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Cloud Computing Promises a Power Grid for the Net

Posted on: Monday, 26 May 2008, 06:00 CDT

By Michael Fitzgerald

Cloud computing is the flavor of the moment in the technology industry. Google, IBM, Microsoft and Yahoo are just some of the big companies touting the concept, and a bunch of smaller ones are, too.

What, you may be thinking, is cloud computing? Basically, it means obtaining computing resources - processing, storage, messaging, databases and so on - from someplace outside your own four walls, and paying only for what you use.

The term is a mushy one being applied loosely to many things on the Web. Salesforce.com is now called a cloud application - after all, companies let it store their sales data, rather than running it on their own systems. Facebook, too, is a cloud platform, because software developers write applications for the site and distribute them on it.

Then there is the infrastructure cloud, where companies offer up their servers, storage and other technology to anyone who can pay for it. Previously, that was called grid or utility computing, because you tapped into it as you needed it, as you would with the power grid, and paid only for what you used. In the early days of computing, it was called time-sharing.

Thus, the concepts themselves are not new. "It's true that we did not invent storage, databases, computers or database functionality," said Andrew Jassy, senior vice president of Amazon Web Services, a unit of Amazon.com that started in 2006 and was a pioneer in this new round of pay-as-you-go infrastructure services. Amazon, though, does not call its cloud a cloud, except for one service called the Elastic Compute Cloud.

What looks to be new is the way high-speed Internet access and almost limitless supplies of storage and processing power can now be pulled together.

A vivid example of cloud power comes from Animoto, an 18-month- old company in New York that lets customers upload images and music and automatically creates customized Web-based video slideshows, which many people then share with friends. Animoto gives a free video presentation to anyone who signs up for its service, and earlier this spring about 5,000 people a day were trying it.

Then, in mid-April, Facebook users went into a small frenzy over the application, and Animoto had nearly 750,000 people sign up in three days. At the peak, almost 25,000 people tried Animoto in a single hour.

To satisfy that leap in demand with servers, the company would have needed to multiply its server capacity nearly a hundredfold, said Stevie Clifton, a co-founder of Animoto and its chief technology officer.

But Clifton and the other co-founders had neither the money to build significant server capacity nor the skills - and interest - to manage it.

Instead, they had already worked with RightScale, a cloud services firm in Santa Barbara, California, to design their application for Amazon's cloud. That paid off during the three-day surge in growth, when Animoto did not buy or configure a single new server. Instead, it added capacity on Amazon, at the cost of about 10 cents a server per hour.

While there were hiccups - it was a huge spike, even for Amazon - none of them were major. And when demand slowed, Animoto automatically lowered its server use, and its bill. Animoto also received an unforeseen benefit: in May, Amazon.com decided to invest in it.

Combining the ability to rapidly shift capacity with a new distribution and marketing channel like Facebook is what makes the cloud exciting for software entrepreneurs, said Simeon Simeonov, technology partner at Polaris Venture Partners, a venture capital firm in Waltham, Massachusetts. He said that anyone who worked with software could use a cloud service to cheaply and quickly test an idea.

That is even true for companies that are not in the software business. Simeonov said he knew an executive at a financial services firm who had used a cloud computing service to test a concept that was not provided resources by his company's information technology department.

Traditional companies are also beginning to adapt their computing infrastructures to the cloud. Reuven Cohen is founder and chief technologist at Enomaly, a software company based in Etobicoke, Ontario, that helps companies do just that.

While most of its clients are technology businesses, Cohen said Enomaly was working with a bank based in New York that relied on cloud computing to develop and test applications. He said that another customer was a large entertainment and media business that used the cloud to process video.

He sees this kind of need-driven use as a "fundamental change in how we manage technology."

In fact, cloud computing is poised to do for technology what the electrical grid did for power, said Nicholas Carr, author of "The Big Switch," which compared the rise of the cloud to the rise of electric utilities.

The electrical grid streamlined operations for companies; when every home had cheap power and outlets, "you had incredible innovation in how to put all that cheap power to use," Carr said. He said cloud computing would prompt a similar cycle over the next decade.

There are practical problems that could turn the cloud into a thunderhead. Most cloud infrastructure is still emerging: Amazon's Simple Storage Service, or S3, went offline for a couple of hours in February.

Peter O'Kelly, an analyst at the Burton Group, a technology research firm, said many established companies would not save money by moving to the cloud.

And Alistair Croll, a partner at Bitcurrent, a consulting firm that specializes in Web and cloud technologies, said companies would not be able to put data willy-nilly into the cloud because of privacy and security concerns.

At the same time, the cloud is here to stay, Croll said. "The Web has become the interface" for computing, "the 110 AC outlet," he said. That is a fundamental shift that could power a new cycle of technological innovation.

Source: International Herald Tribune

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