By Raju Chellam

IF YOU think the cloud is still hazy, think again. Worldwide cloud services revenues will cross US$68 billion this year, up 16.6 per cent over 2009. By 2014, global cloud services will reach US$148.8 billion in revenues, growing at a 21 per cent annual clip between now and then.

That's the view from research house Gartner Inc. 'We are seeing an acceleration in adoption of cloud computing and cloud services among enterprises,' says Ben Pring, a Gartner research vice- president.

'Multi-thousand-seat deals are becoming common. More progressive enterprises are thinking through what their IT operations will look like in a world of increasing cloud service leverage. This was highly unusual just a year ago.'

Over the next five years, companies will spend US$112 billion cumulatively on SaaS (Software as a Service), PaaS (Platform as a Service), and IaaS (Infrastructure as a Service) combined, Gartner says.

'After many years of germination, the core ideas of cloud computing - such as pay for use, multi-tenancy and external services - appear to be resonating more strongly,' Mr Pring says.

'The financial turbulence of the last 18 months is forcing companies to scrutinise expenditure. An IT solution that can deliver functionality less expensively, and with more agility is hard to ignore.'

In terms of market potential, North America and Europe are the largest markets for cloud services now. The US share of the global cloud services market was 60 per cent in 2009 but will drop to 50 per cent by 2014.

Western Europe will account for 23.8 per cent in 2010; and Japan, 10 per cent. By 2014, Britain will form 29 per cent - while Japan will represent 12 per cent - of cloud services revenues.

'There is no evidence yet to support the claim that developing countries will leapfrog Western markets in cloud services,' Mr Pring says.

'Although interest in cloud computing has grown, many enterprises still have strong concerns.

Security is primary among these, followed by availability of service, vendor viability, and maturity.'

This article was first published in The Business Times.