Gartner’s “Cloud Computing” Kitchen Sink

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(5/8 – Updated numbers below)

At the Gartner Outsourcing and Vendor Management Summit in Las Vegas there was a substantial amount of discussion regarding the size of the market for Cloud Computing. Gartner pegs the 2008 number at a rather lofty $46 billion, going to $150 billion by 2013.

I spoke with Gartner analyst Ben Pring (leading a session on Cloud), and he indicated that about half of that number is spending on Google AdWords. Say what??? That’s right, the people at Gartner consider media buying for Google AdWords a “business process” that is cloud-based. They also include ADP’s hosted payroll service and any ASP-delivered or SaaS offerings.

Pring seems like a good guy, and he claims he’s not the one responsible for this number, but this really goes against credibility for the Gartner community. When I asked Pring about IT’s involvement in AdWords, he didn’t have a clear answer.  I have one – virtually none.

Global 2000 companies buy all media through agencies, and that includes AdWords. They may receive reports and have some management ability through a collection of online ad management tools. But marketing executives at P&G, GM or Wal Mart typically don’t spend time on the Google site playing around with keywords – that’s an outsourced activity.

The SaaS market he quoted at about $5b or so (UPDATE:  Gartner release as of yesterday – $6.6B 2008 going to $9.6B 2009). If you add in all of the pure-play cloud stuff and PaaS vendors like Salesforce and Intut (QuickBase), you might be able to get to $20b. $46b is just a ridiculous number and will confuse the heck out of enterprise IT buyers.

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9 thoughts on “Gartner’s “Cloud Computing” Kitchen Sink

  1. Gartner's cloud forecast is actually broken down into highly granular categories. You're just looking at the huge all-in number. If you need the detail of how much is advertising, BPO, platforms, infrastructure, etc. it's all in the forecast in individual line items.Advertising is important because it pays for many of the IT services that consumers are now getting for free. And increasingly, it pays for business IT, as well — like Microsoft's Hotmail for the .edu market.

  2. Gartner's cloud forecast is actually broken down into highly granular categories. You're just looking at the huge all-in number. If you need the detail of how much is advertising, BPO, platforms, infrastructure, etc. it's all in the forecast in individual line items.Advertising is important because it pays for many of the IT services that consumers are now getting for free. And increasingly, it pays for business IT, as well — like Microsoft's Hotmail for the .edu market.

  3. Surely whether or not IT is involved in Google Ad Words spend is irrelevant? IT functions are no longer involved in the purchase of many of the mobile devices attached to their network; they may be bypassed by the use of eg Facebook as a CRM system (see BBC Worldwide).The non-involvement of IT points not (necessarily) to a mis-definition of cloud, but to the dispersal of technology through the business, and its consumerisation.

  4. Interesting, and the comments above really add to the picture. Would also be interesting to see how much IT spend is not in the cloud. And how many large organisations have actually totally missed out on the cloud concept and whether they are going to get left behind or not….

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