Recession Fed the Cloud

We’ve seen it before. Typically, the economy sputters and so do tech sales. But I read a story recently that proclaims the opposite for the Great Recession — that the economic slowdown caused cloud sales to rise because it prompted more CIOs to create lean and mean IT machines with more cloud tech and lighter staff.

One cloud services company highlighted in the piece saw flat revenue from 2008 to 2009, a good thing…compared to companies whose revenues dipped (some by 15-30%) when they didn’t take to the cloud. Now, with the economy showing signs of stabilization and maybe recovery, the company predicts a 30-40% revenue increase, as more companies realize they can do more on the cloud without hiring more IT staff.

OK, so this is the experience of one cloud services company. But does that make a trend? Throw in some Gartner statistics in there, and yes, you have a trend.

This week, Gartner released new estimates of the good fortune of the cloud in a report that said global cloud computing services revenue will rise from $58.6 billion in 2009 to $68.3 billion this year. By 2014, Gartner expects the global cloud services revenue to reach nearly $150 billion. Meanwhile, Gartner predicts that, due to economic pressures, over the course of the next five years enterprises will spend $112 billion in total on SaaS, PaaS, and IaaS.

In the report, Gartner research VP Ben Pring said: “In part, this can be explained by macroeconomic factors. The financial turbulence of the last 18 months has meant every organization has been scrutinizing every expenditure. An IT solution that can deliver functionality less expensively and with more agility (remembering that time is money) is hard to ignore against this backdrop.”

Consider, too, the keynote address of Doug Hauger, general manager of Microsoft Windows Azure, Microsoft’s cloud platform, at the All About The Cloud conference in San Francisco in May. Hauger said business’s decision-making process has sped up as companies require faster time to value. “The economy is really pushing people in this direction,” Hauger said of the cloud.

Our experience here at Monitis mirrors this trend. Last year, our cloud-based monitoring business grew by huge margins, and we won two very distinguished IT industry awards. Our growth is coming from the recognition among companies that while the cloud brings new conveniences and efficiencies, it also brings a responsibility for more vigilance in order to keep servers and sites and customer applications running smoothly.