Economic downturn to encourage cloud computing

Cloud computing spending will increase by three times its current amount over the next five years with the economic downturn fuelling growth, according to IDC.

Investment will total $42 billion (£24.5 billion) by 2012, accounting for a quarter of IT spending growth for that year and a third of it the next.

Frank Gens, senior vice president and chief analyst at the marketing intelligence firm, cited a recent study of IT executives and CIOs as evidence that cloud computing was "crossing the chasm and entering a period of widespread adoption", with the problems in the financial world speeding the trend.

"The cloud model offers a much cheaper way for businesses to acquire and use IT - in an economic downturn, the appeal of that cost advantage will be greatly magnified," he explained.

"This advantage is especially important for small and medium businesses, a sector that will be key target in any plan for recovery."

Cloud computing refers to the concept of having infrastructure, services and software hosted on the internet (the "cloud") rather than on an individual workplace's computers.