Press Release

STAMFORD, Conn., December 1, 2009 View All Press Releases

Gartner Says IT Organisations Will Spend More Money on Private Cloud Computing Investments Than on Offerings From Public Cloud Providers Through 2012

Cloud Computing Issues being Discussed at Gartner Data Center Conference, December 1-4, in Las Vegas

Despite the economies of scale offered by public cloud providers, private cloud services will prevail for the foreseeable future while public cloud offerings mature, according to Gartner, Inc. Through 2012, IT organizations will spend more money on private cloud computing investments than on offerings from public cloud providers.

Gartner defines public cloud computing as a style of computing in which scalable and elastic IT-enabled capabilities are delivered as a service to external customers using Internet technologies. Private cloud computing is defined as a style of computing in which scalable and elastic IT-enabled capabilities are delivered as a service to internal customers using Internet technologies.

“The hype of cloud computing is that existing IT architectures and processes can be simply replaced by the cloud," said Tom Bittman, vice president and distinguished analyst at Gartner. “The reality of the future IT organization, however, is somewhat a combination. Larger enterprises will continue to have an IT organization that manages and deploys IT resources internally, some of which will be ‘private clouds.’ IT organizations will also take on IT service sourcing responsibility, determining when to leverage external providers, when to deploy internally, and when to leverage both for specific services.”

Private cloud services will be a stepping stone to future public cloud services and, over time, will span both private and public cloud resources in a hybrid manner. For many large enterprises, private cloud services will therefore be required for many years, perhaps decades, as public cloud offerings mature.

Gartner analysts said appropriate investments in private cloud computing will also make it easier for enterprises to gradually use public cloud services in the future. For services destined to be cloud at some point in time, enterprises should evaluate the return on investment from developing private cloud services, while waiting for external offerings to mature.

“Many of the investments in private cloud computing will prepare the enterprise for public cloud computing. These investments are not just technology changes — they are also process, cultural and business interface changes,” said Mr. Bittman. “Making these changes sooner rather than later will help enterprises to take better cloud sourcing decisions and potentially make for an easier transition to public cloud computing.”

Enterprises also need to be aware that some IT services are destined for the cloud computing style and others are destined for more integration and intimacy with the business. Once it is established that a particular service is destined for cloud computing, then a decision needs to be made as to whether it makes more business sense to wait for a mature cloud service to appear or to develop private cloud services sooner.

“Each cloud service will have a different road map for the future — some should be focused on tighter integration, intimacy customization and differentiation for the business,” Mr. Bittman said. “Others should be focused on independence, easy interfaces, standardization and eliminated customization and are therefore potential cloud service candidates.”

In order to make these choices, Mr. Bittman said that large enterprises will need to create dynamic sourcing teams that make day-to-day decisions about sourcing. These teams will orchestrate the services in the cloud to meet business needs and, as such, will need to be business and technology savvy.

Smaller businesses are unlikely to have the skills needed to orchestrate cloud services efficiently and instead will use service brokers that will take responsibility for the overall service-level requirements in the business. They will likely be skilled in specific industries and will be able to monetize their value by having deeper skill in the cloud market than small businesses can muster, and by leveraging a rapidly changing market to continue to find the best deals to keep costs as low as possible.

Mr. Bittman highlighted the following three-point action plan for CIOs and infrastructure and operation leaders as they contemplate the future of cloud services in their organizations:

Experiment with the cloud and discover where it is already taking place in the enterprise
- Lead a cross-organization cloud initiative

Next 90 Days
Use virtualization as a catalyst to drive IT modernization
Portfolio your services
- Develop strategies for services and private cloud
- Identify new opportunities for the enterprise that are emerging due to cloud computing

Next 12 Months
Develop an overall cloud computing strategy
- Build a dynamic sourcing organization

Gartner YouTube Channel
Additional comments from Mr. Bittman are also available on the Gartner YouTube channel at Additional videos are available at

GartnerData CenterConference
Mr. Bittman is providing additional analysis on cloud computing at the Gartner Data Center Conference taking place December 1-4 in Las Vegas. The Gartner Data Center Conference is the most comprehensive compilation of sessions and advice on the future of the data center ever held. It offers the latest actionable insights and best practices in all areas affecting the data center — real-time infrastructure to servers and storage to business continuity and disaster recovery. Additional information is available at

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