I am assuming a "Tectonic Shift" is another term for "Game Changer" which has been over used by Tech Geeks to describe Major new shifts in Techland.
Cloud Computing Moves Into New Growth Phase
By J. BONASIA, INVESTOR'S BUSINESS DAILY Posted 03/28/2011 06:18 PM ET
Web-based cloud computing is transforming how tech resources are bought and used. Cloud-based software makers should grow three to five times faster than traditional firms over the next several years, analysts say.
Channel checks show demand is ramping up for cloud-based software players, including leaders such as Salesforce.com (NYSE:CRM) .
"Cloud vendors are growing organically a lot faster than traditional software companies," said Brian Schwartz, a ThinkEquity analyst.
Giants like Microsoft (NASDAQ:MSFT), Oracle (NYSE:ORCL) and SAP (NYSE:SAP), rethinking how and what they sell, are unveiling their own cloud products. But "the cloud model is very cannibalistic to the business models of legacy software," Schwartz said.
Last year's "bubbly optimism" has translated into real demand for cloud computing in 2011, says Brian White, a Ticonderoga Securities analyst. After the recent Cloud Connect event, he wrote, "Our checks at the show highlight an acceleration in growth."
Global cloud-based software applications sales should grow 15.8% a year, to $16.5 billion in 2014 from 2010's $9.2 billion, says market tracker Gartner. It sees on-premise software rising 5.3% a year, to $110.1 billion in 2014.
Overall cloud services, including hosted data centers and backup storage, should grow 16.6% annually to $148.8 billion by 2014.
Traditional software firms have long sold licenses that turned into future revenue for maintenance and upgrades. That helped lock in customers who made costly software and hardware investments.
Clouds offer flexible resources that clients can scale up or down as needed. Users get programs over the Web from hosted data centers on a subscription basis, paying only for what they use.
The switch to the cloud and the mobile Internet marks a "tectonic shift" to a "technology supercycle," said Mark Murphy, a Piper Jaffray analyst. He sees the cloud software market growing 23.9% annually over five years vs. 4.7% for the broader software sector.
He says Facebook and Amazon (NASDAQ:AMZN) Web Services prove that cloud computing can perform robustly on a massive global scale.
In a March 3 note, he calls Salesforce his top cloud software pick.
Salesforce CEO Marc Benioff calls this the start of the "Cloud 2" era. Lower costs and faster deployments fueled the first wave, he says. Cloud 2 focuses on more social, mobile and open features.
Salesforce launched its Chatter service last year, with user profiles and online forums for content-sharing. Colleagues can use it to team up on sales leads and marketing plans.