Recession is good news for cloud computing

The global recession could be good news for the cloud computing industry, delegates at VMworld 2009 have been told.

"The best thing that ever happened to the cloud was the downturn in the economy," said Manuel Medina, founder of cloud services company Terremark.

"People see it all working at a fraction of the cost, and call the chief information officer and say 'is it true?' that they can save so much money."

Medina claimed that the past three months had seen a huge increase in the number of companies signing up for cloud services, and that there is strong interest from the federal government.

Other delegates suggested that the total cost of ownership savings offered by cloud computing are attracting companies to the idea, and that the industry is beginning to allay fears about handing over valuable data to third parties.

Shrinking IT budgets, meanwhile, have prompted many IT managers to look for any possible way to maximise cost savings, according to Raghu Raghuram, vice president of server business at VMware.

"As customers cut down on projects, virtualisation is one of the projects left on the table," he said. "However, they have tended to scale down virtualisation investment once they have got enough cost savings."