In conversations I’ve had with vendors and more leading edge IT users over the last 6 months, most have agreed with this hypothesis. The US recession may have started in the last quarter of 2007, but it took nearly a year to feed through to IT budgets. The need to cut IT costs hit with a vengance in the 3rd and 4th quarters of 2008 (a little earlier for some). However we know many companies were already running fairly lean IT shops – not least becuase they were given only small budget increases, on average, roughly tracking inflation, in the previous 4 years.
So companies looking for a significant new round of IT cost cuts are having to tackle the challenge creatively. That makes many of them very interested in the cloud ideas. The theory suggests that the massive workload aggregation in cloud datacenters should yield lower per user, per month costs of software operation than running standard apps and tools yourself, for example.
The problem is that the cloud isn’t ready for corprate prime time. Google, Microsoft and others are improving web delivered software functionality, building more data center capacity, defining service levels and market enagement models, building billing systems and all the rest. They are doing it as fast as they can – but a lot of it just isn’t ready for the mainstream, moderately risk averse centre of the market. Which is a shame.
So you can view the arrival of the recession and the arrival of the cloud as annoyingly adrift of perfect strategic alignment. That said, the demand created for cloud ideals will certainly spur the vendors on to deliver faster and perhaps the whole market evolution will be accelerated as a result.
Every recession has a sliver lining.
P.S. Maybe its 2 years too early, maybe 1 year. 18 months feels like about the right gap – but this isn’t precise analysis.
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