Future for Cloud Computing Looks Good, Report Says

Cloud computing will continue to gain acceptance, despite concerns around such issues as security, availability and functionality, according to research company iSuppli.

iSuppli analysts, in a report issued April 3, said as dynamic, user-generated content becomes more commonplace on the Internet, the acceptance of cloud computing will grow along with it.

To iSuppli, cloud computing describes an environment where applications and services can be accessed via the Web from multiple devices—such as PCs, mobile phones and video game consoles—anywhere in the world.

However, despite the expected wide acceptance for cloud computing, the future for cloud storage is less bright, iSuppli said.

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Cloud storage is attractive to small and midsize businesses as a way of maintaining adequate storage capacity and backup, and also to businesspeople who spend a lot of time on the road and need a way to share common files over the Internet and work collaboratively with colleagues. However, there are trends in the market that indicate that the demand for cloud storage may wane.

The recession is driving down the "available amount of excess capacity in data centers that could be leased out for use as cloud storage," iSuppli analyst Krishna Chander said in a statement.

iSuppli analysts also said Hewlett-Packard and Yahoo are reportedly looking to get out of the online storage market, though Google may move into it with its GDrive technology.

Another trend is the proliferation of external hard drives that offer as much as 2TB of capacity, sold through retailers at attractive prices.

iSuppli analysts said while the cloud storage market—which was at about $487 million in 2008—is expected to reach $5.8 billion in 2013, the possible adoption of external storage devices could cut that projected amount in half.

iSuppli isn't the only one to see a bright future for cloud computing. Research company IDC in March predicted that IT spending worldwide on cloud computing services would reach $42 billion by 2012, given that it offers businesses that are aggressively searching for ways to cut costs a cheaper way to acquire and use technology.

Vendors also are working to figure out how the trend toward cloud computing will play out. In a blog post April 6, Alan Priestley, a strategic marketing manager with Intel, cited a presentation by a SAP official in February that speculated that cloud computing could evolve into a model similar to the airline industry, based less on energy consumption and more on how enterprises buy cloud services.

Priestley pointed to a presentation by Wolfgang Krips, vice president of SAP Managed Services, at the VMware EMEA event, in which Krips pointed out that airlines price tickets depending on factors such as routing and time of day, offer a range of service levels, and sell tickets through different avenues, including directly from airlines or through a portal.

In cloud computing environments, pricing may depend on SLAs (service-level agreements), portals already are cropping up to act as brokers to sell capacity and data centers may start selling off excess capacity at discounted rates.

"Definitely food for thought as to what the future of cloud computing will bring and how IT might interact with the various providers on the market place," Priestley wrote in his blog.