Cloud computing suppresses sales of traditional hardware and software

Ed Anderson, a cloud computing analyst at Gartner, said that enterprise spending on cloud computing is growing rapidly, even faster than overall IT spending, which undoubtedly poses challenges for traditional hardware and software vendors.

In 2012, cloud computing is expected to grow by 19%, with a total market value of $109 billion, compared to just $91 billion last year. According to Anderson's latest survey, by 2016, cloud computing will develop into a $207 billion industry. In contrast, the global overall IT market is expected to grow by only 3%. Although the $109 billion cloud computing market represents only 3% of the global $3.6 trillion IT market, Anderson said cloud computing still has primary responsibility for the decline in traditional enterprise hardware and software sales.

Software delivery is shifting from a traditional license to install applications within the enterprise to a cloud-based software-as-a-service (SaaS) model. At the same time, the internal capital expenditure of hardware authentic enterprises is transformed into operating expenses outside the enterprise.

In the long run, the cloud computing model will create new opportunities for IT spending. As cloud deployments increase, integration, customization, hybrid cloud, and intra-enterprise cloud installations become more important. He said: "There may be some short-term declines, but in the long run, the overall trend is growth."

In Gartner's latest quarterly IT expense report, the research company first used cloud computing as a separate forecasting category, providing an in-depth analysis of current and future cloud computing spending trends. In the coming year, the most popular growth in the cloud computing market will be Infrastructure as a Service (IaaS), which is expected to grow by 41%. Management and security are the second most popular growth areas, with an expected growth of 27.2%, platform-as-a-service growth of 26.6%, SaaS growth of 17.4%, and business process-as-a-service growth of 15%. “The market is growing at a rapid rate,” Anderson said. “The cloud services in the broader IT market are not very large, but from a growth rate, the outlook is very bright.”

At the same time, computing hardware sales are expected to grow only 3.4% to $420 billion, compared with 7.4% last year. Enterprise software is expected to grow 4.3% this year to reach $281 billion after experiencing a 9.8% growth last year.

Anderson's predictions for cloud computing can also be observed in the market. Some start-up e-commerce sites (such as Coupa) don't have their own infrastructure and decided to run their entire company from the Amazon web services cloud. Other companies are taking a more appropriate approach to embrace cloud computing.

GFI Software offers a variety of IT service management software products, including infrastructure, security and email services, and the company recently announced a plan to move all of its software products to a cloud-based SaaS delivery model. “We have to do this, this is the future trend,” CEO Walter Scott said. “Customers want simplicity, and cloud computing is the easiest way to deliver software services.” Cloud computing can provide customers with faster deployment. And simpler management. In a cloud-based model, GFI will be able to automatically install security patches or other updates and then distribute all of these updates to all users of the application.

Scott said that this is a transition for the market. Not all customers are ready to embrace cloud computing. Many European companies are deploying cloud computing technology at a slower rate than US companies. As the company transitions its dozens of applications into a hosted model, GFI will continue to offer in-house product installations as well as cloud-based services.