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Government Cloud Authors: Pat Romanski, Elizabeth White, Liz McMillan, Dana Gardner, Gopala Krishna Behara

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Let’s Talk Dollars and Cents in the Cloud

Let’s be honest for a moment, you might love what you do but you’re in business to make money. It’s as simple as that. You love that you provide a valuable service to your local, city and national community, yet you are in business to make money. There is no way around that simple fact. You’re in business to turn a profit and in this today’s economy, turning a profit means being smart with your investments. It means constantly checking operating costs to make sure you’re in the green. To get in the green you have options, one of those options is the Cloud (a.k.a Grid Computing and/or Complex Hosting Solutions).

I am not going to tell you about how Cloud Hosting and understanding what the Cloud is, will monumentally help your business succeed. Truth be told for the majority of people, maybe you included, the technical details about the process simply doesn’t matter. All you care about is the money grid computing is going to save your business and more importantly, let it succeed. So, in the spirit of capitalism and making some good money, let’s take a look at some numbers.

First, a chart:

One, annual spending on Complex Hosting Solutions will go from $17 billion worldwide in 2008 to $87.2 billion worldwide by the end of 2013. Secondly, the percent of in-house spending replaced by the private, public and hybrid Cloud in 2008 was 0.36% – by the end of 2013 that figure will reach 14.49%. Three, considered one and two, if you are a business of any size and are not making the move to  complex hosting solutions, you’re bleeding yourself dry of money.

Money. You are in business to make money – for dollars and cents. Cloud storage solutions will help you make that money to send you and your wife on a lovely vacation. While you think about Tahiti, here are some more facts:

  1. According to a study published by IDC in December 2011, “about 24% of all new business software purchases will be of service-enabled software with SaaS delivery being 13.1% of worldwide software spending. The IDC further predicts that 14.4% of applications spending will be SaaS-based in the same time period.
  2. According to a study published in Analytics Magazine on October, 27, 2011 the global corporate  mobile SaaS market, “will reach 1.2 billion in 2011 and grow to $3.7 billion by 2016, with a five year-compound growth rate (CAGR of 25.8%. The ability to integrate powerful business applications on smartphones, tables and other wireless devices will facilitate and accelerate SaaS adoption in the corporate business environment
  3. According to a study by the 451 Market Monitor, “the cloud computing marketplace will reach $16.7B in revenue by 2013…including the large and well-established software-as-a-service (SaaS) category, grid computing will grow from revenue of $8.7B 2010 to $16.7B in 2013, a compound annual growth rate (CAGR) of 24%.
  4. According to an article published by MedicalDeviceNetwork.com on January 5, 2012, the U.S. cloud computing market, “for medical imagery was at $56.5M in 2010 and is forecast to grow at a Compounded Annual Growth Rate (CAGR) of 27% during 2010-2018.
  5. According to a study conducted by the U.S. Federal Government in 2011, the complex hosting solutions market will enter into a double-digit growth phrase – “at about 16% CAGR over the period 2013-2018, with annual federal Cloud Computing market to hit the $10 billion landmark by 2018.
  6. Forrester “forecasts that the global market for Cloud Computing will grow from $40.7 billion in 2011 to more than $241 billion in 2020. The total size of the public market will grow from $25.5 billion in 2011 to $159.3 billion in 2020.
  7. According to Cisco, “global Cloud IP traffic will increase twelvefold over the next five years, accounting for more than one-third (34%) of total datacenter traffic by 2015.” (Source – Cisco Global Cloud Index: Forecast and Methodology, 2010 – 2015)

The signs are all around us and the numbers do not lie. The finances behind grid computing are rock solid. From Gartner forecasting small and medium size businesses in the insurance industry having a higher rate of Cloud adoption compared to the enterprise class counterparts – 34% vs. 27% – to Gartner further forecasting the global IaaS market to grow by 47.8% through 2015, the Cloud isn’t going anywhere.

Moreover, the minds over at Cisco have forecasted 57% of all company workload will be done via the Cloud. 57%. You might not care about the technical aspects of grid computing. You might not care how your IT company of choosing deploys your private Complex Hosting Solution but you should care about saving money to get ahead. Saving money to get ahead is what the Cloud enables small and medium size companies to do. In a market place dominated by international giants and multinational corporations, the Cloud levels the playing field by giving small to medium sized business the same IT solutions MNC’s utilize for a fraction of the overall cost.

The writing is on the wall. The Cloud is here to stay and now you have a choice: either join the warm embrace of Cloud Computing or get left behind. It’s up to you.

And now, for a better visual summary of what you just read, an infographic.


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