Force Foundation

What IT sector goes up in an economic down turn? IDC answers the question with this report, Software as a Service Market Will Expand Rather than Contract Despite the Economic Crisis, IDC Finds.

Cloud Computing would have grown in a good economic environment - but this continued growth is a sign of the times. The cloud is good news for companies seeking faster ways to turn on revenue-generating functionality and save up-front costs.

Highlights of the report include:
1. By the end of 2009, 76% of U.S. organizations will have at least one SaaS-delivered application.
2. The percentage of U.S. firms that plan to spend at least 25% of their IT budgets on SaaS applications will increase from 23% in 2008 to nearly 45% in 2010.
3. This market's growth prospects will accelerate the shift to SaaS for the whole value chain as the promise of a recurring revenue stream, and the opportunity to tap OPEX and project-related dollars, will benefit the whole SaaS ecosystem.

These projections for the growth of the cloud are also consistent with our experiences with SaaS’s cousin, SOA. The cloud won't make complexity and risk go away, even if it seems to obscure much of the initial setup effort for end customers.

As companies increasingly rely on the cloud to support business processes, the interactions shared among multiple new services will need to be tested and validated. Per-use service costs and availability will also create significant constraints, and the need for service virtualization will become evident as a means of getting the best of the cloud while eliminating cloud dependencies.

SOA has been around longer than SaaS and is running ahead of it on the Gartner hype curve (See Will SOA Fold into SaaS? Will Quality Happen Along the Way? As I wrote then, one obstacle for the pure plays in the cloud to join SOA in the Gartner slope of enlightenment is to recognize and deal with the increased testing and validation of data from even more diverse sources, as well as the governance and validation of all the underlying technologies that contribute to specific business outcomes.