Cloud computing continues to drive IT growth, shapes industry

IDC claims third platform technologies will drive 90% of growth in IT. Are enterprises choosing to ignore this shift sure to stagnate?

The IT industry is undergoing a paradigm shift -- with cloud computing easily being one of the main drivers. Industry analyst firm IDC has coined this shift as the "third platform," following on its previous two technology shifts. And while questions remain about whether this platform is anything new, enterprises that choose to ignore it might not properly evolve.

So, where did the third platform come from? IDC's "first platform" consisted of mainframes and terminals; the "second platform" included the client-server model supported mainly by PCs. As these computing platforms emerged, enterprises were forced to gradually replace their computing infrastructures to flow with the times.

"Mainframes were centralized systems," said Agatha Poon, research manager at 451 Research. With the client-server model, businesses decentralized IT purchases. "Now they are reining them back in with the move to cloud computing," Poon added.

The definition of the third platform is a bit broader than the previous two platforms, covering software as well as hardware developments. It is built on mobile computing, cloud computing services, social networking and big data analytics. From 2013 through 2020, these technologies will drive around 90% of all growth in the IT market, according to IDC.

Cloud computing plays a primary role in transforming enterprise IT's system design. Cloud software development will become increasingly important and will free up developers from tedious infrastructure procurements. This change reduces cycle times and provides programmers with more time for creative development, allowing them to build compelling new business models and improve end-user experiences.

Cloud's growing importance will cause seismic shifts. IDC expects the market will see an explosion in industry Platform as a Service (PaaS) offerings in 2013 as the market moves up the software stack. But horizontal PaaS will become commoditized as more platforms will be built on open source infrastructures. In response, cloud services tailored to the needs of specific industries will emerge.

Consolidation also looms on the horizon.

In 2013, the merger and acquisition activity of the past 20 months will actually accelerate, according to IDC. In fact, the firm expects more than $25 billion in acquisitions over the next 20 months as cloud services become the centerpiece of more vendors' offerings. Packaged application providers, such as IBM, Microsoft Corp. and Oracle Corp., will develop Software as a Service offerings, forcing them to battle with SaaS pure plays, like Salesforce.com and Workday, for leadership in some of the major application software markets. Consequently, traditional market delimiters will blur.

So if a paradigm shift truly is occurring, it's important for enterprises to recognize and embrace it. Companies that are not putting the majority of their energy into keeping up with the changes in the new market will be trapped, and will grow even more slowly than the global GDP, concludes IDC.

Paul Korzeniowski is a freelance writer who specializes in cloud computing issues. He is based in Sudbury, Mass., and can be reached at paulkorzen@aol.com.

This was first published in April 2013

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