With $13 billion expected to be spent by American businesses alone in 2014, the cloud should no longer be considered an alternative IT model. The demand for hardware to run traditional infrastructures is in a nosedive. IBM is spending $1 billion this year, matching the amount it spent in 2013, on "workforce rebalancing" (the company's lingo for widespread layoffs). Cisco is experiencing a similarly negative impact, with a 4% decline in revenue for its equipment expected this year.

Despite those pieces of bad news for major technology brands, the cloud ultimately represents not closure, but change. It's been a gradual transition from the established to the innovative, in large part due to concerns over security. Cloud security experts scored a major victory in 2011 when Gen. Keith Alexander announced that the Pentagon would be deploying the new technological approach.

With more businesses sold on the cloud, development is accelerating, and the landscape is rapidly evolving. The following are five major trends that will change the shape of the cloud moving forward.

1. Real-Time Per-Second Billing: One of the most compelling features of the cloud is that you pay for resources "on-demand." However, demand has typically been defined by the maximum use per billing segment (such as each hour). However, we don't pay for electric usage for an hour when we switch off the light, and we shouldn't have to do that with the cloud either. Billing based on moment-by-moment use will cut costs drastically for large server deployments. My company has seen a significant adoption of per-second billing by other cloud hosting providers after we introduced the model (coupled with real-time usage reporting to ensure predictability) to the market.
2. Plan Standardization: On-demand billing of the cloud is enabled, in part, by the cloud's extraordinary elasticity. Despite the adaptive potential of the cloud to meet specific circumstances, users want pricing, sizes, and plans that fall within simple parameters. Just like when buying a sandwich, when we seek cloud services, we want menu items we have the option to adjust, not just a bunch of ingredients. To streamline the buying process, cloud packages will move away from à la carte pricing to bundle pricing - with all resources included, and with peak and off-peak consumption taken into account.
3. From Hard to Solid: Those who have recently explored the cloud market may have noticed the rise of the "SSD cloud." Currently limited to early adopters, the transition from the hard disk drive (HDD) to the solid state drive (SSD) is gaining traction. The SSD is considered more advanced technology because it contains no moving parts and consistently offers better performance than an HDD. Although these drives have been extant for many years, their price has (happily) plummeted, with a drop of approximately 70% between 2009 and 2012. Their total cost of ownership (TCO) has decreased as well: a broadly inclusive 2013 energy-efficiency analysis revealed 5.4 times greater power-efficiency, on average.
4. Cloud, Localized: As mentioned above, IBM's hardware business is being downsized. However, the company is shifting its focus into virtual machines distributed across the globe, with plans for 15 new SoftLayer datacenters underway. Other cloud providers are adding locations in markets around the world as well. Latency is reduced automatically with this strategy: cloud management platforms choose the available machine that's closest to the user. Other hosting companies, including Atlantic.Net, are rapidly deploying nodes in diverse geographic markets as well.
5. Leapfrogging: Research published by Pew Research this year shows that many developing countries have exhibited what's called leapfrogging with phones, jumping over landline use and straight into the cell phone era. The same process is being repeated with Web infrastructure: businesses in emerging markets are skipping dedicated servers and moving straight into cloud environments.

Beyond those five general trends, the applications of cloud hosting are expanding as well. Indiana University computer scientist Geoffrey C. Fox, PhD, has noted the vast implications for biomedical research, stating that a cloud server can perform many operations faster than a supercomputer. Cloud hosting providers are attempting to match the pace of the cloud as they adjust to user expectations and competition in this rapidly changing industry.