This forecast doesn’t include private cloud infrastructure or hybrid cloud integration work; it only covers services that are “shared among unrelated enterprises and consumers, open for a largely unrestricted universe of potential users, and designed for a market, not a single enterprise.”

The three biggest verticals for public cloud services right now are discrete manufacturing, professional services and process manufacturing, according to IDC’s report, “U.S. Public IT Cloud Service by Industry Sector.”

Indeed, professional services alone accounted for nearly 40 percent of all public cloud services in spending during 2011, according to the data.

The verticals that will grow fastest, however, moving forward are communications and media, education and construction.

Infrastructure as a service (IaaS) is the most active segment of the public cloud services world right now, accounting for 12.3 percent in 2011. By 2012, it will still account for 12.9 percent of spending, according to IDC’s projections.

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If you can get past the title, what this particular analysis REALLY will tell you is how much you should be thinking about shaping your cloud solutions and services around public infrastructure options (ala Amazon, Google, and Microsoft) versus working with the private cloud infrastructure options being developed by these and other major service providers. Or, if you are really ambitious, based on private cloud infrastructure that you build out yourself.

Here are some of the numbers that you need to pay attention to:

• Among companies that have adopted software as a service (SaaS), 36 percent are using it in some sort of of privately hosted form. What’s more, 25 percent plan future SaaS deployments that managed via a private hosting environment. How does this compare with those using public services: right now, about 40 percent of the businesses using SaaS are using the public form.
• When it comes to infrastructure as a service (IaaS), the argument for thinking private is equally compelling. Here, too, 36 percent of the companies that have adopted IaaS have adopted some private version, rather than a public service.

I should mention that this data is pulled out of the Forrester Forrsights Software Survey from the fourth quarter of 2010. The survey base is 2,124 North American and European software decision makers.

The extent to which your organization can address the private versus public debate is an important consideration, therefore, as you build out your own cloud solutions. Of course, this conversation is probably all the more relevant given the very public Amazon outage of the past week.

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At last week’s IDC Directions conference, I made a point to attend all the sessions geared toward solutions providers. And wouldn’t you know, each session was centered on the importance of the cloud. If there was one message that they were trying to get across, it was that cloud computing will only increase in popularity over the next few years.

For now, solutions providers should take advantage of certain services that are ready for the cloud, including Storage as a Service, email and batch processing. Sensitive data and third-party software with no cloud licensing rules topped the list of those areas not ready for a move to the cloud.

So what else did I get from eight hours of cloud hypnosis? Some pretty interesting takeaways. From IDC’s IT cloud services survey, the main concerns and challenges for implementing cloud computing are:

·         Security

·         Availability of support and expertise

·         Performance

·         Cost

·         Lack of interoperability

But some of the benefits that solutions providers can point out to customers are:

·         Customers only pay for what they use and can pay on a subscription basis.

·         Cloud applications are easy to get up and running quickly.

·         Sharing systems with partners is simpler.

To get customers on board with cloud computing, according to IDC, it’s very important that solutions providers offer competitive pricing and detailed service-level agreements — and that they have the ability to move cloud offerings back on premise for customers.

For now, private clouds seem to be preferred, later this year and into 2011, IDC says customers will lean toward hybrid environments — a mixture of public and private clouds.

IDC isn’t the only one that’s gone cloud crazy. During a speech last week to University of Washington computer engineering students, Microsoft CEO Steve Ballmer said he’s going “all in” on cloud computing.

Ballmer said that 70% of Microsoft’s employees are working on cloud computing projects, and by the end of 2010, that number is expected to reach 90%.

Just in case Balmer saying that he’s “all in” for the cloud isn’t enough for doubters, the slogan also appears on Microsoft’s Cloud Services website.

1: Fear the cloud: Okay, that verbiage may be overkill, but the VARs said they spend a lot of time educating customers about when and if public cloud computing will really meet their needs. Vendor hype aside, board members said public cloud scenarios run counter to HIPAA and other compliance regulations.

The rule of thumb seems to be: Unless you, the customer,  control the data–encrypted across the wire and in storage–and you control physical access to the servers and storage, you will not be in compliance.

Well-publicized outages including the recent Microsoft-T-mobile Sidekick personal data loss should be a reality check for customers, said George Brown, president of Database Solutions. Customers and the VARs supporting them need to know where what liability issues are involved in cloud-based solutions

 Make no mistake: They are all for co-location and other plans to defray costs, but when it comes to regulation, shared infrastructure remains a no-no.

2:  While you’re at it, fear Google: Google’s push into business apps should “make everyone nervous,” said Kevin McDonald, executive vice president of Alvaka Networks 

It’s difficult to tell how serious Google is in its myriad projects. “I see them putting up all sorts of windmills, and Microsoft is out there tilting at them all,” McDonald said. In that, Google is doing to Microsoft what Microsoft used to do to every other software maker: Distract competitors with promised but distant releases of software that will do everything better, faster, cheaper. Vars said Microsoft CEO Steve Ballmer is as obsessed with Google as CEOs from Borland, Novell, WordPerfect, Netscape used to be with Microsoft. This does not bode well for the Big M.

 3: Watch Cisco like a hawk: The consensus is that the network hardware kingpin is the company to watch when it comes to future acquisitions and forays into new businesses. It is viewed as a competitive threat by many VARs. “I’m a lot more concerned about what John Chambers is up to than with whatever the Microsoft CEO is doing,” said one board member.

Several panelists said there is probably truth in the oft-revived rumor about Cisco buying EMC. 

 4: Keep your eye on M&A:  But, Cisco isn’t the only potential suitor for EMC. Other VARs said Microsoft or HP could also do that deal even though Microsoft isn’t much in the way of a hardware company and HP has already bought LeftHand Networks and licenses a lot of other storage.

Brocade appears up for grabs, thanks to a recent Wall Street Journal  story citing an unnamed source (probably the investment banker who really, really wants that deal to happen.)

One panelist said Chinese telcom giant Huawei, which tried and failed to buy 3Com, might also be a suitor for Brocade.

5: Don’t equate small with easy:

There is often an inverse relationship between the size of a customer and that customer’s need for IT help. In other words, don’t mistake a small shop with small technology needs. Companies with under 25 people often require the most handholding.

The customer who buys a $1,600 system usually takes up many times the service calls as a larger customer, said  Jill Steinberg, president of Value Computing, Inc.

Bonus lesson: Watch Snoracle: Participants seem to think Oracle will take care of the hardware supply chain it is purchasing along with Sun Microsystems. Many think the merger, when final, may force some of the other deals already mentioned in # 3 and 4.  HP and EMC could be a formidable counterweight to Sun-Oracle, said one board member.

Click here for last quarter’s IT channel hot spots.

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