SYS-CON MEDIA Authors: Xenia von Wedel, Peter Silva, Glenn Rossman, Ava Smith, Elizabeth White

Related Topics: Cloud Expo

Cloud Expo: Blog Feed Post

Gartner’s Cloud Numbers Don’t Add Up (Again!)

Their numbers from last year were disputed by me

Once again, Gartner has publicized entirely useless and (worse) misleading numbers on the global market for cloud computing services.  Their numbers from last year were disputed by me (here, and here) and several others, yet they kept to their fataly flawed methodology for the 2010 update.  This is despite at least one of the analysts who’s name appears on the report privately agreeing with me that last years numbers were “rubbish” and that they were pressured into using this methodology.

The press release cited above indicates that “cloud services revenue is forecast to reach $68.3 billion in 2010…”  My primary question is “Hey Gartner, what color is the sky in your world?”  Or perhaps it should be “What have you been smoking?”

I should point out at this point that someone totally unrelated to this blog or my job recently handed me a copy of the complete Dataquest report on which the press release was based.

Here is a distribution of the 2010 numbers from there report:

Soure: Gartner (May 2010)

Breaking It Down – Google AdWords Ain’t Cloud!!

As was the case last time, the most ludicrous inclusion in these numbers is what they include under the heading “Business Process Services.”  Out of $68.3 billion total cloud services forecasted for 2010, Business Process Services is $57.9 billion, or 85%.  The biggest chunk of this is $32 billion in online advertising.  That’s right, Gartner thinks that the billions that advertisers spend with Google, Yahoo, and others for advertising their products and services should be counted as cloud spending.

Okay, so I’m marketing mortgages using AdWords, and the money coming out of my marketing budget counts as cloud?  Really?  Is it just me, or is that totally insane?!?

Other things that count as cloud in the “Business Process Services” bucket?

  • Cloud-based E-Commerce: this is a bit of a toss-up.  The fees that eBay collects from merchants and the Amazon marketplace fees are included here.  Is that really a cloud service, or just distribution???  I’d say it should be out.  Though if you want to put it anywhere, count it as SaaS revenue.
  • Payments: this includes the fees that PayPal charges, most for merchant card processing.  It ain’t cloud!
  • HR Services: the fees that ADP charges your company to process your checks and provide online access to your payroll records??  Yup, it’s cloud according to Gartner.
  • Supply Management: they are not clear about this, but I imagine fees charged to manufacturers for inclusion in supplier search engines (e.g. Alibaba) might count here.
  • Demand Management: could be advertising analytics apps and programs for managing online search spending, but again not clear
  • Finance, Accounting, Admin: again, they don’t provide good examples here.  This could include NetSuite, but wouldn’t that be in SaaS?
  • Operations: no idea, but most business operations I can think of would not be “cloud.

Frankly, I wish I knew what was going on over there (Gartner), but to me this report is nonsensical that I just can’t wrap my head around it.

The CloudBzz Revised Cloud Market Forecast

Using the Gartner numbers as a base, and stripping out the Business Process Services category in its entirety, I come up with the following numbers.

The CloudBzz revised worldwide market for cloud services in 2010 is forecasted at $10.5 billion, growing to $34.1 billion in 2014.

That’s a much more believable set of numbers, any way you want to look at it.

Source: Gartner (2010) revised by CloudBzz

Now, these are numbers I can believe in.  The vast bulk of cloud today is in the SaaS market.  Even out to 2014, more than 60% of “cloud” revenue is SaaS.

Source: Gartner (2010) revised by CloudBzz

Interestingly, by 2014 the PaaS market is only 3% of the total cloud market, according to Gartner.  Not sure that I believe that, but I don’t have any better numbers at this time.

Why Gartner Should Fix This…

Everybody likes big numbers, especially when they contribute to the “hype cycle” we all like to make fun of.  $10.5 billion in 2010 is actually a pretty big number.  $34.1 in 2014 is big too.  I just wish Gartner would come to their senses and stop adding to the confusion about what is a cloud service, though my expectation is that they will continue to propogate this farce as long as their customers are buying it. IaaS, PaaS, and (some would argue) SaaS are all that should be counted in anybody’s cloud forecast.

p.s. I really like the Gartner people that I’ve met who cover cloud.  I just can’t believe that they consider Google AdWords as part of this exciting and fast moving IT market.

Follow me on twitter for more cloud conversations: http://twitter.com/cloudbzz

Notice: This article was originally posted at http://CloudBzz.com by John Treadway.

(c) CloudBzz / John Treadway

Read the original blog entry...

More Stories By John Treadway

John Treadway is a Vice President at Cloud Technology Partners and has over 20 years of experience delivering technology and business solutions to domestic and global enterprises across multiple industries and sectors. As a senior enterprise technology and services executive, he has a successful track record of leading strategic cloud computing and data center initiatives. John is responsible for technology IP at Cloud Technology Partners, and is actively involved with client projects and strategic alliances. John is also an active blogger in the cloud computing space and authors the CloudBzz blog. Sites/Blogs CloudBzz

Latest Stories
We are all here because we are sold on the transformative promise of The Cloud. But what good is all of this ephemeral, on-demand infrastructure if your usage doesn't actually improve the agility and speed of your business? How must Operations adapt in order to avoid stifling your Cloud initiative? In his session at DevOps Summit, Damon Edwards, co-founder and managing partner of the DTO Solutions, will highlight the successful organizational, process, and tooling patterns of high-performing c...
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from ha...
Software-driven innovation is becoming a primary approach to how businesses create and deliver new value to customers. A survey of 400 business and IT executives by the IBM Institute for Business Value showed businesses that are more effective at software delivery are also more profitable than their peers nearly 70 percent of the time (1). DevOps provides a way for businesses to remain competitive, applying lean and agile principles to software development to speed the delivery of software that ...
Docker offers a new, lightweight approach to application portability. Applications are shipped using a common container format and managed with a high-level API. Their processes run within isolated namespaces that abstract the operating environment independently of the distribution, versions, network setup, and other details of this environment. This "containerization" has often been nicknamed "the new virtualization." But containers are more than lightweight virtual machines. Beyond their small...
The move in recent years to cloud computing services and architectures has added significant pace to the application development and deployment environment. When enterprise IT can spin up large computing instances in just minutes, developers can also design and deploy in small time frames that were unimaginable a few years ago. The consequent move toward lean, agile, and fast development leads to the need for the development and operations sides to work very closely together. Thus, DevOps become...
Cloud Expo 2014 TV commercials will feature @ThingsExpo, which was launched in June, 2014 at New York City's Javits Center as the largest 'Internet of Things' event in the world.

ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ --  IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's

An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and asse...
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Ar...
Leysin American School is an exclusive, private boarding school located in Leysin, Switzerland. Leysin selected an OpenStack-powered, private cloud as a service to manage multiple applications and provide development environments for students across the institution. Seeking to meet rigid data sovereignty and data integrity requirements while offering flexible, on-demand cloud resources to users, Leysin identified OpenStack as the clear choice to round out the school's cloud strategy. Additional...
Technology is enabling a new approach to collecting and using data. This approach, commonly referred to as the "Internet of Things" (IoT), enables businesses to use real-time data from all sorts of things including machines, devices and sensors to make better decisions, improve customer service, and lower the risk in the creation of new revenue opportunities. In his General Session at Internet of @ThingsExpo, Dave Wagstaff, Vice President and Chief Architect at BSQUARE Corporation, discuss the ...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, a...
SYS-CON Media announced today that Aruna Ravichandran, VP of Marketing, Application Performance Management and DevOps at CA Technologies, has joined DevOps Journal’s authors. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. DevOps Journal brings valuable information to DevOps professionals who are transforming the way enterprise IT is done. Aruna's inaugural article "Four Essential Cultural Hacks for DevOps Newbies" discusses how to demonstrate the...
"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.