10 Cloud Computing Predictions for '09

In some respects, the cloud computing market arrived in a big way in 2008. Amazon (NSDQ: AMZN), EMC (NYSE: EMC)/VMware, IBM (NYSE: IBM), Google (NSDQ: GOOG), Microsoft (NSDQ: MSFT), Salesforce (NYSE: CRM), and a dozen other vendors introduced products and services for on-demand, pay-as-you-go computing.

In other ways, however, cloud computing is still nascent. Google's "platform as a service" App Engine is only in preview mode, Microsoft's Azure Platform Services have yet to be delivered, and Oracle and SAP are watching and waiting from the sidelines. In addition, businesses adopting cloud services are still in the minority, as IT pros mull the security risks, governance implications, and data-integration challenges of this new IT delivery model.

What happens next? Despite the economic recession, new players will emerge as cloud service providers and, because of the recession, IT departments will plug into cloud services as a way of "doing more with less." Some of the issues associated with cloud computing will fade into the background, while others will be pushed to the forefront. Following are my predictions for what's ahead in 2009.

1. The Cloud Market Will Grow Steadily.
Cloud computing growth will exceed 20%. That number is an educated guess, not the result of market research, but the important point is that the cloud market will grow at a healthy rate -- 10%, 20%, 30%, or more -- while enterprise software, hardware, and other segments of the IT market are hard pressed to grow at all. In two recent examples, Amazon's nonretail business, which includes Amazon Web Services, grew 45% in the third quarter of 2008, while Salesforce's revenue in the third fiscal quarter climbed 43%. Cloud services will appeal to budget-restrained IT departments looking for ways to deliver new applications without investing in new software and servers.

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