Amazon and IBM stake their future in the cloud (and what that means for your company)

Wednesday, June 26th, 2013


If you are still unsure if cloud computing has a future, you need to look no further than two recent headlines that promise to accelerate the adoption of both public and private cloud computing.

Since opening its doors in 2006, Amazon Web Services (AWS) has grown incredibly fast and powers many successful Software as a Service products such as Netflix and Dropbox. In fact, it is estimated that AWS now runs 1% of the internet and will generate as much as $3.8B for Amazon in 2013. During this time Amazon has been a proponent of public clouds, like their own AWS. They’ve stated that a private cloud by definition cannot be consider “cloud” computing since it is not open to the public. Of course that line of thinking helped serve their interests. Last week, however, Amazon confirmed that they would be building a private cloud environment for the Central Intelligence Agency.

On the other end of the spectrum is IBM, as much a symbol of the old computing universe as Amazon is to the new. Yet earlier this month IBM announced it is seeking to buy SoftLayer Technologies, which is the world’s largest privately held web hosting company. This immediately makes IBM a stake-holder in the future of cloud computing.

Forecasting the cloud computing future

Both these moves signal the maturation of the cloud computing market. No longer a fringe technology, now many of the world’s leading companies—and leading security agencies—are embracing a cloud architecture as a way to augment their IT infrastructure. This also sends a signal to those organizations that have been on the sidelines, thinking of entering the cloud computing market. These two stories may act as a form of “due-diligence-by-proxy.” That is, once companies see that conservative IBM has entered the cloud computing market and high-security organizations like the CIA have adopted the technology, then it becomes easier to justify the adoption for their companies.

Then again, both IBM and Amazon could have just seen the writing on the wall. A study done by Gartner last year showed that Software as a Service (SaaS) and cloud-based business application services will grow from $13.4 billion in 2011 to $32.2 billion in 2016. In addition, a report from Cisco shows that global cloud traffic will account for nearly two-thirds of total data center traffic by 2016.

History will tell us for sure, but all these reports suggest that cloud computing is about to enter the mainstream computing market and establish itself as a given in any IT strategy. What do you think? Will security concerns still slow the adoption of cloud computing or will news of these seismic shifts in the market finally calm those fears?


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