Piper Jaffray has published a 300+ page study on the cloud computing industry based on a recent survey undertaken of 100 CIOs. Bottom line, cloud computing is expected to grow significantly over the next five years.
Survey respondents expect the mix of cloud computing to escalate strongly to 13.5% in five years. This equates to a five-year CAGR of 19.2%, or 23.9% when we also incorporate IDC’s forecast that total software budgets will grow 4.7% annually. In other words, software spending will grow gradually in the next five years, but the mix of spend allocated to cloud-based applications will likely surge rapidly. Another way to think about the data is that the Cloud Computing market is expected to grow five times as fast as the broader software market: 23.9% vs. 4.7%.
If anything, I think the prediction is conservative and the impact could be much larger in magnitude when mainstream adoption occurs. But the risk is that adoption takes longer, just as it did for open source software. And as the report indicates, open source is powering much of the cloud computing that's going on:
The next-generation Cloud Computing data centers are NOT running Microsoft Windows; they are increasingly leveraging the compelling economics of open source components. For example, the data centers powering Amazon, Google, and salesforce.com all run on Linux and other open source technologies. In fact, Red Hat’s operating system and the MySQL database are key components to many of the leading-edge Clouds being developed today.
Why is this occurring? Because open source leverages a global community development process which results in a product that evolves rapidly, provides transparency into the source code dynamics, and surpasses other products in terms of security and reliability – all at a lower total cost of ownership (TCO) than traditional offerings.