according to research analysts.
Written by Vivian Yeo, Contributor

Cloud computing may only be a buzzword this year, but aided by the downturn, the concept will become entrenched in the corporate world come 2009, say analysts.

IT cloud services will form 25 percent of all incremental global IT spending growth by 2012, Claus Mortensen, IDC's principal for emerging technologies advisory services, said Thursday at a media event in Singapore.

Given the current economic climate, the proportion could be higher, he added. "With the economic crisis, we believe this is going to be one-third of all growth [in IT spend]," said Mortensen.

The Hong Kong-based analyst pointed out that several factors contribute to the cloud being ready for mass-market adoption. Networks are increasingly capable of supporting cloud computing, and players such as Amazon have taken advantage of this to market new capabilities. Also, traditional IT models are too slow and costly, particularly for small and midsize businesses.

An October poll in the Asia-Pacific region also found that cloud services was one of the areas that businesses expect to increase spending on, said Mortensen. In addition, the study revealed that 80 percent of companies that want to cut down on spending "don't necessarily want to buy cheaper" products and services, but instead want innovative technology that can help them drive down costs.

The growth of the cloud is one of IDC's top 10 predictions for the ICT industry in 2009, released on Friday.

Springboard Research, which also released its top 10 predictions for 2009, pointed to the rising momentum of the cloud computing movement in Asia next year. Its Asia-Pacific IT Market Predictions 2009 report released Thursday, highlighted: "Springboard Research believes that in 2009, every leading hardware, software and services vendor will have a clear cloud computing strategy.

"We expect the cloud computing ecosystem to rapidly evolve as partners--independent software vendors, system integrators, developers--increase investments in this area. Asia-Pacific will play a significant role in this regard due to the huge availability of local IT talent," the research firm said, adding that new initiatives will arise in 2009 from both traditional vendors such as IBM and Microsoft, as well as SaaS (software-as-a-service) pioneers like Salesforce.com.

The Ovum Eight report, which identifies eight of the top IT services issues that will impact IT vendors in 2009, noted that cloud computing is quickly becoming one of the most competitive IT markets. In a statement Thursday, Ovum predicted that IT services companies would tap on cloud technologies among others, to deliver new value-added services to the market, while customers are examining and evaluating the benefits applications and services delivered over the Internet bring.

Other key predictions by IDC and Springboard include:

•  Managed services and outsourcing win favor--Enterprise-wide outsourcing will grow significantly in 2009, Springboard reported. This approach is favored not only to cut costs, but also to lessen the risks associated with buying new technologies in uncertain times.

While each country in the region has a different maturity level when it comes to adoption of the enterprise-wide outsourcing model, emerging markets such as India, China, Thailand and the Philippines as well as developed economies Australia, Hong Kong, Korea and Singapore, will contribute significantly toward growth of various outsourcing services segments, said Springboard.

IDC noted that the economic slowdown will drive businesses to embrace the managed data center model. According to the analyst, there is a large untapped market as only 23 percent of organizations in the region currently outsource their data center needs.

•  Green goes mainstream--In 2009, the green momentum will shift from the more mature economies in Asia to the developing ones, according to IDC. With increased cost pressures, companies will go beyond focusing on lowering data center energy consumption, to achieving business process optimization.

Springboard said it expects more companies to directly link green IT initiatives with cost savings, targeting projects that reduce IT-related expenditures and enhance operational efficiency as well. While the current emphasis of enterprises in the Asia-Pacific region is largely on the soft targets of electricity management, server consolidation and employee education, the focus of green IT in 2009 will shift to "more holistic data center management issues, and address the fundamental question of who owns the data center and if outsourcing can improve green IT outcomes".

•  Government spend stays strong--Governments traditionally boost spending during economic downturns to stimulate demand, and Asian governments have been encouraging IT spend and/or investing on projects, said IDC's Mortensen.

Springboard also noted that across the region, administrations are pushing up public spending in infrastructure, healthcare, education, transportation, regulation and compliance, and the delivery of government services. China, it added, had announced a large stimulus package with a large focus on infrastructure. India and other countries are likely to have similar measures going forward into 2009. IT companies, said Springboard, will be one of the biggest beneficiaries of government spending as technology will be a big part of the investments in various sectors.

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