(5/8 – Updated numbers below)
At the Gartner Outsourcing and Vendor Management Summit in Las Vegas there was a substantial amount of discussion regarding the size of the market for Cloud Computing. Gartner pegs the 2008 number at a rather lofty $46 billion, going to $150 billion by 2013.
I spoke with Gartner analyst Ben Pring (leading a session on Cloud), and he indicated that about half of that number is spending on Google AdWords. Say what??? That’s right, the people at Gartner consider media buying for Google AdWords a “business process” that is cloud-based. They also include ADP’s hosted payroll service and any ASP-delivered or SaaS offerings.
Pring seems like a good guy, and he claims he’s not the one responsible for this number, but this really goes against credibility for the Gartner community. When I asked Pring about IT’s involvement in AdWords, he didn’t have a clear answer. I have one – virtually none.
Global 2000 companies buy all media through agencies, and that includes AdWords. They may receive reports and have some management ability through a collection of online ad management tools. But marketing executives at P&G, GM or Wal Mart typically don’t spend time on the Google site playing around with keywords – that’s an outsourced activity.
The SaaS market he quoted at about $5b or so (UPDATE: Gartner release as of yesterday – $6.6B 2008 going to $9.6B 2009). If you add in all of the pure-play cloud stuff and PaaS vendors like Salesforce and Intut (QuickBase), you might be able to get to $20b. $46b is just a ridiculous number and will confuse the heck out of enterprise IT buyers.