Cloud Services to top $ 150 billion by 2014! How are you positioned?

A news article by Gartner in June 2010 indicates that the Cloud services for 2010 is expected to top $ 68 billion and is bound to grow to $150 billion by 2010.

If we look at an excerpt of the new article,it mentions “After many years of germination, most notably in the SaaS arena, the core ideas at the heart of cloud computing — such as pay for use, multi-tenancy and external services — appear to be resonating more strongly,” Mr. Pring said. “In part, this can be explained by macroeconomic factors. The financial turbulence of the last 18 months has meant every organization has been scrutinizing every expenditure. An IT solution that can deliver functionality less expensively and with more agility (remembering that time is money) is hard to ignore against this backdrop.”

This strongly suggests that one of the key drivers of moving a company’s IT services to the cloud is the cost. In my belief , Enterprises moving and accelerating their IT to the cloud would increasingly look at lowering the costs of migrating and managing their applications on the cloud as these additional cost parameters are synergistic with the overall objectives of driving down the costs or TCO. Clients would also look at effective ways of  doing a faster transition. This especially holds good for enterprises looking at transitioning dozens or hundreds of their applications and services.

Considering the above from the view point of Cloud services providers,Companies with significant labor cost arbitrage would be in a advantageous position to tap this opportunity. Secondly services firms with access to large pool of resources *with requisite expertise and skills in cloud computing and related IT areas* will have an edge  over others simply because ,enterprises moving dozens of their applications will simply need more efforts and resources to migrate  to and then manage various cloud environments .

While such opportunities of  “Cloudshoring”  beckons the IT Services companies, It is imperative that Outsourced IT Services providers prepare their ground well in order to  effectively tap in to such opportunities. It is not going to be easy like just deploying resources. Providing Cloud services today requires a comprehensive understanding of various concepts such as Virtualisation, cloud computing environments,Technologies,tools, business and cost imperatives. This is more so because a number of cloud technologies,vendors and tools have emerged in a relatively short span of time and hence a Cloud Services provider will require dedicated resources across all levels with specialized skills ,capabilities and experience in effectively enabling and deploying complex enterprise IT applications on the cloud.

So, If you want to position yourselves as an effective Cloud Services provider and tap in to the growing  growing opportunities, Check out if you have some of the following

  • If  you have the management Vision,Strategy and Commitment and budgets to play in this field
  • If your service offerings will help solve the client’s business problems of moving and running their IT on the cloud effectively
  • If  you have the Leadership team to provide the right solution to the client requirements.
  • If you have partnerships with Cloud technology and tools vendors
  • If you have enough resources with the right Business,technology and domain skills.
  • More importantly do you have ongoing internal skills building programs to augment your resources and competencies in a short time span  to meet the demand and growth
  • If you have your own assets (knowledge products) that can help accelerate your services or provide higher value to solving client’s business problems quickly.

As I am writing this, I received an email alert that Microsoft and Cognizant have made a pact in Cloud computing services.  Cognizant has announced a joint development programme with Microsoft to deliver cloud-enabled solutions to enterprise customers.

As part of this programme, Cognizant has set up an ‘Octane Solution Center’ to accelerate development of cloud-enabled next-generation solutions that integrate Cognizant business services and Microsoft technologies.

So, I guess you know now ,how to position your company to be a part of  the envisaged  $150 billion opportunity!


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