Why cloud adoption is driving hardware growth, not slowing it

Data centers will spend double on server hardware by 2014 to power private clouds, and mobile usage will also boost server investments

The move to cloud computing is driving significant spending on data center hardware to support businesses' private cloud initiatives, says IDC. In fact, private cloud hardware spending will draw public cloud hardware spending, IDC predicts. IDC also forecasts that server hardware revenue for public cloud computing will grow from $582 million in 2009 to $718 million in 2014, and server hardware revenue for the larger private cloud market will grow from $2.6 billion to $5.7 billion in the same period.

The growth in private cloud computing hardware revenue is not surprising. Survey after survey has shown that enterprises moving to cloud computing are looking to move to private clouds first, which means many new boxes of servers are showing up in the lobby to build these private clouds. That said, I suspect some of these so-called private clouds are just relabeled traditional data center and won't have many built-in cloud computing features beyond simple virtualization. Cloudwashing comes to the data center.

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An irony in all this is that cloud computing may drive up the number of servers in the data center, even though many organizations are looking to cloud computing to reduce the hardware footprint in that same area. But building all those new cloud services, both public and private, means building the platforms to run them. Ultimately, the adoption of cloud computing could diminish the number of servers deployed in proportion to the number of users served, but that won't happen until the late 2010s or even early 2020s. 

Also driving this server growth is the increase in mobile platforms and applications, which are almost always based in the cloud. In all likelihood, mobile may drive much of the server hardware growth in the next two years.

Finally, the number of VC dollars driving new cloud computing startups will boost server sales in 2011 and beyond. Although many startups will use existing clouds for their infrastructure, such as the offerings from Amazon.com and Google, I suspect a significant number of the differentiated startups will have their own data center and server farms.

Just when you thought it was time to sell your hardware stocks due to the rise of cloud computing, the trend upends your expectations.

This article, "Why cloud adoption is driving hardware growth, not slowing it," originally appeared at InfoWorld.com. Read more of David Linthicum's Cloud Computing blog and follow the latest developments in cloud computing at InfoWorld.com.

Copyright © 2010 IDG Communications, Inc.

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