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22 Apr 2010
Cloud computing is causing the biggest structural change in the IT industry since the 1960s, and will account for 15 per cent of the UK software market by 2012, according to analyst firm TechMarketView.
The technology is one of several key trends identified as central to the development of the UK software and IT services industry in a report entitled The UK Software Market: Trends and Forecasts.
"Cloud computing is changing the way IT services are delivered. It gives staff multi-platform access to software from almost any location and, as staff are used to using cloud services in their daily lives, they want the same with business IT," said TechMarketView research director and report author Philip Carnelley.
"The rise of cloud software also removes the need for resellers by giving companies direct access to services when required. As such, the likes of Microsoft and SAP could see their stranglehold on the market lessen in the coming years."
TechMarketView expects that 15 per cent of the UK's entire software market will be delivered via the cloud by 2012, and that applications will account for 22 per cent of these products.
Carnelley claimed that concerns over security are decreasing as people become used to accessing services hosted online, and that cloud services hosted by larger companies will have more built-in security than most small businesses could afford.
However, while the cloud will grow, Carnelley expects IT spending to remain flat during 2010, and increase by just one or two per cent in 2011 and 2012 as public and private sector budgets remain tight.
"Although we are seeing a reduction in spend this could be due to the rise of open, office-type products, and free services hosted online funded by advertising, such as Google Docs," he added.
The report also noted that social software, like that of Salesforce's Chatter feature, is becoming increasingly popular as business services take advantage of the popularity of social sites to provide features that are familiar to most people.
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Tailoring the Cloud
Cloud Computing and Software as a Service (SaaS) have gained massive support and as the above article states this trend looks set to rise as organisations look to reduce capital expenditure, leverage a flexible payment model to reflect business change and achieve a far more adaptable IT infrastructure. But it is important that organisations don?t just accept the low cost, vanilla software and identical support contracts on offer. The flexibility and lower costs of hosted, web-based delivery offers organisations a chance to embrace tailored software solutions that truly reflect business needs to deliver long-term value within a highly flexible and affordable IT model. Though SaaS is great for standard solutions such as office applications and even finance software that has been carefully honed over years to support standard business practice and regulatory requirements, this web-based delivery model also offers organisations access to tailor-made solutions at an unprecedented cost base. The emergence of cloud computing in tandem with the new generation of rapid application development tools is reducing the cost of customised software, enabling it to be delivered via the flexible usage base payment model, thus making it available to a new marketplace. Cost will always be a major concern for any IT Director. Removing the burden of internal IT infrastructure management through hosted web-based software delivery has a massive and understandable appeal. It is those organisations that look beyond the basic SaaS model and embrace a hosted tailor-made solution to achieve their exact business requirements and enable ongoing competitive differentiation that will gain not only cost benefits but, more critically, long-term business value. Nick Thompson Managing Director, DCSL Software www.dcslsoftware.com
Posted by: Nick Thompson 27 Apr 2010