Cloud confusion

by admin on February 2, 2009

in General


My ZDNet colleague and fellow Irregular Phil Wainewright is almost gushing in his enthusiasm for the latest IDC numbers indicating that the counter cyclical nature of on-demand/saas computing means that IDC has to uplift its predictions for saas uptake in 2009. I usually take analyst numbers with a sack of salt. They’re always wrong, it just depends on the margin of error. Even so, it’s hard NOT to be impressed by IDC’s assertion (as quoted by Phil) that:

“… the harsh economic climate will actually accelerate the growth prospects for the software as a service (SaaS) model as vendors position offerings as right-sized, zero-CAPEX alternatives to on-premise applications. Buyers will opt for easy-to-use subscription services which meter current use, not future capacity, and vendors and partners will look for new products and recurring revenue streams.”

Don’t you just love that definition of SaaS? “Right-sized, zero-CAPEX alternatives to on-premise.” The report’s author, director of on-demand and SaaS research Robert Mahowald, adds an interesting observation that bears out the uprating:

“… several key vendors finished the year very strong, reporting stable financials and inroads into new customer-sets.”

Phil then goes on to provide examples of stellar growth he’s seeing in the marketplace. All good stuff. Then I read on AccountingWeb that:

A survey by Rackspace found that 57% of UK companies were ignorant of the concept of Cloud hosting. The most popular definitions of the concept were: “remote and multiple servers accessed via the internet” (43%); “applications via the internet” (31%); “virtualisation” (14%); and “online storage” (8%).

In spite of this apparent ignorance, 36% of UK businesses were planning or considering using Cloud-based services. Reasons cited for avoiding the Cloud included cost (25 %); untested, new technology (14 %); and reliability (15 %). Just over a quarter (27%) were unsure of how they would use Cloud hosting as part of their IT mix.

“Cloud technology is ideal for the current economic climate, but it is vital that businesses understand how it can best serve their organisation,” commented Rackspace Hosting chief strategy officer Lew Moorman.

Therein lies one of the central problems of the tech industry. Masses of buzzwords, overlapping and oft-times confusing definitions larded with more marketing speak than you can shake a Microsoft sized budget at. If you’re using Gmail, any of the online accounting services, Zoho or then you’re using some form of cloud computing. Beyond that, there’s little to worry about. And who the hell cares anyway other than those punting ‘the cloud?’

Of course that won’t stop naysayers from warning you about the dangers of running your business on the internet. (What about those HMRC floppy disks then?) Business as usual…

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David Turner February 2, 2009 at 10:53 am

Hear hear Dennis – IT industry focuses too much on creating and arguing about buzzwords and acronyms, and too little on what the customer wants!

Zoli Erdos February 2, 2009 at 5:40 pm

But that “problem” is also the beauty of SaaS: as a user, you really don’t have to know about all that *crap*. You just want the functionality, and don’t want to worry how it gets to you …

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