Cloud Computing Poised for Post-Recession Boom

[qi:gigaom_icon_cloud-computing] As 2009 kicked off, pundits were adamant that the dismal state of the economy would drive suddenly cost-conscious enterprise IT departments to the cloud. Anecdotal evidence from vendors pointed to more customer engagements, and general interest in cloud computing (which continues to increase) had never been greater. I questioned this conventional wisdom, wondering instead if the economy wouldn’t drive CIOs away from the cloud, fearful that any near-term misstep could be disastrous. A GigaOM Pro report (sub. required) by analyst firm TechAlpha suggests that, at least in the storage area, I may have been right.

In the report, which analyzes the forces commoditizing enterprise storage, authors George Gilbert and Juergen Urbanski write that leading storage vendors are planning their innovation around a 3-year time frame, expecting adoption of new storage technologies to coincide with emergence from the current recession. An accompanying survey supports this analysis, as a majority of respondents said they do not plan to incorporate new options, like cloud storage, before 2011. In the meantime, they’re sticking with what they know.

This stance makes sense for the overall cloud computing market, too. The short-sighted banking practices that contributed to the economic collapse retaught companies the age-old lesson about things that sound too good to be true. Smart CIOs are investigating the cloud, planning for a transition, running proof-of-concept projects, and even moving testing operations and batch workloads to it. But there’s little suggesting that any but the most cutting-edge companies are moving mission-critical production applications into cloud environments (public or private) any time soon. For many, moving to the cloud at this juncture simply entails too much risk, no matter how great the potential reward.

Like the storage business, though, the cloud computing industry is poised to capitalize when the economy rebounds. To that end, security concerns need to be sufficiently addressed, and enterprise-friendly cloud platforms –- some of which, like the Sun Cloud or Microsoft Azure, are not yet even functional -– need to be readied. (Just look at the way Amazon keeps marching forward with new capabilities.) When both the time and the technology are right, on-the-ball IT departments will be ready to reap the rewards.

The recession might not have catapulted cloud computing into ubiquity, but it has significantly increased the likelihood of mass cloud adoption when prudence dictates.

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