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Major shift to cloud IT services inevitable, IDC says

IT infrastructure and services delivered over the cloud will be ubiquitous within five years, and vendors that ignore the shift from on-premises software to Internet-delivered technology will be left in the dust, IDC analyst Frank Gens predicted at the IDC Directions conference in Boston Tuesday.

“If you are not thinking about and acting on delivering your own offerings through the cloud [within five years], you won't be in the mainstream anymore,” Gens said. Avoiding the cloud “won't really be an option.”

Gens defined cloud computing as “consumer and business products, services and solutions delivered and consumed in real time over the Internet.” More technically, Gens said the cloud is made up of shared services under virtualized management that are accessible to people and other services over the Internet in a pay-per-use and self-service model.

An important distinguishing feature under the IDC cloud definition is the use of Internet standards to connect cloud services to one another and to the systems within enterprise data centers, he said.

Cloud services break down into six main categories, according to Gens — applications, collaboration tools, storage, servers and processing, IT management, and platforms.

IDC surveys show 26% of businesses using the cloud for IT management, 15% to bolster server and storage capacity, a quarter for collaboration and business applications, and 17% for application development and deployment.

A common perception is that most customers embrace cloud services because of the cost. While that is certainly true, Gens said IDC surveys show the No. 1 attribute driving people toward cloud services is the ease and speed of deployment.

Users are telling CIOs they want faster delivery of services, and the cloud helps achieve that goal.

“That alone guarantees that over the next several years the cloud model will be very important for CIOs,” Gens said.

Other big selling points identified in user surveys include lessening the need for in-house IT staff, paying only for what you use and when you use it, the standardization of IT systems, and access to the latest functionality.

The top concerns identified in IDC user surveys are security, performance, availability and barriers to integrating cloud services with in-house IT systems. “We're going to have to do a lot of work around service-level assurance to move this market into the mainstream,” Gens said.

The theme of this year's 44TH annual IDC Directions is “ICT [Information and Communications Technology]: New risks, rules and opportunities.” Nicholas Carr, author of The Big Switch and Does IT Matter? is scheduled to speak at the end of the conference.

Recession will be a change agent in the technology world, forcing customers and vendors to adapt to new realities, IDC chief research officer John Gantz said. Whereas IDC was predicting nearly 6% growth in worldwide IT spending back in August, the analyst firm now believes spending will increase by just half of one percent this year. Spending should rebound with 4.4% growth in 2010, IDC forecasts.

“Out there, nothing is familiar,” Gantz said. “We're in the midst of the worst economic downturn since before the computer was invented in 1947.”

But the move toward cloud computing — or utility computing as it is also called — shows that the IT industry is still stable and has room for growth, speakers said. If IT is truly a utility, like water or electricity, it's probably a good business to be in, Gantz said.

Gens, who has traveled throughout the world the past six weeks and spoken with hundreds of CIOs, said “one thing I have learned during this trip … is that this whole topic about cloud, Internet delivery of IT offerings, is really capturing the imagination of a lot of CIOs and line-of-business people out there.”

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