Cloud Computing: When Will the Big Money Arrive?

Cloud Computing: When Will the Big Money Arrive?

Despite all the hype, it's still early in the cloud game -- and big-time cloud revenues have yet to arrive. At least that's the spin from Matt Asay, a CNet blogger and chief operating officer at Canonical. Asay notes that Amazon's Elastic Compute Cloud (perhaps the best-known cloud environment out there) is believed to only generate about $220 million annually in annual revenues. That's a rather small sum, considering Amazon's annual corporate revenue was $24.5 billion in 2009. So, when will cloud revenues really kick in?

Asay’s blog is a great read, and I heartily recommend you take a look if you have any interest in the cloud computing market. Asay certainly isn't dismissing the cloud wave -- he's just wondering when all the promise will pay off in big-time revenues?

No doubt, startups continue to flood the market. Asay notes that Eucalyptus (now headed by former MySQL CEO Marten Mickos) is looking for $100 million in funding indicate a growing market that’s expanding to meet rising demand.

From where I sit, software-as-a-service, virtualization and the cloud seem inevitable for most MSPs and customers that are looking to cut IT acquisition costs and CAPEX costs.

Anecdotal success stories continue to pop up daily. The prime example is Google Apps: schools and cities alike are adopting it because it’s cheaper, it’s easier to scale up as needs increase, it’s easier to use, and it doesn’t make customers feel like the 80’s never left. Even if you want to leave the search giant’s ecosystem, Microsoft and IBM have competing SaaS suites.

The way I see it, the cloud has three interconnected problems for MSPs: the gap between on-premise and the cloud, in terms of usability and security; the lack of mainstream awareness; and the lack of monetization options. But those are really the same problem, and some of the best software engineers in the world are working on cracking it.

As cloud platforms develop more features and tighten security, they’ll attract new customers, pushing them closer to the mainstream. Once it’s in the mainstream, the savvy MSPs will be able to find paths to SaaS success. And the ones who really thrive are going to be the ones who get in now and start evaluating cloud solutions.

Still, keep your expectations under control. Not even Amazon is getting rick on cloud computing (yet).

Additional reporting by Joe Panettieri. Sign up for MSPmentor’s weekly Enewsletter, Webcasts and Resource Center. And follow us via RSS; Facebook; Identi.ca; and Twitter. Plus, check out more MSP voices at www.MSPtweet.com.


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