All pointing skywards for cloud computing

Peter Dinham
Sunday, 24 May 2009 14:09

IT Industry - Market

According to Smith, absence of upfront investment in infrastructure and software, absence of upfront commitments and usage contracts, and what he describes as “few minimum use costs for cloud service buyers” mean that cloud suppliers will become more “susceptible to turnover and revenue fluctuations” and, he says, “the balance of power will shift to buyers as competition, cloud specialisation and ease of migration across cloud services develop.

Interestingly, in the introduction to his report, Smith describes cloud computing as big news and points to the experience of Amazon Web Services, which he says has a peak usage of 80,000 work requests per second, 52 billion files stored and thousands of developers using it.

“When Amazon's virtual computing service, the Elastic Compute Cloud (EC2), launched three years ago, it tended to attract low budget start-ups and web 2.0 entrepreneurs. Now it works with organisations from the New York Times to Sun, Oracle and IBM,” Smith says, adding that “organisations spent $383 billion on business applications, infrastructure software, application development and deployment, servers and storage in 2008.”