Wednesday, July 21, 2010
Cloud Computing is Sitting in the Catbird Seat
Earlier this week, two leading technology companies betting their businesses on the promise of cloud computing -- EMC, Inc. and VMware -- reported strong second quarter earnings.
For EMC, this was its third consecutive quarter of record revenue growth. The company's operating cash flow is at an all-time high.
And server virtualization leader, VMware, exceeded analysts expectations with strong second quarter profit and sales results as well.
Google, who along with VMware constitutes half of the so-called Four Horsemen of Cloud Computing, also announced last week that it too grew second quarter and revenue profits -- although profits fell short of the street's expectations.
On the company's earnings call, EMC execs said that sales of its solutions for building virtualized, private and public clouds will grow this year by about 25 per cent.
VMware's second quarter results and rest-of-year guidance were strong enough to earn a price target increase from the analysts at J.P. Morgan -- from $60 to $70.
And if these cloud developments don't excite, then how about this? Cloud computing is helping organizations climb out of the global economic mess!
Well, according to a new study conducted by international research firm Vanson Bourne, a majority of IT business and decision makers say cloud computing is helping their companies do more with less.
A number of the 600 survey respondents believe that the benefits of cloud computing will result in a 15 percent decrease in their IT budget while others said IT savings could approach 40 percent.
Bryan Doerr, CTO at Savvis, Inc. -- which commissioned the study -- says that two key issues are driving organizations to cloud computing: flexibility and a pay-as-you-go model.
Cloud computing isn't the perfect computing model -- yet.
Security issues remain a concern, for example. But among fewer and fewer organizations as security issues are addressed and resolved.
Not matter how you slice it, Cloud Computing is enjoying the view from its coveted perch.