Computing Heads for the Clouds

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Which companies are at the forefront of cloud computing?
Google's search engine and productivity applications are among the early products of efforts to locate processing power on vast banks of computer servers, rather than on desktop PCs. Microsoft has released online software called Windows Live for photo-sharing, file storage, and other applications served from new data centers. Yahoo has taken similar steps. IBM has devoted 200 researchers to its cloud computing project. And Amazon.com (AMZN) recently broadened access for software developers to its "Elastic Compute Cloud" service, which lets small software companies pay for processing power streamed from Amazon's data centers.

What's the market opportunity for this technology?
While estimates are hard to find, the potential uses are widespread. Rather than serve a relatively small group of highly skilled users, cloud computing aims to make supercomputing available to the masses. Reed, who's moving to Microsoft from the University of North Carolina, says the technology could be used to analyze conversations at meetings, then anticipate what data workers might need to view next, for example. Google, Microsoft, and others are also building online services designed to give consumers greater access to information to help manage their health care.

What are the biggest challenges these companies face?
The technical standards for connecting the various computer systems and pieces of software needed to make cloud computing work still aren't completely defined. That could slow progress on new products. U.S. broadband penetration still lags that of many countries in Europe and Asia, and without high-speed connections—especially wireless ones—cloud computing services won't be widely accessible. And storing large amounts of data about users' identity and preferences is likely to raise new concerns about privacy protection.

Haven't we heard about efforts like this before?
Every decade or so, the computer industry's pendulum swings between a preference for software that's centrally located and programs that instead reside on a user's personal machine. It's always a balancing act, but today's combination of high-speed networks, sophisticated PC graphics processors, and fast, inexpensive servers and disk storage has tilted engineers toward housing more computing in data centers. In the earlier part of this decade, researchers espoused a similar, centralized approach called "grid computing." But cloud computing projects are more powerful and crash-proof than grid systems developed even in recent years.

Business Exchange related topics:
Cloud Computing
Cloud Computing Research
Social Mathematical Modeling
Data Center Automation

Ricadela is a writer for BusinessWeek.com in Silicon Valley.