Virtualization Technology News and Information
Top 10 Cloud Computing Predictions for 2009

Strong Growth for Cloud Computing, Azure Disappointment, SaaS 1.0 Failure and the Rise of More Cloud Connections 

1. The "cloud of clouds" expands but sees traction revolve around open platforms.  We'll see increasing investment from Microsoft and other traditional software players in new but closed cloud platforms.  At the same time, proponents of a more open approach like Amazon, Facebook, Google, Salesforce will push more and deeper “cloud connections” like they did this year - creating a more heated debate between the value of closed versus federated platforms.

2. At best, Microsoft Azure will be a better platform for Exchange. Microsoft will continue to shower attention on Azure but will see relatively limited adoption from ISVs and customers.  While it will likely disappoint users and remain well behind established cloud players for the first few years, it will become a viable platform by 2010 – primarily as a better foundation for Microsoft Exchange and existing on-premise .NET applications.

3. Google doubles down on the enterprise, enterprises return the favor by racing to Google Apps.  Google has already shown they’re serious about winning over enterprises with acquisitions like Postini and investments in Google Apps.  They’ll continue to expand their support for enterprise-class security, transparency, and development languages. In return enterprise customers, faced with economics that overcome preconceptions, substantially increase their pace of adoption.  We expect to see at least 3X the number of enterprises evaluating and moving to Google Apps, at the direct expense of Microsoft Exchange, Office and Lotus Notes (the Asbestos of Software).

4. A rise in serverless companies with 1000+ employees.
In 2009, the market will start to hear about more and more companies going completely server-less.  While this is already happening at smaller companies, larger and larger companies will optimize their business processes and cut IT expenses by outsourcing to cloud providers.

5. The rise and fall of the private cloud - While private clouds will continue to generate a significant amount of hype, customers in most cases will realize they are little more than a better data center implementation.  They will be valuable for customers who have significant transaction volumes and stringent regulatory or security requirements, but will have little ROI for the average IT organization.  In the end, private clouds will create value for service providers, more so than customers.

6.  A major SaaS 1.0 company will fail.
Although SaaS and cloud investments will increase next year, a number of SaaS 1.0 companies – stand-alone companies who built their SaaS products from scratch on their own - will either falter due to the demands of creating infrastructure, or chose to re-platform.  The progress of enterprise-ready platforms like makes it much easier for SaaS 2.0 companies to build advanced products that can leap ahead of the competition at a much lower cost.  

7. SAP or Oracle gets into the PaaS game.  While these companies may have hedged their bets in 2008 (or even berated the SaaS model), we believe one of these companies will see the writing on the wall and start at least talking about a new cloud platform they’re building over the next few years.  In fact, they will attempt to switch the conversation and convince the market they have been working on this for years but called it something different.

8. Business Intelligence (BI) becomes the next functional area to SaaSify.   Just as CRM and HRM applications became poster children for the shift to SaaS these last few years, we’ll see the same thing happening with on-demand BI.  We’ll also see a bifurcation in this space, with one set of applications built from the ground up to leverage the inherent benefits of cloud computing and one set a repackaging of traditional BI features just delivered over the Internet.

9. Enterprises will figure out how to use social networks in the right way. Companies – especially HR and marketing organizations - will finally figure out how to utilize social networks in their day-to-day operations.  More and more business (employees, leads, market intelligence) will come directly through business applications that tap into Facebook, Twitter, LinkedIn and other social networks that are already being used by employees and customers outside the workplace.

10. There will be at least one $100M software product built on The myth that it is impossible to build a big business on an on-demand platform will finally be debunked by the emergence of a PaaS-enabled application in 2009 that has the potential for a $100M run rate.  

“This year cloud computing made the leap from an interesting proposition to a viable option for even the largest of enterprises.  In 2009 it becomes mandatory.” said Appirio co-founder, Narinder Singh. “Today’s economic climate will force enterprises to pick technology winners and losers for their environment in order to cut costs, be more efficient and deliver business-relevant innovation.  Cloud computing makes this seemingly impossible task a possibility – much more so than traditional software. This is why we believe cloud computing will be counter cyclical, with SaaS and PaaS investment accelerating, and traditional software spending declining.”

Note: These predictions are loosely based on what Appirio is hearing and seeing first hand from industry insiders around the globe – from a base of over 2,000 customers, partnerships with leaders in this space, and conversations with industry influencers. For more details on these predictions and how they can impact IT and business, please check out Appirio’s CIO blog at   Appirio will be tracking the status of these predictions throughout the year at

About Appirio: Appirio ( provides products and services that help enterprises accelerate their adoption of on-demand. Appirio has a proven track record of delivering business value to customers by implementing mission-critical Software-as-a-Service (SaaS) solutions based on platforms such as Salesforce and Google Apps, and developing innovative applications that connect and extend today's leading on-demand platforms. Appirio was founded in 2006, is the fastest growing partner of and Google, and is backed by Sequoia Capital.

Published Wednesday, December 17, 2008 7:24 PM by David Marshall
Filed under:
VM /ETC Poll: Is Cloud Computing in your plans? | VM /ETC - (Author's Link) - January 1, 2009 11:16 AM
To post a comment, you must be a registered user. Registration is free and easy! Sign up now!
<December 2008>