Note: The Skinny blog is written by Rick Smith, editor and co-founder of Local Tech Wire and business editor of

RESEARCH TRIANGLE PARK, N.C. – Why is “cloud computing” so hot in the information technology space other than the sharing of server and PC power on demand in a virtualized environment has already succeeded technically in slam-dunk style?

Predictions from analysis and consulting firm Gartner help answer the question quite clearly.

1. Cost savings
2. Equipment savings
3. More competition and opportunity in the IT sector

In the cloud, customers can access more computing and processing power on demand, using hardware that had been virtualized – i.e. enabled to handle multiple operating systems simultaneously.

And customers worldwide are lining up to buy – as users of the service as well as bigger firms acquiring upstarts who are driving development and implementation of cloud services.

On the acquisition side, look at the recent news:

• Windstream acquired Raleigh-based Hosted Solutions a month ago for $310 million, and one of the primary reasons cited for that deal was Hosted’s growing success in the cloud space. Rather than trying to replicate Hosted’s technical expertise in the cloud, Windstream just bought it. (The deal has already closed, by the way.)

• Red Hat (NYSE: RHT) just this week acquired Makara, a high-profile Silicon Valley cloud application and technology firm. The Hatters are driving hard for cloud business, focusing the new version of its cash-cow Red Hat Enterprise Linux version as a cloud solutions provider.

• Cisco joined the acquisition parade this week as well, buying LineSider.

IBM, EMC, HP, Dell, NetApp – all the big players – want in on cloud, too, and are making deals or adding capabilities – or both.

Here are the Gartner predictions, taken from its annual top IT predictions report:

• “By 2015, tools and automation will eliminate 25 percent of labor hours associated with IT services.

“As the IT services industry matures, it will increasingly mirror other industries, such as manufacturing, in transforming from a craftsmanship to a more industrialized model. Cloud computing will hasten the use of tools and automation in IT services as the new paradigm brings with it self-service, automated provisioning and metering, etc., to deliver industrialized services with the potential to transform the industry from a high-touch custom environment to one characterized by automated delivery of IT services. Productivity levels for service providers will increase, leading to reductions in their costs of delivery.

“By 2015, 20 percent of non-IT Global 500 companies will be cloud service providers.

“The move by non-IT organizations to provide non-IT capabilities via cloud computing will further expand the role of IT decision making outside the IT organization. This represents yet another opportunity for IT organizations to redefine their value proposition as service enablers — with either consumption or provision of cloud-based services. As non-IT players externalize core competencies via the cloud, they will be interjecting themselves into value chain systems and competing directly with IT organizations that have traditionally served in this capacity.”

The cloud acquisition frenzy is far from over. In fact, it’s really just started.

For some more fascinating predictions from Gartner, read here.

Get the latest news alerts: Follow LTW at Twitter.