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IDC Forecasts Worldwide Public IT Cloud Services Spending to Reach Nearly $108 Billion by 2017

Worldwide spending on public IT cloud services will reach $47.4 billion in 2013 and is expected to be more than $107 billion in 2017, according to a new forecast from International Data Corporation (IDC).

In addition, IDC heralded the beginning of a new phase for cloud services, dubbed Chapter Two, in which the scale of cloud adoption will grow significantly. Driving much of this activity is the aging of IT infrastructure at many organisations. Systems are becoming so complex and costly that organisations are desperate for an alternative solution.

IDC Senior Vice President and Senior Analyst Frank Gens commented in a recent article, “The emergence of cloud as the core for new ‘business as a service’ offerings will accelerate cloud adoption and dramatically raise the cloud model’s strategic value. Much of the growth in cloud services is being driven by the increase in deployment options, Gens says.

“The growing richness of these options is a clear accelerator for overall cloud services adoption. The emergence of virtual private cloud (VPC) offerings has helped to shift momentum from dedicated private cloud offerings toward public cloud offerings.”

Gens believes many of the objections that customers have previously held about privacy and control issues with cloud computing are now being addressed. In addition, increased competition among cloud service providers will serve to help lower prices and expand service offerings to the customer.

Google, which makes the vast majority of its revenue from advertising and search, is now increasing investment in its enterprise business to meet business needs, and global demand continues to increase. Although Google does not break down its enterprise revenue separately, it's believed to account for approximately five percent of its overall business. Nikesh Arora, Senior Vice President and Chief Business Officer at Google described enterprise as “another great revenue stream for Google”.

Google has experienced accelerated growth in cloud adoption. In 2009 three million businesses used Google’s cloud offering, Google Apps. Now, in 2013, Google estimates the number of businesses using its cloud offering to be over five million. In addition, according to Arora, more than half of fortune 500 companies are paying for Google Enterprise products.

Published Wednesday, September 18, 2013 6:59 AM by David Marshall
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