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Storage vendors still forecasting heavy cloud cover

If you think the hype about cloud computing has peaked, think again.

Vendors who build their hardware and software around cloud computing say it has a solid grasp on the service provider market and is getting ready to cover the enterprise.

Sajai Krishnan, CEO of cloud storage startup ParaScale, says service providers are heavyily committed to the cloud and others are coming around as they grasp its value.

“The cloud is still a fuzzy concept, despite all this religion around it,” Krishnan said “You need to spend a couple of hours talking about it, then the light bulb goes off. But for people who only read the occasional article, it still raises more questions than it answers.”

He thinks enterprises are ready to turn to clouds, initially with the help of service providers.

“It’s not either/or,” he said. “For certain large applications, we’ve seen folks roll out an internal cloud and for other things they go external. When you have an application that’s running inside an enterprise four or five years, take it out and put a VMware wrapper on it, test it and put it back into production, an IT shop doesn’t have the cycles to do that. If a service provider has the expertise to handle something like that, it drives up the value of cloud storage inside these companies very quickly.”

During his company’s earnings call with analysts Monday night, 3PAR CEO Dave Scott said the storage systems vendor is anticipating a shift toward the cloud. 3PAR has long billed itself as a utility storage company and counts service providers as large customers.

“We believe that we are in the midst of major secular trend with cloud computing as an ultimate replacement of much of the information technology that is currently owned and operated by enterprises,” Scott said.

For now, much of that trend is driven by service providers.

Tier1 Research pegs the cloud service market at around $300 million this year with cloud storage making up about 40 percent to 60 percent of that. Tier1 analyst Antonio Piraino says he considers storage “low-hanging fruit” among cloud services.

Krishnan says the service provider market is starting to split into three areas. One is the mass-market cloud service providers such as Amazon S3, Google, and Rackspace. The second area is smaller providers who combine virtualization, multi-tenant storage clouds and private hosted clouds. The third segment consists of the large telcos such as AT&T, etsVerizon Business, and Deutsche Telecom.

“Service providers are beyond the confusion and in the fourth quarter you’ll see a whole slew of announcements around cloud services,” Krishnan said. “They know the technology. On the enterprise side, there’s still a lot of confusion. When you talk about cloud, Amazon comes to mind first.”

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