If the recent feverish popularity of netbooks hadn't given you any indication of the permanence of cloud computing, Google's recent announcement should help drive the point home. Most of us internet users use various clouds (e.g. GMail, Facebook) all the time without even realizing it -- part of the beauty of the cloud. As a user, I don't need to worry data storage, program installation, or the risk of equipment failure. I can let specialized organizations manage all those decisions for me, and focus on my priorities. Many businesses are doing just that.
While some are still questioning whether cloud computing it just the latest tech buzzword soon to be fitted with the prefix 'e' or the update '2.0', the computer and business world are seeing cloud computing as a major factor in their respective industries. You want to build your own cloud? Thank goodness for capitalism. Major hardware companies like Dell are pushing infrastructure solutions, while IBM and HP offer blended hardware and software packages. But why own a cloud when you just want to use one? I don't want to buy a chicken, just because I want a few eggs.
Enter Amazon Web Services(AWS), a clear front-runners of cloud computing. AWS has set up a host of offerings enabling individuals and businesses to buy ad hoc computing power and select services. Most obvious is the ability for large corporations to take advantage of the cloud and simplify their IT management, increase workplace collaboration, and better manage their IT spending. But it's really the cash-conscious start-ups that are able to catapult their offerings by leveraging cloud technology.
A great example of this is Animoto's launch of their Facebook application in April 2008. Within a few days 750,000 signed up for the service. Fortunately for the employees, they did not have to stay up day and night installing additional capacity or sit in front of a microwave nuking up hot pockets to fuel said late night installs. Animoto's founders didn't have the money or the expertise to run a server farm, so they signed up with AWS for 50 virtual machines. With the demand spike from the Facebook application launch, they were able to ratchet that up to 3,500 virtual machines with nothing more than a phone call. When the demand subsided, they throttled back the number of virtual machines.....and the cost.
We see the cloud providers as clear winners in this, leveraging economies of scale and smoothing demand across users to turn a profit. Business users benefit as well by joining a cloud as they can be faster to market with IT capabilities, leverage n level technology, and turn Capex into Opex. What's the catch? With the centralization of data and lack of physical storage ownership, privacy becomes more of an issue. While not a roadblock yet, there is much room for though leadership in this area. Perhaps this is a topic for another post.
Thanks to the cloud, market barriers just got a little bit lower. Now, let the competition begin.
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