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Summary:

Cloud-services platform provider OpSource and content-distribution kingpin Akamai today  are announcing some details about strategic partnership that’s now a few months old. I wonder if the decision to go public was influenced by Gartner’s March 26 report predicting the cloud services market will top $56 billion […]

Cloud-services platform provider OpSource and content-distribution kingpin Akamai today  are announcing some details about strategic partnership that’s now a few months old. I wonder if the decision to go public was influenced by Gartner’s March 26 report predicting the cloud services market will top $56 billion this year and hit $150 billion by 2013. If Akamai and OpSource are trying to ride this wave of optimism, they certainly can’t be ridiculed for the decision.

Software vendors with dreams of moving toward Software-as-a-Service (SaaS) offerings are ideal cloud computing customers: They see the benefits of delivering their applications as cloud services, but they have neither the resources nor expertise to build and manage the massive, multi-tenant architectures needed to so do. OpSource’s On-Demand suite of solutions fills this gap holistically — providing not only the computing resources and managed hosting services needed to go SaaS, but also application and business operations capabilities like change management, compliance, analytics and a billing mechanism. OpSource boasts dozens of customers and recently received $10 million in Series E funding.

The Akamai partnership brings complementary route optimization into the mix, which means software vendors can build their apps, from the get-go, to leverage the Akamai platform. A big piece of the puzzle is the Web Application Accelerator, which Akamai has enhanced specifically for SaaS customers. New access control capabilities let end-users access cloud apps from secure locations, and improved visibility lets software vendors analyze customer behavior. Akamai says its SaaS customer base grew by 50 percent in 2008, and it has seen a 20-fold increase in SaaS traffic over the last three years.

Gartner calculated the cloud services market at $46.4 billion in 2008, 83 percent of which was derived from business processes delivered as cloud services (such as cloud-based advertising, e-commerce, human resources and payments processing). Gartner allots 5.5 percent of the 2008 market to infrastructure as a service, and says the applications-as-services segment is “almost twice as large.” The firm expects the latter segment to continue its strong growth, and the OpSource-Akamai duo should prove a formidable foe in the battle for that revenue.

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  1. Alan Wilensky Monday, March 30, 2009

    They (Gartner) are distorting numbers, probably due to the report (possibly) being sponsored by a consortium or influential client. Even if self sponsored, the real developing market for ‘cloud’ (remotely configurable, elastic, fault tolerant, and configurable) is the small and medium business market that wishes to move from work group servers and dispersed clients to hosted architecture. They are being treated as red-haired stepchildren.

  2. Graeme Thickins Monday, March 30, 2009

    I agree with previous commenter, and have heard some in the business question Gartner’s approach to the market.

  3. Alan Wilensky Monday, March 30, 2009

    They are like farmers, fertilizing the fields, getting ready to plant a new crop. The seeds? The horribly under capitalized SAAS, PAAS, and cloud startups that are not ready to host real, earn money, businesses.

  4. $56B doesn’t even pass the sniff test. SFDC is guiding $1.3B earnings, and it’s generous to call that cloud $$, since the gross majority is SFA revenue. You have to define ‘cloud computing’ extremely loosely to come anywhere near that number for the whole market.

  5. Derrick Harris Monday, March 30, 2009

    As evidencing of stretching the definition, you’ll notice that the majority of revenue comes from business processes delivered as cloud services. I think the cloud *computing* market would be better served by defining it more narrowly, but you don’t get the impressive numbers that way. IDC did a similar thing in October, predicting a $42 billion cloud services market by 2012.

  6. Which of the past market/revenue predictions from Gartner or for that matter, any analyst firm, have come true in their entire lifetime of existence? Economics is also about emotions – not just math and prediction models.

    I think analysts like making outrageous market predictions to stimulate mergers and acquisitions and get insight into startups that have cool technology. Then they become agents of making the acquisitions happen by connecting people. Sometimes, they get under NDA and learn the secrets, and then use that to their benefit by using it as a way to connect people. Now, that is legitimate to do – but then, why not come to the forefront and announce “that” as the service they provide.

    As far as Businesses are concerned, when was the last time any sensible company used their Analysts services and implemented anything that followed their guidelines to the dot?

    Many times, the reports are full of information and models and structures, but no real meat. If the Analysts have not run a production network, have not managed a complex software environment, if not supported customers – How can they recommend how to do it?

    As a Business, by buying into an Analysts subscription, you are giving power to the Analyst to act on your behalf. Then they turn around and make it look like – “If you are a Technology Provider, better talk to us, because your target Customers talk to us and most likely they will not talk to you”. They then become the agent of communication. Again, it is legitimate to do that – but then why not sell “that” as the service.

    I think it is high time, Technology Providers as well as Businesses, stop listening to the Analysts and start listening to their Cash in the Bank and their Customers and do what is right for the Customer by investing their Cash for their Customers. You do not need an Analyst to tell you that. If you keep doing the right thing for your customers, they will use your stuff. If not, they will go somewhere else.

    My 0.00002 cents, and the 20 valuable minutes it took to post this.

  7. Alan Wilensky Monday, March 30, 2009

    There is nothing wrong with hiring sector specific analysts under short term contracts to fine tune a product or to get better feature fit and such. Lone wolves, ,myself included, are small s analysts that perform for the customers.

  8. Baseball Stadiums » Blog Archive » Baseball Stadiums Monday, March 30, 2009

    [...] OpSource, Akamai Unite to Score a Slice of $56B Cloud Market Pie – Gigaom.comCloud-services platform provider OpSource and content-distribution kingpin Akamai today are announcing some details about strategic partnership that s now a few months old. I wonder if the decision to go public was influenced by Gartner s March [...]

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