April 6, 2012

Virginia Business: Cloud Computing Brings Growth to Virginia

Flying High - Cloud Computing brings growth and new jobs to Virginia companies.

By: Garry Kranz Once a nebulous idea, Cloud Computing is moving from mystery to mainstay for many businesses, nonprofits and government agencies. A study out last month by research firm International Data Corp. said spending on cloud services will generate nearly 14 million jobs worldwide by 2015 and generate as much as $1.1 trillion a year in new business revenue, with the private sector pushing the biggest gains. Experts say the methodology will forever change how organizations purchase, store, manage and use computing resources. Here's why: Physical data centers are costly and provide finite capacity, meaning companies eventually will need additional facilities. Cloud Computing, conversely, enables organizations to offload costs to a hosting provider. It provides a "pay-as-you-go" model via the Internet to increase or decrease processing power. Momentum for cloud computing has been building for decades. IBM Corp. introduces timesharing in the 1970s, whereby multiple users could share capacity and memory on a single mainframe computer. Today, the newest iteration is shared services," in which organizations lease software, network infrastructure and technology platforms, typically for a monthly fee. Cetrom Information Technology Inc. in Vienna launched a "hybrid" cloud service five years ago. The term refers to an arrangement in which customers choose to retain control of certain applications and authorize Cetrom to secure and maintain other specified data.

The response has been significant. Three in four of the company's IT customers have moved some portion of their data to a cloud environment, says CEO Christopher Stark.

In fact, the uptick helped Cetrom close 2011 with year-over-year revenue growth of 35 percent, the fifth consecutive year with a double-digit increase.

"Our growth is due entirely to the acquisition of new Cloud customers," says Stark. "We're seeing demand from companies of all sizes," from small family-run businesses to corporate employing thousands of people.

As more organizations turn to the cloud, construction of massive data centers is on the rise. The latest entrant is Sacramento, Calif.-based StrataScale Inc., set to open a 140,000-square-foot cloud data center in Ashburn in April. Nearly 50 new data centers have been announced in Virginia since 2012, generating capital investment of $3.9 billion and 1,900 in expected new jobs, according to the Virginia Economic Development Partnership. State officials predict another 20 data centers will be erected during the next decade. (more)

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