Click here to close now.




















Welcome!

Related Topics: @CloudExpo

@CloudExpo: Blog Feed Post

Gartner’s Cloud Numbers Don’t Add Up (Again!)

Their numbers from last year were disputed by me

Once again, Gartner has publicized entirely useless and (worse) misleading numbers on the global market for cloud computing services.  Their numbers from last year were disputed by me (here, and here) and several others, yet they kept to their fataly flawed methodology for the 2010 update.  This is despite at least one of the analysts who’s name appears on the report privately agreeing with me that last years numbers were “rubbish” and that they were pressured into using this methodology.

The press release cited above indicates that “cloud services revenue is forecast to reach $68.3 billion in 2010…”  My primary question is “Hey Gartner, what color is the sky in your world?”  Or perhaps it should be “What have you been smoking?”

I should point out at this point that someone totally unrelated to this blog or my job recently handed me a copy of the complete Dataquest report on which the press release was based.

Here is a distribution of the 2010 numbers from there report:

Soure: Gartner (May 2010)

Breaking It Down – Google AdWords Ain’t Cloud!!

As was the case last time, the most ludicrous inclusion in these numbers is what they include under the heading “Business Process Services.”  Out of $68.3 billion total cloud services forecasted for 2010, Business Process Services is $57.9 billion, or 85%.  The biggest chunk of this is $32 billion in online advertising.  That’s right, Gartner thinks that the billions that advertisers spend with Google, Yahoo, and others for advertising their products and services should be counted as cloud spending.

Okay, so I’m marketing mortgages using AdWords, and the money coming out of my marketing budget counts as cloud?  Really?  Is it just me, or is that totally insane?!?

Other things that count as cloud in the “Business Process Services” bucket?

  • Cloud-based E-Commerce: this is a bit of a toss-up.  The fees that eBay collects from merchants and the Amazon marketplace fees are included here.  Is that really a cloud service, or just distribution???  I’d say it should be out.  Though if you want to put it anywhere, count it as SaaS revenue.
  • Payments: this includes the fees that PayPal charges, most for merchant card processing.  It ain’t cloud!
  • HR Services: the fees that ADP charges your company to process your checks and provide online access to your payroll records??  Yup, it’s cloud according to Gartner.
  • Supply Management: they are not clear about this, but I imagine fees charged to manufacturers for inclusion in supplier search engines (e.g. Alibaba) might count here.
  • Demand Management: could be advertising analytics apps and programs for managing online search spending, but again not clear
  • Finance, Accounting, Admin: again, they don’t provide good examples here.  This could include NetSuite, but wouldn’t that be in SaaS?
  • Operations: no idea, but most business operations I can think of would not be “cloud.

Frankly, I wish I knew what was going on over there (Gartner), but to me this report is nonsensical that I just can’t wrap my head around it.

The CloudBzz Revised Cloud Market Forecast

Using the Gartner numbers as a base, and stripping out the Business Process Services category in its entirety, I come up with the following numbers.

The CloudBzz revised worldwide market for cloud services in 2010 is forecasted at $10.5 billion, growing to $34.1 billion in 2014.

That’s a much more believable set of numbers, any way you want to look at it.

Source: Gartner (2010) revised by CloudBzz

Now, these are numbers I can believe in.  The vast bulk of cloud today is in the SaaS market.  Even out to 2014, more than 60% of “cloud” revenue is SaaS.

Source: Gartner (2010) revised by CloudBzz

Interestingly, by 2014 the PaaS market is only 3% of the total cloud market, according to Gartner.  Not sure that I believe that, but I don’t have any better numbers at this time.

Why Gartner Should Fix This…

Everybody likes big numbers, especially when they contribute to the “hype cycle” we all like to make fun of.  $10.5 billion in 2010 is actually a pretty big number.  $34.1 in 2014 is big too.  I just wish Gartner would come to their senses and stop adding to the confusion about what is a cloud service, though my expectation is that they will continue to propogate this farce as long as their customers are buying it. IaaS, PaaS, and (some would argue) SaaS are all that should be counted in anybody’s cloud forecast.

p.s. I really like the Gartner people that I’ve met who cover cloud.  I just can’t believe that they consider Google AdWords as part of this exciting and fast moving IT market.

Follow me on twitter for more cloud conversations: http://twitter.com/cloudbzz

Notice: This article was originally posted at http://CloudBzz.com by John Treadway.

(c) CloudBzz / John Treadway

Read the original blog entry...

More Stories By John Treadway

John Treadway is a Vice President at Cloud Technology Partners and has over 20 years of experience delivering technology and business solutions to domestic and global enterprises across multiple industries and sectors. As a senior enterprise technology and services executive, he has a successful track record of leading strategic cloud computing and data center initiatives. John is responsible for technology IP at Cloud Technology Partners, and is actively involved with client projects and strategic alliances. John is also an active blogger in the cloud computing space and authors the CloudBzz blog. Sites/Blogs CloudBzz

Latest Stories
Digital Transformation is the ultimate goal of cloud computing and related initiatives. The phrase is certainly not a precise one, and as subject to hand-waving and distortion as any high-falutin' terminology in the world of information technology. Yet it is an excellent choice of words to describe what enterprise IT—and by extension, organizations in general—should be working to achieve. Digital Transformation means: handling all the data types being found and created in the organizat...
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
Chuck Piluso presented a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. Prior to Secure Infrastructure and Services, Mr. Piluso founded North American Telecommunication Corporation, a facilities-based Competitive Local Exchange Carrier licensed by the Public Service Commission in 10 states, serving as the company's chairman and president from 1997 to 2000. Between 1990 and 1997, Mr. Piluso served as chairman & founder of International Te...
The Software Defined Data Center (SDDC), which enables organizations to seamlessly run in a hybrid cloud model (public + private cloud), is here to stay. IDC estimates that the software-defined networking market will be valued at $3.7 billion by 2016. Security is a key component and benefit of the SDDC, and offers an opportunity to build security 'from the ground up' and weave it into the environment from day one. In his session at 16th Cloud Expo, Reuven Harrison, CTO and Co-Founder of Tufin,...
Container technology is sending shock waves through the world of cloud computing. Heralded as the 'next big thing,' containers provide software owners a consistent way to package their software and dependencies while infrastructure operators benefit from a standard way to deploy and run them. Containers present new challenges for tracking usage due to their dynamic nature. They can also be deployed to bare metal, virtual machines and various cloud platforms. How do software owners track the usag...
SYS-CON Events announced today that MobiDev, a software development company, will exhibit at the 17th International Cloud Expo®, which will take place November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software development company with representative offices in Atlanta (US), Sheffield (UK) and Würzburg (Germany); and development centers in Ukraine. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobi...
With SaaS use rampant across organizations, how can IT departments track company data and maintain security? More and more departments are commissioning their own solutions and bypassing IT. A cloud environment is amorphous and powerful, allowing you to set up solutions for all of your user needs: document sharing and collaboration, mobile access, e-mail, even industry-specific applications. In his session at 16th Cloud Expo, Shawn Mills, President and a founder of Green House Data, discussed h...
For IoT to grow as quickly as analyst firms’ project, a lot is going to fall on developers to quickly bring applications to market. But the lack of a standard development platform threatens to slow growth and make application development more time consuming and costly, much like we’ve seen in the mobile space. In his session at @ThingsExpo, Mike Weiner, Product Manager of the Omega DevCloud with KORE Telematics Inc., discussed the evolving requirements for developers as IoT matures and conducte...
There are many considerations when moving applications from on-premise to cloud. It is critical to understand the benefits and also challenges of this migration. A successful migration will result in lower Total Cost of Ownership, yet offer the same or higher level of robustness. In his session at 15th Cloud Expo, Michael Meiner, an Engineering Director at Oracle, Corporation, analyzed a range of cloud offerings (IaaS, PaaS, SaaS) and discussed the benefits/challenges of migrating to each offe...
One of the hottest areas in cloud right now is DRaaS and related offerings. In his session at 16th Cloud Expo, Dale Levesque, Disaster Recovery Product Manager with Windstream's Cloud and Data Center Marketing team, will discuss the benefits of the cloud model, which far outweigh the traditional approach, and how enterprises need to ensure that their needs are properly being met.
In their session at 17th Cloud Expo, Hal Schwartz, CEO of Secure Infrastructure & Services (SIAS), and Chuck Paolillo, CTO of Secure Infrastructure & Services (SIAS), provide a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. In his role as CEO of Secure Infrastructure & Services (SIAS), Hal Schwartz provides leadership and direction for the company.
In a recent research, analyst firm IDC found that the average cost of a critical application failure is $500,000 to $1 million per hour and the average total cost of unplanned application downtime is $1.25 billion to $2.5 billion per year for Fortune 1000 companies. In addition to the findings on the cost of the downtime, the research also highlighted best practices for development, testing, application support, infrastructure, and operations teams.
"We've just seen a huge influx of new partners coming into our ecosystem, and partners building unique offerings on top of our API set," explained Seth Bostock, Chief Executive Officer at IndependenceIT, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
Mobile, social, Big Data, and cloud have fundamentally changed the way we live. “Anytime, anywhere” access to data and information is no longer a luxury; it’s a requirement, in both our personal and professional lives. For IT organizations, this means pressure has never been greater to deliver meaningful services to the business and customers.
The Internet of Everything (IoE) brings together people, process, data and things to make networked connections more relevant and valuable than ever before – transforming information into knowledge and knowledge into wisdom. IoE creates new capabilities, richer experiences, and unprecedented opportunities to improve business and government operations, decision making and mission support capabilities.