IDC: 15 Percent of IT Spending Will Be Tied to Cloud in 2011

Cloud computing will be moving from a talking point to just another way to deliver IT in 2011 as one of the key transformation technologies in the marketplace, according to Stephen Minton, vice president of worldwide IT markets at IDC.

"Mobile apps are taking off but cloud computing is the biggest story for the next 12 months," Minton told an audience of Wall Street investors and channel executives at the 2010 Raymond James IT Supply Chain Conference in New York. "We’ve been talking about cloud for a number of years but it’s moving from early adoption to mainstream adoption and it will create whole new factors like creating data centers and how you analyze the data in the cloud."

IDC estimates that by 2011, 15 percent of all IT revenue will be tied to the cloud, either directly or through supporting infrastructure, Minton said.

"Public cloud services adoption is growing 30 percent and it will also be a pretty big year for private cloud deployment," he said. "We still believe the long term trend favors public, but he reality is for large enterprises concerned about security issues, companies are going to be investing and getting the best of both worlds."

One area watch is the development of platform-as-a-service (Paas), which could help one more companies develop into the "next Microsoft" by delivering best-in-class cloud-based applications, Minton said. "It could also be Microsoft or Oracle or Google," he said. "It's the battle for hybrid cloud management. [Companies are] looking to establish leadership positions that can help customers on the mid and large side intelligently move from initial [private cloud] adoption to leverage the benefits of moving more into a public cloud model."

Meanwhile, the next generation of enterprise software will be designed from the ground up with the cloud in mind, Minton said. "As enterprises develop new applications, they’re doing it with cloud deliver at the forefront," he said.

Overall, IDC projects IT spending to increase 7 percent this year compared to the previous year, a healthy increase from a 4-percent decline in 2009 compared to 2008. A strong fourth-quarter surge could increase that growth to a double-digit percentage increase for the first time since 2000, Minton said.

Hardware sales have increased 13 percent this year, with only half of that due to pent-up demand from the sluggish economy in 2009, Minton said. The remainder is due to the "deluge of data" in which businesses need to better manage the reliability of their networks and increase storage capacity, he said. "And the cloud is a driver itself," he added.

For 2011, IDC projects IT spending growth of 4 percent to 5 percent, Minton said. "Softening indicators are software and services. The good news is the risk of a double-dip recession is significantly lower than than it was a few months ago," Minton said.