Researchers predict that the UK will spend over £1 billion on Cloud Computing by 2012.
This would mean that computer users will subscribe to more and more online applications such as Google Apps and less desktop based programmes.
TechMarketView's survey suggests that at present, cloud computing accounts for only 7.5 per cent of the £8 billion UK software market, however they say that a sharp rise is inevitable.
Other experts have refuted these claims however, saying that cloud computing will compliment traditional desktop software and will not replace it.
Philip Carnelley, a senior analyst at TechMarketView states: "In the old days, big companies used to generate their own electricity. But they do not do that anymore, software is going the same way - let others do the processing."
TechMarketView says that based on their projections, cloud services will be worth around £1.2 billion per year in the UK by 2012.
"This is not just analysts hyping things up", he went on to say, "It is a genuine shift."
Cloud computing allows users to pay subscription fees to a hosting company who can look after data for them as opposed to investing in large, powerful computers.
But not everyone agrees that cloud computing will replace traditional software which processes data locally.
Laurent Lachal, an analyst at rival research firm Ovum disagrees with these new predictions. She says: "The amount of cloud computing is quite small at the moment, so even if it does double that is not such a big deal. The IT industry loves to concentrate on a topic for a few months and then turn against it. There will be a backlash by the end of the year."
Lachal says that cloud systems should not be ignored but should be viewed as an add on to traditional software, not as a full alternative.
"It's becoming a hybrid system," she said, "for example you create your work on software on your PC, and then you save it and share it through the cloud."
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