But big companies have embraced the cloud more slowly than its fans had expected. IDC, a research firm, estimates that businesses will spend $100 billion on cloud computing this year. That is not to be sniffed at. But it is a fraction of the $2 trillion or so that companies will spend on information technology (IT). Some are holding back because their IT teams claim they can run things more cheaply internally. Others are wary of entrusting sensitive data to another firm’s servers.
Such corporate reluctance may soon start to be overcome, as price cuts make cloud computing cheaper still. At the end of March Google slashed prices by between 30% and 85% on cloud services such as application processing and data storage. The move—aimed at boosting Google’s own cloud-computing business—sparked a swift response from AWS, which cut some prices by up to 65%. Microsoft, which is also determined to be big in the cloud, followed suit with cuts of its own.