Cloud computing, anyone?
This, according to an article in the Canada-based Financial Post, is the future of computer technology and has the potential of earning billions of dollars in revenues to companies that embrace it.
Citing a research published by Merrill Lynch entitled “The Cloud Wars: $100+ billion at stake,” the article warned that IT companies that do not adopt the paradigm shift into “cloud computing” in time would eventually be left out.
The Merrill Lynch study explained that “cloud computing,” which the Financial Post described as “the burgeoning technology concept,” was seen as a $160-billion addressable market opportunity, including $95-billion in business and productivity applications, and another $65-billion in online advertising.
The Financial Post article said Cloud, unlike traditional computing, was free from the confines of desktop-based software. It noted that computer terminals run and store programs from a third-party server connected to the Web, eliminating the chance that work is lost if the computer crashes.
With applications automatically allocated on the server, clients are only charged for the space and services they use, bypassing the need to buy pricey in-house hardware, the Financial Post article added. It said the Merrill Lynch study noted that there are at least 10 companies that will have increasing exposure to cloud computing that they identify as “core plays.”
“Cloud equivalents exist today for most business and personal productivity apps,” the Financial Post article quoted Merrill Lynch analyst Justin Post.
The Merrill Lynch analyst said he sees the roughly $2-billion software segment switching over to OnDemand programs, adding that cloud applications for e-mail and word processing have now become equivalent to traditional software.
The Merrill Lynch study also pointed out that Google and Salesforce.com would benefit from the concept because they deliver their core services through the Internet. Similar to electric utilities charging for the amount of services rendered, they open up opportunities for economies of scale by cost-effectively sharing IT resources, the study further said.
The Financial Post article quoted IT analyst Nick Carr who said that “cloud computing” was “an entirely different way to think about supplying software and other computing functions.” Carr is the author of The Big Picture that describes how cloud computing will shape the future of the high-tech industry.
“I think for a lot of the traditional companies whether it is software companies like Microsoft, Oracle and SAP, or hardware companies like Dell or EMC, it’s going to be a very tough transition to go from the old world to the new world,” Carr added.