8/8/2019 Cloud.computing Intro[1]

1/4

COMPUTI

I

IntroductiontoCloudComputing(inabout1,000Words)

By Timothy Chou

8/8/2019 Cloud.computing Intro[1]

2/41Volume 1, 2010: Issue 7

hen someone asks youwhat cloud computing

is, it may seem difcultat rst to explain it. Butby the time you nish

reading this, you shouldbe able to explain it to your Facebook friends. Firstof all, everyone who shops on Amazon or searcheson Google or posts on Facebook is using the cloud.These consumer applications are simple examples.

8/8/2019 Cloud.computing Intro[1]

3/42

Volume 1, 2010: Issue 7

Network Cloud ServiCeS

What you may not have thought about is that ev-ery one of these consumer application cloud ser-vices uses network cloud services. In fact, the wordcloud comes from the fact that many years agothose of us who built and sold client server applica-tions, software and hardware used to draw a pic-

ture with the PC connected to a network and thenetwork connected to a server. Since none of usactually understood how the network worked, wedrew a cloud and labeled it network and left itat that. In those days companies built their ownnetworks, but today consumers and businesses usenetwork cloud services delivered by companies likeAT&T, Verizon, Masergy and Sprint.

data CeNter

Cloud ServiCeS

Since the Network Cloud Service providers had tobuild buildings that had high-qualitypower and were physically

secure, it made sense for them to begin to offerdata center space for these emerging consumerapplication cloud services. In the early days it mademore sense for Google to use Savvis to provide datacenter space. Today, companies like Twitter, Face-book and OpenTable continue to rely on data cen-ter services provided by companies like Savvis, NTT,Terremark, and others. Of course, anyone who be-comes a student of the cost of computing comes

to realize that the cost of power is a big driver. As aresult, anyone who needs space for 100,000+ com-puters (e.g., Google, Amazon, Microsoft) is buildingdata centers located near low-cost and reliablepower.

appliCatioN

Cloud ServiCeS

So far weve focused on consumer applicationcloud services, but for the past ten years the fast-est-growing business applications have all beendelivered as cloud services. Since 1999, fteencompanies that deliver business application cloudservices have become public companies. These f-

teen include Concur (1999), Webex (2000), Kin-tera (2003), Salesforce.com (2004), RightNowTechnologies (2004), WebSideStory (2004),Kenexa (2005), Taleo (2005), DealerTrack(2005), Vocus (2005), Omniture (2006), Con-

stant Contact (2007), SuccessFac-tors (2007), NetSuite (2007),

and OpenTable (2009).

Some of these compa-nies have been acquisi-tion targets. Webex was

acquired by Cisco inMarch 2007 for $3.2B.Blackbaud purchasedKintera in 2008. Om-niture acquired Web-SideStory, and most

recently Omniture itself

was acquired by Adobein October 2009 for $1.8B.An informal analysis of fortyof the Fortune 100 showed

only two companies thatdid not have at least

one of these applica-tions running. Of coursetoday, nearly all tradi-

tional application soft-ware companies like Ora-

cle and JDA offer to managetheir applications as a service.

8/8/2019 Cloud.computing Intro[1]

4/43Volume 1, 2010: Issue 7

Compute & Storage

Cloud ServiCeS

The cover story in Business Week in November 2006was titled "Jeff Bezos Risky Bet" [1]. The article fo-cused on Bezos vision of transforming the Internetretail giant into a cloud service provider. While hemay have known it would be a success, rumors

abound barely four years later as to how big thebusiness is. But its clear its been a tremendous suc-cess. Not only did Amazon's EC2 and S3 pioneer asimple way to create, launch and terminate serverinstances and storage objects, but also the trans-parency (and low price of less than $0.10 per hour)open up numerous use cases. While pioneered byAmazon, compute cloud services are now avail-able from an ever-increasing number of playersincluding Microsoft, EMC, Terremark, Rackspace,GoGrid, Joyent, Layered Technologies and manymany others.

Of course compute & storage services have beenused by high-growth, newly founded Web-basedcompanies. Examples include Gilt Groupe, whichauctions high-end fashions and in a few years grewto a $300M business running all of its computers onthe Joyent compute and storage cloud services; orContext Optional, which runs social media market-ing campaigns on Facebook and hopes to growas fast. In a completely different application, Path-work Diagnostics uses thousands of Amazon com-pute servers to run machine-learning algorithms fora few months to produce better tumor diagnostics,

then turn the servers off. If you thought about doingthis the traditional way, the costs and capital outlaywould be prohibitive.

We are only at the beginning of whats possible.In 2010, $3,000 will buy a single computer for morethan three years running in a high-quality data cen-ter 24x7, which is good. But $3,000 will also buy 1,000computers for more than a day. No one has everhad that capability before.

platform Cloud ServiCeS

This brings us to the last group of cloud servicesPlatform cloud services. Platform cloud services areused by software developers to build new applications and by operations managers to manage theiapplication, compute and storage cloud services. Platform cloud servers for software developers

range from horizontal services like Microsofts Azureor Herokus Ruby on Rails platform to the more vertical platforms like NetSuites SuiteCloud, Salesforcesforce.com or even Facebooks platform. Horizontaplatforms offer a great deal of exibility, but if youknow you want to leverage NetSuites schema tobuild an MRP application, like Rootstock did, thenchoosing a particular vertical app can signicantlyspeed the development and reduce the cost tobuild new applications.

Platform cloud services also provide the operationsmanagement specialists with a range of services

This could include spam ltering from Postini all theway to a new generation of software that could beused to develop private compute & storage cloudservices. CAs 3Terra, cloud.com, Nimbula, andCloudera are just a few of the emerging new platform products.

a Next wave

The last major wave of business computing wasknown as client-server computing. It was driven bya major shift in the economics of hardware and software and gave rise to many companies we consider today as the tech industry names like Intel,Oracle, EMC and Microsoft. Names like CDC, PrimeData General and DEC have all but faded into thepast. This next wave of computing, cloud computing, is creating another major shift in the economicof hardware and software. Who will we be talkingabout ten years from now?

[1] Jeff Bezos' Risky Business, BusinessWeek November 13, 2006, http://bit.ly/8ZfR9k.