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Cloud Expo: Article

Cloud Computing: Cutting Costs, Boosting Profits

Enterprise Cloud Wrap-Up

Move to the cloud, save some cash. So says a pair of recent surveys from CDW and Rackspace.

Companies that move IT capabilities to the cloud are saving money and growing profits, which are then put back into the business to increase headcount, boost wages and drive innovation, according to an article on CIO.com.

Many companies are making the jump to the cloud, at least for select capabilities. A recent study by CDW of 1,242 IT professionals found that more than half of organizations are moving a variety of capabilities to the cloud. And a majority of them are recognizing cost savings and increased profits, according to another study by Rackspace, the open cloud company.

"The findings were pretty telling in terms of the adoption of cloud computing and the benefits of cloud computing," said John Engates, CTO of Rackspace Hosting. "The bottom line is cloud saves companies money and increases their profits."

Rackspace, in conjunction with the Manchester Business School and Vanson Bourne, recently conducted a survey of 1,300 companies in the UK and U.S.

The study found that 88 percent of cloud users pointed to cost savings and 56 percent of respondents agreed that cloud services have helped them boost profits. Additionally, 60 percent of respondents said cloud computing has reduced the need for their IT team to maintain infrastructure, giving them more time to focus on strategy and innovation. And indeed, 62 percent of the companies that have saved money are reinvesting those savings back into the business to increase headcount, boost wages and drive product innovation.

Middle East: Next Big Market for Cloud Computing?
The Middle East could be the next major market to adopt cloud computing, according to IDC.

A recent report by IDC expects total spending on cloud delivery in Saudi Arabia to increase 34.86 percent year on year in 2012 with long term spending to expand at a compound annual growth rate of 49.7 percent between 2012 and 2016, according to Forbes.com.

In a story published in the Saudi Gazette, Hamza Naqshbandi, senior research analyst for IT services with IDC Saudi Arabia said, "Organizations across the kingdom have traditionally preferred to manage their IT operations internally, however, there has been growing interest in outsourcing models, with organizations increasingly using hosting and managed services. This growing adoption of outsourcing services is seen as a first step toward moving to a cloud-based model, as companies become more comfortable with the concept of remote services delivery."

Cloud Computing's Big Debt to NASA
NASA has helped launch the cloud, and the OpenStack platform in particular, to its current prominence, according to an article on Computerworld.com.

And IBM is betting big on OpenStack, which was developed with NASA know-how.

IBM will base its cloud services on OpenStack and help establish the open source platform as the standard in enterprises, according to a recent announcement from IBM.

IBM along with Hewlett-Packard, Dell, Cisco, Red Hat and Rackspace, which helped developed the platform, are supporting OpenStack.

Just about every Fortune 1000 company will be using vendors that are building products and services based on the OpenStack-based cloud platform.

The rapid rise of OpenStack may not have happened without NASA.

OpenStack's beginnings occurred when NASA started a project called Nebula, in what became a cloud management platform. It released compute engine code as open source under an Apache 2.0 license, which drew attention from Rackspace. The vendor had developed a storage cloud called Swift.

Rackspace and NASA combined what turned out to be complementary development efforts and created OpenStack, releasing it in the summer of 2010 as an open source cloud platform.

Chris Kemp, the first CTO for IT at NASA and the leader of the Nebula effort, said that something like OpenStack would have emerged without NASA, but the agency accelerated it "and gave it a lot more credibility quickly."

More Stories By Patrick Burke

Patrick Burke is a writer and editor based in the greater New York area and occasionally blogs for Rackspace Hosting.

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