Is Cloud Computing Changing the World?

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I am reading an article from BusinessWeek making a case about how cloud computing is changing the world. Rachel who wrote the article presented some interesting facts which are as follows:

1. IBM announces on Aug. 1 that they are spending $ 360 million dollars on a cloud computing data center.
2. Dell supplies Web 2.0 heavyweights Facebook, Amazon, Microsoft and Yahoo products that they have specifically tailored for these types of clients.
3. Microsoft is implementing their Software-plus-Services business model which gives clients and option between the two.
4. Analysts predict that annual global market for cloud computing is going to reach $95 Billion in the next five years; accounting for 12% of the worldwide software market.

These are strong facts and companies are making every effort to be part of the future era—cloud computing. Nonetheless, some companies are in a tug-of-war between software as a service and the traditional offerings; most notably, Microsoft. They cannot turn their backs on this vertical market and have launched Windows Live, Mesh and have aggressively pursued Yahoo. Microsoft wants to make sure that their software packaged offerings remain intact, stable and continously provide bottomline results to their company; this in turn slows down the growth of cloud computing. It is hugely profitable to sell a $ 500 dollar license to a single office user than get a measly $ 50 minus all the other expenses of hosting the information themselves.

Cloud computing is definitely changing the world; but I seriously doubt that it would be as fast as it’s hype. 12% percent of the worldwide sales market in the next five years is not much to radically change the business model of companies. There are a lot of billion dollar software companies with employess over 50,000 and continously growing who are not buying into this cloud computing model.

Their client relationships and deeply appreciated value oriented-results would keep the growth of cloud computing in check.

You can read the article from BusinessWeek here.

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Wednesday, August 6, 2008

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August 6, 2008 @ 11:52 am

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