Cloud Computing is the practice of using a network of virtual and remote servers to store, manage, and process data as opposed to a physically present server. IT offers the below main benefits:
- Pay-per use: Consumers of cloud computing pay only for the resources they use,
- Scalability: Consumers who require more resources are able to acquire them instantly, and
- Self-service provisioning: Consumers can switch on resources depending on their workload.
According to Forrester Research, the public cloud market is estimated to reach $191B (€175B) by 2020, growing significantly from 2013’s market size of $58B (€53B). Cloud applications are predicted to deliver the greatest proportion of the growth, reaching approximately $133B (€122B) in revenue by 2020. Forrester predicts cloud platforms will contribute $44B (€44B) in revenue and cloud business services, $14B (€13B) by 2020.
What is driving this growth?
New technologies are accelerating instant access to information. Fatter servers allow more Virtual Machine instances to be created per server. Emerging concepts such as Software Defined Networks for automated and policy driven network management, and generic compute engines for running Development code are re-shaping business processes to be more efficient and less costly.
Commoditisation of cloud services
As more people switch to Cloud storage systems, the market is becoming increasingly competitive, driving prices down and making this service a stronger consideration. Amazon.com, Inc.’s Amazon Web Services, Microsoft’s Azure and Google’s Google Cloud platform are the biggest cloud players in the market and they will continue to drive prices down and to introduce further feature enhancements to the market. Inevitably this creates tough competition for the smaller cloud providers to scale up to the higher end requirements of the customers.
Adaptability, flexibility and balance are three qualities essential to long-term business agility. Cloud computing allows organisations to scale up their operations and deliver information in a timely manner. This, in turn, heightens people’s confidence and trust in the service thus enhancing the demand.
Shift to Operational Expenditure
For businesses, hardware and one time licenses represent a sizeable investment. Subscription based pricing enables better, if not instantaneous, accessibility to Infrastructure and Computing platforms that are traditionally costly and often difficult to build. One must not only consider the actual hardware and software to setup the equipment but also the relevant technical expertise to configure and maintain it.
Service Provider Licensing Agreement (SPLA) pricing
Major Software vendors are increasingly adopting subscription based pricing models that create opportunities for cloud providers to drive added consumption and revenue. For the consumer, this means accessibility to the latest technologies without the initial capital outlay that comes with acquiring vendor software licenses.
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