Animoto, a Web based video startup based in New York, gives a free video presentation to anyone who signs up for its service, was getting hardly 5,000 hits a day till mid-April this year. But after that, when Facebook users went into a small frenzy over the application, a whopping 750,000 people signed for Animoto’s service in just three days.

To satisfy that leap in demand with servers, the company would have needed to multiply its server capacity by nearly 100-fold. And the founders had neither the money to build significant server capacity nor the skills to manage it. Instead, they decided to add capacity from Amazon, at the cost of about 10 cents a server per hour, as well as some marginal expenses for bandwidth, storage, and some related services. While there were initial hiccups - it was a huge spike even for Amazon - none of them was a major one. And when the demand slowed, Animoto automatically lowered its server use, and its bill. Animoto also received an unforeseen benefit. That was a starting point for Amazon, which decided to invest in it to start a new business called Web Services, offering the service of storing client's data in Amazon's data centers, i.e., cloud computing. However, the core concept of cloud computing began as early as in the late 1990s, with the dot com boom. But serious adoption began around 2003 and it has been growing ever since, principally in 2008.

Are you there over the clouds now?
Today, this has become a popular starting point of chats between IT guys or entrepreneurs in technology conferences. Cloud computing is the jargon of the moment in the technology industry. Today it's a foregone conclusion that the technology isn't just a marketing hype. Many industry experts believe that cloud computing represents the future of the IT industry.

When people talk about 'plugging into the IT cloud', they generally have something very simple in mind - browser access to an application hosted on the Web. Cloud computing is certainly that, but it's also more than that. However, conceptually, is it really anything more than the newest buzzword for the old ASP (Application of shareware professionals) model. Says an analyst, "The technology isn't necessarily new, but it is comparable to what Apple has done with the iPod." The iPod, as one can recall, wasn't the first MP3 player. What it did was making buying online music easy in a better and cheaper way, by delivering enterprise IT. Cloud computing is like the iPod in that, as it makes obtaining virtual computing services easy. It’s just another form of virtualization.

Google, IBM, Microsoft, Yahoo, Amazon, and Salesforce.com are just some of the big companies talking up about cloud computing, and there are bunches of smaller ones too. Wipro is also trying to leverage this lucrative opportunity and plans to start offering services around it. Some analysts say cloud-computing represents a sea change in the way computing is done in corporations. Merrill Lynch (MER) estimates that within the next five years, the annual global market for cloud computing will surge to $95 billion. In a May 2008 report, Merrill Lynch estimated that 12 percent of the worldwide software market would go to the cloud in that period. Hence, those vendors that can adjust their product lines to meet the needs of large cloud computing providers stand to gain. According to Peter Coffee, Director - Platform Intelligence, Salesforce.com, the market for cloud computing is growing three times faster than the rest of the service markets. "Salesforce.com has several customers from India belonging to various segments such as healthcare, retail, and others," he says.