Bailey says Terremark has seen 178% growth in its cloud business from 2010 to 2011, with current revenues in the hundreds of millions. He also says that the No. 1 objection to the public cloud, security, has been replaced by performance -- which Terremark has addressed with proximity. According to Bailey, Terremark now has a physical presence "in all the NFL cities" in the United States. And thanks to Verizon, managed routing services enable "direct access to the backbones of the world's leading carriers" to ensure high quality of service.
Recent high levels of customer demand led Bailey to predict that IDC's estimate of cloud growth -- to $148 billion worldwide by 2014 -- may be missing the mark by several multiples. "Try $600 billion or even $750 billion," says Bailey.
Such aggressive numbers may be self-serving, but the ranks of public cloud boosters are growing. I recently spoke to Joe Coyle, CTO of Capgemini, who believes "the telcos are going to be huge" players in public cloud services. Moreover, he says, in some engagements he is "hard-pressed to come up with a reason to be in your own data center anymore."
In economic times like these, up-front cost is clearly a factor. Conventional wisdom says that sunk cost in infrastructure will prevent enterprises from migrating to the cloud. Who would simply abandon all that stuff? But that formulation changes when rack upon rack of servers reach the end of their useful lives. You can gear up for another major capital investment in hardware -- or turn to a public cloud service provider instead.
The same dynamic applies to SaaS vs. conventional on-premise software -- paying as you go can be a lot more palatable than paying for servers and licensing fees up front, especially when it's dirt cheap. To take one example, Google Enterprise vice president Amit Singh recently told me that 5,000 businesses per day are signing up for Google apps, as opposed to 3,000 per day one year ago.
Marshaling the private cloudIt's worth noting that even if Bailey's wildest predictions turn out to be correct, spending on the public cloud would still amount to little more than 20% of global IT spending by 2014. The rest will be spent on customers' own IT infrastructure and personnel. In large IT operations, the private cloud -- born of technologies and techniques pioneered by public cloud providers -- will provide the path to new levels of efficiency and agility.