The global slowdown is turning businesses to cloud computing at an accelerating pace.
“We thought the uptake of cloud by enterprises was going to be slow,” said Savvis managing director Bill Fathers of last year’s outlook for the market. “I think we were wrong.”
Companies desperate to save money are turning to outsourcing, says Bill Fathers
Fathers, who is also a senior vice president of the outsourcing firm, says there is pent up demand for both cloud computing and outsourcing in general from businesses desperate to save money. That is because hosting a server or a company application at an outside data center can often be cheaper.
Renting space on a server in someone’s hosted “cloud-computing” data center can cost between $30 and $50 a month, he said. That’s a significant reduction from even hosting a company-owned server in that same data center – an outsourcing procedure called co-location. Co-location can cost $1,000 a month, which is still often less expensive than keeping the same server in house.
That’s because the cost of the data center is shared among a group of customers. And with a cloud-based server, the server itself is shared among customers, spreading its costs out as well.
The downturn has shifted the market place, Fathers said. Companies are abandoning in-house information-technology projects to push ahead on outsourcing.
Fathers said he expects cloud services to make up about 15 percent of the outsourcing market by the end of this year compared with 5 percent at the end of 2008.
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