Enterprise Cloud Computing – A $21 billion market

I have now posted a first draft of a definition for ‘Enterprise Cloud Computing‘. As the name suggests this is the adoption of the technology in a holistic, cross-enterprise fashion.

The first phase of the Cloud Computing market was essentially the natural evolution of the web hosting market, using new Cloud software to service a market of software developers looking for a specific hosting service for their application. Typically this is limited to applications suitable for a web hosting environment.

In contrast ECC is a strategic initiative to utilize Cloud technologies as an all-encompassing business improvement solution, where it is applied across all of the enterprise IT estate, in particular their large legacy applications, from vendors such as SAP, Oracle and PeopleSoft.

Gartner describes how in 2009 the worldwide market for IT outsourcing services related to packaged ERP, CRM and SCM applications was worth $15 billion, and by 2014 will be worth $21.7 billion.

The key drivers of this outsourcing trend are:

  • The cost savings that companies enjoy from outsourcing their applications
  • The economy continues to struggle, driving more pressure on cutting costs and IT budgets
  • Handling the difficult challenges of managing complex applications like ERP, including attracting and retaining the required skilled staff

All of these points highlight just how valuable Cloud solutions are that can automate and manage these complexities, presenting an entirely new growth market.

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