Cloud Computing Is No Pipe Dream

Infotech service on demand is coming, and it's real. Just like plugging in the cord to get electricity

By Jeffrey F. Rayport

Tech pundits and practitioners alike have spilled lots of ink to hype cloud computing. They'll encourage you to think of it as IT infrastructure on demand—like plugging into the power grid to get electricity, or turning on a faucet to get water, but getting raw computing power instead. To boot, you'll get access to storage capacity and software-based services—and it can scale infinitely, proponents point out.

If this all sounds too good to be true—like so much cold fusion, the now-debunked tabletop nuclear fusion reactor in a bottle—don't be fooled. This time, getting more for less is real. And with the economy of its currently parlous condition, businesses have never needed cloud computing more.

To understand why, consider the historical perspective:

It has been nearly 15 years since Google (GOOG) Chief Executive Eric Schmidt, then chief technology officer of Sun Microsystems (JAVA), articulated a simple proposition: "When the network becomes as fast as the processor, the computer hollows out and spreads across the network."

Fast, Cheap, and Robust

Well, guess what. Today's networks are able to move data as fast, or faster, than semiconductors can process it. All that late-1990s overinvestment in high-speed fiber-optic networks has given us communications networks that are lightning fast, relatively inexpensive, and remarkably robust—capable of transforming how we access, organize, and share computing resources.

Schmidt's vision is becoming reality. And consumers, for their part, embrace it with gusto. From Facebook apps to Apple's (AAPL) iTunes, from Yahoo! (YHOO) Mail to AOL Instant Messaging, from Flickr photo sharing to YouTube video viewing, cloud services have taken hold. Hundreds of millions of consumers are computing in the cloud, with more users and more offerings added every day. That's just on the PC.

There are nearly 4 billion mobile phones in use around the world, and each phone, especially if it's a smartphone, is a small computer. These handheld machines can't do much without a smart cloud to back them up. When users tap into that cloud, they can suddenly do amazing things. That's one way to explain why just two months after Apple's midsummer launch of its App Store, iPhone and iPod touch owners had downloaded 100 million applications. By Dec. 1 the number had surged to 300 million. Third-party developers have stocked up the store with more than 10,000 paid and free iPhone apps.

Try One On for Size

Now it's time for companies to take note. And the good news is that cloud-based opportunities come in all business sizes—large, midsize, and small.

Consider a big enterprise like The New York Times (NYT). Recently the Times was looking for a way to make its archives—150 years of daily newspaper editions—available online. Digitizing so much material was only half the challenge; the storage requirements were vast. The Times archives included 11 million articles; when digitized, they would consume 1.5 terabytes of memory. The paper tried to manage the process internally, but it proved unrealistic. So it turned to Amazon (AMZN) Web Services, the online retail giant's cloud offering.

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