Let's be clear: Cloud computing will shrink the data center

If you thought cloud computing was a fad you could wait out, you're dead wrong

Most people I speak with in the course of the day get cloud computing and are excited by the potential of this technology. However, there are those who view cloud computing as a passing fad. They're waiting for the hype to stop so that they can get on with buying servers and building data centers. At this point, perhaps they need an intervention.

According to a team of 25 analysts at Morgan Stanley, Amazon.com's cloud poses a major threat to traditional IT. They estimate that Amazon Web Services will go from making around $2 billion in 2012 to more than $24 billion by 2022.

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Of course, we'll be robbing Peter to pay Paul. For the most part, the growth will come from the cannibalization of traditional IT services. That means enterprise data centers, so internal enterprise software and hardware growth will slow. We'll move from expensive and inefficient traditional IT to public cloud providers.

This trend is already driving huge changes in the server market. Indeed, while the number of servers shipped by second-tier vendors climbs, traditional OEMs like Hewlett-Packard see their share declining, according to Gartner. Server revenues worldwide were down 5 percent, to $11.8 billion in the first quarter of 2013.

The movement to cloud-based platforms is inevitable. Even cloud deniers need to come around to the fact that the way we've been doing computing in the last 30 years is changing. Core applications, computing, storage, and other IT services will continue to move to public clouds. Although the migration will be slow, it will be steady.

The Morgan Stanley report is only one of many that highlight the growth of cloud computing. I suspect the coming changes will occur without a lot of fanfare. Those who sell technology need to adjust to the rise of cloud computing, as will those who consume technology. I can't say it any more plainly.

This article, "Let's be clear: Cloud computing will shrink the data center," originally appeared at InfoWorld.com. Read more of David Linthicum's Cloud Computing blog and track the latest developments in cloud computing at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.


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