Public Cloud Grows as Focus Shifts from Savings to Innovation

It’s no surprise that there’s a sunny forecast for cloud services, especially now that they are shifting to what experts say is their “Chapter Two” phase. By Cecilia Galvin

The five-year forecast for public cloud services worldwide is sunny, according to a study published recently by IDC. And being on the front lines of SMB IT, channel pros should not be surprised. What might be surprising, though, is that cloud services are shifting into what the analyst firm calls a "Chapter Two" phase, in which the scale of cloud adoption is much larger, and more user and solutions driven.

In this second phase, says IDC, "cloud and the other 3rd Platform technologies-mobile, social, and Big Data-will become even more interdependent as they continue to drive growth and innovation across all industries that depend on IT." And that means businesses won't look to cloud services primarily as a way to save money through IT efficiencies, but to innovate and create new competitive offerings, notes Frank Gens, IDC's senior vice president and chief analyst. And this, says Gens, "will accelerate cloud adoption and dramatically raise the cloud model's strategic value."

What's spurring public cloud spending worldwide is the increasing variety of cloud deployment options, says IDC, including virtual private clouds that offer the same economies, scale, and innovation as the pubic cloud, but have some of the privacy and control features of a private cloud.

In addition, IDC expects commoditization and competition to result in lower pricing and tighter margins, as well as consolidation in infrastructure-as-a-service (IaaS) offerings. Competition will also force vendors to expand into higher-value services and woo more and more customers.