Cloud computing vital to UK future

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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