Nearly three in four (74%) small and midsize businesses (SMBs) will increase their spending on cloud-based software in 2011, according to a recent survey conducted by Egnyte.

Over half -- 51% -- of SMBs, meanwhile, will bump up their budgets for collaboration software this year. Egnyte, which sells storage, backup, file sharing, and other Web-based services, polled 125 of its resellers on the 2011 spending plans of their SMB customers. The survey was conducted online earlier this year by Zoomerang.

Those rather rosy outlooks for the year ahead could turn even brighter: 44% of respondents to the collaboration software spending question said "I don't know," while just 6% answered a definitive "No." (Egnyte rounded up the final percentage breakdowns in its report, which results in a total of 101% for the collaboration question.)

If your not familiar with Gartner's Hype Cycle this is a great read. 

 The annual 2010 Gartner technology hype-cycle report is out - and wouldn't you know cloud computing, cloud-web platforms and private clouds are all at or near the top of the peak of expectations section of the curve.

Now to be clear - Gartner, which is focused on large enterprise IT departments , uses the term cloud computing a bit differently than I do on this blog - they generally mean the idea of large IT CIOs using "iron in the sky" like Amazon EC2 as a place to run their computing workloads instead of on servers in their own data centers. Gartner rates Software as a Service applications like Intact and Salesforce much closer to the plateau of productivity.

What is interesting to me in this is the speed of adoption that Gartner are predicting for cloud computing - note that most of the other dots for technologies at the top of the "peak of expectations" are dark blue, meaning it will take 5 to 10 years for them to become mainstream (Remember - to Gartner mainstream means even information technology laggards will adopt - so mainstream really does mean ubiquitous). But all the various permutations of cloud computing carry light blue dots - mainstream in 2 to 5 years.



Now remember that all of this is for large enterprises - the benefits of Software as a Service and cloud computing are far larger for small and midsized businesses than they are for giant corporations. This is because large corporates operate at sufficient scale that they can gain some of the operating efficiencies that the large cloud vendors accrue. The beauty of cloud computing for small and midsized businesses is that they can tap into those very same efficiencies - that's why I call cloud computing the great democratizer - offering SMBs cost and operational benefits formerly only available to large enterprises.

What's the bottom line - Gartner is predicting cloud computing will be mainstream in the large enterprise in 2 to 5 years. That says you should come in with a skeptical eye and beware the hype - but at the same time you should start piloting now or risk getting left behind your peer companies that are already jumping in with both feet.

Where would I be the most skeptical - with legacy software vendors that are offering up hosted versions of their old on-premises applications on Amazon or Rackspace that you access via Citrix - and calling this cloud computing to try to take advantage of the cloud computing buzz. Going this route will put you right into the trough of disillusionment...

For the orignal article by Daniel Druker - click here

 Now with all types of Software-as-a-Service alternatives in the market today, one tip that separates the winners from everyone else is the ability to create a product that is truly viral.  Granted several of these companies listed above offer consumer-oriented offerings, not traditional enterprise or corporate software there are examples like Yammer, were large organizations have very quickly adopted their products because the internal usage spreads like wildfire.  I profiled Yammer and they are definitely an organization that has built its sales and marketing model on being viral.

Here are some tips when thinking about incorporating viral adoption into your product and business strategy:

What portion of your revenue comes from SaaS offerings? How do you expect it to grow?

Globally, our SaaS business constitutes 5-10 percent of our revenue. We expect this to grow to 10-15 percent in the next couple of years. IDC has predicted a growth of 27 percent in the Security-as-a-Service (SaaS) market over the next five years, so we also expect similar growth in our SaaS revenue. The on-premise market is growing at roughly 10 percent. Thus, the SaaS market is growing three times faster than on-premise, offering opportunity for our partners and us.

How are you taking SaaS to the market? How do partners benefit from this offering?

A recent report released by Zinnov Consultancy states that cloud services in India will be worth $1 billion by 2015, while an IDC survey reveals that 87.5 percent of users surveyed cited security concerns as the primary issue in adopting cloud-based services. McAfee plans to leverage its comprehensive SaaS portfolio of cloud-based security services along with its global threat intelligence network to help make the broader cloud computing ecosystem more safe and secure. As in the case of our other products, we will be using channel routes to bring this product to the market, and will therefore look at adding a few channel partners in the near future. Partners will be entitled to similar margins and benefits from McAfee.

With cloud computing being predicted to have a growing impact on business activities in organisations of all sizes over the coming years, CIOs are pooling their knowledge and resources to explore the opportunities offered by cloud technology.

At a recent conference in Bengaluru hosted by IBF Media, CIOs of around 30 organisations discussed various aspects of cloud computing, including how companies can define successful business models based on the emerging technology.

The experts outlined how cloud computing has become increasingly accepted by enterprise-level customers, after making its initial mark among small to medium sized businesses (SMBs) looking for lower-cost solutions for hosting their IT services remotely.