What are the main drivers of cloud service adoption?

Cloud services are usually categorized in SaaS, PaaS, IaaS. SaaS - Software as a service. May be the first place to look at for a SMB. You can look for the tool suites you need and impement them in seconds. The great advantage is that you have to pay per user seat. So it is really "easy" to see how much it will cost per month/year. You need to know that it exists already some SaaS ecosystem that could be leveraged by an SMB. The main ones are provided by Salesforce, Google, Microsoft, Intuit, etc. An ecosystem provides you a set of applications already integrated, making the user administration easy. To use SaaS software it is recommended to think first of user provisionning/de-provisionning and of data I/o (and backup). PaaS: use it if you are developping your own apps and need to deploy on cloud platforms. Choice of the PaaS platform is mainly depending on the programming languages you use. The key actors are: Google: Google AppEngine latest release, with 1.4.0 SDK.  This SDK offers a Channel API, a bi-directional channel for communicating directly with user browsers by pushing notifications directly to the JavaScript running on the client, eliminating the need for polling). Android, Chrome OS, and Chrome Store will also be game changer in 2010. Heroku (bought by Salesforce), Engine Yard, Morph Labs, and PoolParty will target the Ruby language developer community offering them dedicated PAAS solutions. Read DigitalHobbit’s more in-depth review of some of these Ruby-specific PaaS offerings. Microsoft Azure Compute Service...  with its impressive marketing power and its still amazing killer development IDE Visual Studio that integrates just fine with Azure. Microsoft also target PHP developers ... http://Force.com. Developers familiar with Java  or C# could use it easily. The platform was well  suited for businesses looking to develop business applications   that could easily integrate with the SaaS tools. But since this year, a  real platform did emerge to support more company  online services. Now you can benefit from: appforce ("the fastest way to build enterprise apps"), siteforce ("the fastest way to build data-rich websites"), VMForce ("the fastest way to build enterprise Java apps" based on SpringSource), ISVforce ("the fastest way to bring commercial apps to market"). Niche players also exist like WSO2 Stratos in alpha version offering only some specific services (identity service, portal service, gadget service). No big player yet for PhP PAAS, but interesting solutions from CloudControl, Baobapp, etc. JoyEnt’s Smart Platform is an open source, Javascript-based PaaS. Tibco Silver Queue based messaging systems: Integration Platform in the cloud Iaas: Use only if you want to replace your datacenter services by a set of services provided in the cloud (CPU, Storage, Caching, etc.). Here you can look at Amazon AWS, and Rackspace are the major ones.

Not necessarily cost reduction, but the option of pay-as-you-go, meaning you only incur costs once you get the benefits. Costs may be actually higher, but when they happen, you already have a positive effects from savings to a positive bottom line. And the second factor is hassle-free-operation. When you use Enterprise software in the classical way, you typically need to have some kind of IT department (size depending on company size), and they need to be proficient in the software packages. SaaS computing removes that issue, as you buy the service and other people keep it running.

I agree with Axel. It is typically not a cost savings in the long term, but for a lot of companies it is useful to turn a capital expense into on operational one for several possible reasons. Another driver here though are the developer companies. Over time many software vendors are essentially saying "If you want to use our software, you'll use it in the cloud." And then proceeding to build a value proposition to back that up. Think Salesforce here. I don't think their value prop is that they are in the cloud. That's just a delivery model. While their access anywhere model is great, it is the fact that they've built a great product with an extensible architecture that happens to run in the cloud that has made them successful. It could be argued that they couldn't have built that architecture except for the cloud but that's secondary. Microsoft is pushing this as well. You can watch Microsoft's pricing plans to understand what products they want to see primarily running in the cloud. They have their SPLA (Service Provider Licensing Agreement) that SAAS providers use to license MS products to provide them from a centralized architecture. When MS wants to see a product pushed to the cloud (Exchange, Sharepoint, etc) they lower the SPLA pricing dramatically to provide pricing incentives for companies to access those products that way.

The main driver as I see it is the consumerization of an extensive array of powerful business and productivity tools. Restated - it is the self-service aspect of cloud services that allow people to seek out and activate a service they need without human intervention or the necessary to get IT resources allocated.  And, when they are done, the can shut it down.

From my point of view, I would say the flexibility and agility we get from the cloud plays the major role in driving the adoption. http://bit.ly/1kG8CTR