Tuesday, June 4, 2013

Have Cloud Apps Started Disrupting the Computing Upgrade Cycle?

Gartner1Q13_IT_SpendingTechnology analyst Brian Proffitt suggests cloud apps now are disrupting the computing hardware upgrade cycle, which might explain the weakness of Windows 8 adoption. Simply put, and as has been the case for the last several Windows upgrade cycles, users are finding their apps work well enough that there is no need to upgrade hardware to run new software. 

That wouldn't be unusual, and represents a consumer trend that mirrors what should happen i the business networking space, others would suggest. 

Baird Equity Research Technology has argued that "cloud services will drive a shrinking IT spending pie," since companies will replace server and networking infrastructure with 
cloud services.

gartner ww it spend 2013-2014
That means spending will shift from owned hardware and software to services. 

"We estimate that for every dollar spent on [Amazon Web Services], there is at least $3 to $4 not spent on traditional IT, and this ratio will likely expand further," Baird analysts predict.


In part, that might explain any number of things, from shrinking PC sales to slower operating system upgrades. 

Cloud-based apps, in other words, have begun to affect the hardware upgrade cycle because cloud-based apps do not require hardware upgrades as much as locally-resident apps often do, are upgraded automatically in the cloud and rely as much as the Internet connection as processor speed and memory. 

Over the next three to five years, technology spending in both consumer and business markets will transition from PCs to mobile phones, from servers to storage, from licensed software to cloud, from fixed voice and data connections to mobile. 


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