"Web hosting and data storage are the most obvious IT needs that can be addressed by public cloud services" says Greg Potter, Research Analyst at In-Stat.
"With the advent of Software as a Service (SaaS) offerings many businesses are realizing that much of their IT needs can be fulfilled without the need for expensive networking equipment and high-end computers."
Moreover, many small businesses are now re-visiting the use of thin clients for most of their employees, as the need for increased computer processing power is rendered moot by the cloud.
SMB IT Applications Transition to the Cloud
For the SOHO and small business market, there is considerable opportunity for a variety of cloud service providers. According to In-Stat’s latest market assessment, small business spending on public cloud services in 2010 was roughly $3 billion.
As a direct result of this growing demand, In-Stat forecast that public cloud computing revenues are set to increase well over 100 percent from 2010 to 2014.
This significant increase is changing the IT infrastructure paradigm in small office and home office (1-4 employees) and small business (5-99 employees) environments – it’s also transforming business technology application scenarios.
In-Stat’s research shows that SOHO and small businesses will comprise roughly 65 percent of the public cloud computing market in 2014.
Hybrid-Cloud Appeals to the Larger Employers
Mid-sized (100-999 employees) and enterprise (1000 and more employees) businesses have other issues to consider -- primarily security and the cost of transition, when evaluating their choices for cloud computing solutions.
For these companies the choice between public and private clouds will dominate their decision-making processes.
In-Stat believes that private clouds give businesses that are securing sensitive data an alternative to the public cloud, as they can realize cost advantages and improved utilization of IT equipment over a traditional physical infrastructure deployment.
A great number of enterprises are running virtualization software on their current infrastructure, and they’re already recognizing the cost savings yielded by utilizing cloud infrastructure.
For those companies not already utilizing a private cloud platform, In-Stat believes that the public cloud offers an appealing demand-based payment model and scalable infrastructure solution.
In the end, some large companies will very likely choose the hybrid cloud approach -- moving their mission-critical information and applications to a private cloud, and then partnering with a public cloud infrastructure service provider for their other remaining application needs.