Cloud Investment Is a Must, IDC Study Says

Investment in cloud services is a must for vendors if they need to ensure their survival in the future. Even the largest technology firms cannot maintain market leadership without investing heavily in the cloud. That's according to the IDC report entitled Worldwide Hosted Private Cloud Services 2012-2016 Forecast: New Models for Delivering Infrastructure Services.

By 2016, IDC predicts, hosted private cloud (HPC) services will be worth over $24 billion yearly worldwide. From 2012 to 2016, a compound yearly growth rate of over 50 percent is also predicted for HPC services, which is described by IDC to include both dedicated and virtual private clouds.

IDC delineates between two models of HPC deployment. One is the dedicated private cloud, which gives a dedicated 1:1 physical computing and storage resources for enterprises. This model is touted to provide the best customer control over contracted resources. Examples of dedicated private cloud services include Amazon EC2 Dedicated Instances, IBM SmartCloud Enterprise, and Rackspace Cloud: Private Edition.

The second HPC deployment is called the virtual private cloud, which is an add-on to public cloud services that come with shared virtualized resources and a suite of customer control and security options. Examples of this type are Amazon Virtual Private Cloud (VPC), IBM SmartCloud Enterprise Plus, and Savvis Symphony VPDC/Open.

"IDC anticipates that virtual private cloud will be the predominant operational model for companies wanting to take advantage of the speed and lower capital costs associated with cloud computing while cloud service providers will welcome the move away from the expense of dedicated 1:1 physical systems for delivering their business process and datacenter outsourcing and other services," said Robert Mahowald, research vice president of SaaS and Cloud Services at IDC. "Quite simply, vendor failure in cloud services will mean stagnation. Vendors need to be doing everything they can - today - to develop a full range of competitive cloud offerings and operating models optimized around those offerings."

IDC attributes the robust growth of HPC services to the growing demand for IT firms which provide solutions that are more cost-effective and scalable. The rapid growth would benefit global systems integrators, professional services firms, software providers, and telecommunications providers.

Similarly, Gartner forecasts global spending on public cloud services to reach $677 billion by 2016. And at the end of 2013, Gartner estimates that the market for public cloud services will swell by 18.5 percent, which is equivalent to $131 billion.

Regardless of the overall growth, Gartner cautions that emerging markets, such as those in the regions of Asia-Pacific, Eastern Europe, Latin America, Middle East, and North Africa, will enjoy the benefits of explosive growth because more mature markets tend to have protracted growth rates. "Providers should not assume that a generic strategy applied to specific countries or regions of the world will produce the same outcome when applied to other countries, even countries with similar market characteristics," said Ed Anderson, research director at Gartner. (KOM) Link. Link.