An analysis that was released in January found that public cloud spending would exceed $160 billion in 2018, and by 2021, would almost double. The United States was allotting more money to cloud than any other nation, with China expected to shift into the number-two slot – moving past the United Kingdom, Germany, and Japan – by 2021.
The report, which was released by the International Data Corporation (IDC), found that the amount spent on cloud was rising at 23.2% in 2018 vs. 2017, achieving $160 billion. It then was expected to continue to grow at a slightly less breakneck pace of 21.9% through 2021 – hitting $277 billion at that point.
Discrete manufacturing was projected to spend more on cloud that any other economic segment, spending $19.7 billion on it. Directly below discrete manufacturing were professional services at $18 billion and banking at $16.7 billion. Below that were process manufacturing and retail, which will both spend over $10 billion.
To better understand growth of the cloud, we can look at it through a series of questions:
- What is cloud computing, and why is it used?
- What are the three primary types of cloud?
- What is the history of cloud?
- What other research suggests fast cloud growth?
- What are the primary benefits of cloud?
What is cloud computing, and why is it used?
Cloud computing is a technology described by Merriam-Webster as meeting two chief specifications – it allows data to be accessed over the internet, and it stores the data on multiple servers. Through cloud service providers (CSPs), firms can lease access to storage and applications instead of having to run their own data centers or infrastructure.
One reason many organizations say that they use cloud is because they do not have to spend as much initially. Companies also like that they do not have to worry about the challenge of purchasing and upkeep for their own IT equipment and facilities. They can instead pay for whatever they need through third parties. Meanwhile, CSPs are able to achieve substantial economies of scales by providing many different customers with the same services.
What are the three primary types of cloud?
The basic types of cloud are infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and software-as-a-service (SaaS).
IaaS, also called cloud hosting, is an arrangement in which the vendor creates and supports hardware that they configure and virtualize, allowing for their customers to deploy computing resources or virtual servers but not having to invest in physical machines or handle all the challenges of managing servers. IaaS generally includes the servers, storage, networking, and virtualization. Aspects of cloud servers that customers may have to handle include applications, databases, security features (although cloud may be housed in an SSAE 16 audited facility), and the operating system.
Platform-as-a-service allows developers to move away from operating system updates, applying security patches, and other hardware-related tasks to focusing on coding, testing, and releasing apps. Tools for version control systems, monitoring, and traffic splitting are often tied into platforms, along with application programming interfaces (APIs).
Software-as-a-service allows users to access an application that is provided by a host via the internet. Dropbox and Salesforce are examples of prominent SaaS applications. SaaS allows users not to have to worry about backing up the systems, updating them, supporting them, or development of the code.
What is the history of cloud?
Not everyone sees the origination of cloud computing the same. Some say that cloud computing goes back to the 1960s and JCR Licklider, who suggested the idea of an “intergalactic computer network.” In 1969, Licklider enabled development of the Advanced Research Projects Agency Network (ARPANET). He wanted people throughout the world to be able to access whatever data and applications were running at any location from any other place.
Other people say that the person responsible for cloud is John McCarthy, who suggested that you could have a public utility model for computation.
Cloud had developed via several lines, most recently via Web 2.0. Cloud has not been a mass-delivered product until recently, because significant bandwidth only started to become possible through the internet in the 1990s.
What other research suggests fast cloud growth?
The finding in the introduction is just one indicator that cloud is on the rise, in various ways. For example, another finding from IDC is that more than one-third of IT spending was currently going toward cloud. With increasing amounts of money going toward public cloud and to private clouds built on-premises, the amount spent on traditional on-premise computing is dropping.
Per Gartner, half of the worldwide companies that have adopted cloud will be shifting 100% of their systems to cloud by 2021. This growth is fueled by an expanding need for management, security, application, and infrastructure services through outside parties. In 2018, worldwide spending on cloud will hit $260 billion, rising from $219.6 billion in 2017. This rate of growth is higher than previous analyst forecasts.
What are the primary benefits of cloud?
There are numerous ways in which companies benefit from cloud adoption:
The cloud enhances collaboration. There are frequent requests for additional cloud systems at 79% of organizations, per the Cloud Security Alliance, with file sharing environments being one of the top solutions of interest. Collaboration is a central characteristic of cloud, since you can access from any location and edit so that updates are applied centrally.
The cloud has strong security. While organizations used to shy away from the cloud for its security, today it is seen as an asset. Facility access is highly controlled, and hardware monitoring is continual. In fact, cloud has been promoted as more secure than on-site infrastructure due to the strong focus on security best practices at these firms. “Very experienced staff maintain these infrastructures, processes are tight and there are many eyes on these systems at all times,” noted Zach Lanich.
Cloud improves agility. You are able to better predict time-to-market with cloud, with less full-time equivalent (FTE) because IT projects are shortened by being able to get your resources on-demand. You will have greater agility, leading to a stronger competitive stance since you are able to product results more quickly and inexpensively. One industry observer noted that he saw the use of cloud for a data analytics project allow a steep drop in cost and significantly better time-to-market, with a drop in delivery time from 4 months to 3 weeks.
Cloud does not need as much capital. One of the main struggles that startups have from the beginning is being able to pay their staff and succeed with their business model. It can be very expensive to fund servers if you are buying them. Cloud is a way to avoid those big costs of a server that you purchase. You just pay for your storage and processing needs each month. Plus, the systems are updated automatically since the cloud provider is in charge of all updates. There is no need to pay for equipment upgrades. You get the service you need without the hassle.
A strong cloud partnership
Cloud spending is increasing for all the reasons described above. Do you want to take advantage of cloud for your organization? At Total Server Solutions, with our SolidFire-SSD-based SAN storage, we are able to provide IOPS levels that are unmatched by virtually any other cloud hosting provider. We do it right.