Are You There On the Clouds

Date:   Wednesday , November 05, 2008

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 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,, the market for cloud computing is growing three times faster than the rest of the service markets. " has several customers from India belonging to various segments such as healthcare, retail, and others," he says.

Simply put, cloud computing means obtaining computing resources - processing, storage, messaging, databases, and so on - from some place outside your own four walls, and paying only for what you use. Hence, it has become a mushy term and it is being applied loosely to many things on the Web. is now called a cloud application - after all, companies let the company store their sales data, rather than running it on their own systems. Facebook, too, is a cloud platform, because software developers write applications for it and distribute them on it.

Then there's the infrastructure cloud, where companies offer up their servers, storage, and other technology to anyone who can pay. The concept is not new, and previously it was known as grid or utility computing. "It's true that we did not invent storage, databases, computers, or database functionality," says Andy Jassy, Senior Vice President of Amazon Web Services. What looks to be new is the way high-speed Internet access and almost limitless supplies of storage and processing power are now pulled together.

The reason why cloud computing is becoming a buzzword nowadays is quite obvious. 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 have tilted engineers toward housing more computing power in data centers. In the earlier part of this decade, researchers espoused a similar, centralized approach called grid computing. Grid is essentially a cluster of computers, which are loosely coupled with each other. But the prime job of a grid is to share a distributed job load and process it aggregately. Cloud computing is also a pretty similar concept. But cloud computing projects are more powerful and crash proof than the grid systems developed even in recent years.

How it Works?
An interesting fact is that the concept of cloud computing resembles outsourcing. It could be the next step in outsourcing, believe the industry experts. Kiran Datar, Managing Director, CiscoWebex, says,"The big difference is that cloud computing is a much simpler approach that is easier for people to get from idea to application in a relatively shorter period of time." The complexity is less here. There's no need to think about software and versions of it. The whole goal of cloud computing is to make business applications as easy as buying a book on Amazon.

However, cloud computing isn't fluffy. It depends on giant deployments of hundreds of thousands of servers – pushing the limits on power and efficiency. Backups are not on a single site far away, but are at multiple sites. Interestingly, cloud computing doesn’t need one single super-robust or super-redundant server. Redundancy can be handled using software. In case a single server goes down, or a rack or a whole data center goes down, another one picks up. That is the beauty of the technology.

Will Cloud Computing Transform IT?
If we peep into what's happening in the marketplace right now, big firms are increasingly launching into 'the cloud' to sell their services, while small firms plug in, waving goodbye to the server hidden in the closet. "The future is about having a platform in the cloud," says Diptarup Chakravarthy, Senior Research Analyst, Gartner.

About four years ago, the Seattle-based Inc. began hatching the idea to sell access to its complex computer systems. The company had already built up a robust infrastructure to support the world’s largest online retail operation – so why not let other businesses tap in? Amazon launched its Web Services in 2006, and more than 400,000 developers have signed on to pay for services such as storage space, database access, and computing power.

"Over the next decade you are going to see an incredible transformation, in my opinion," Amazon Chief Executive Jeff Bezos told shareholders earlier this year. "It doesn't really make sense for most companies to have their own data centers, just as it doesn't make sense for most companies to produce their own electric power."

With information technology budgets at organizations shrinking, IT managers are forced to look into new resources. "Cloud computing is the trendy thing right now," says Datar. Hence, 'cloud computing' conjures up the image of something being very fluid and being very flexible.

"The benefits of the cloud are not only time-to-market but also pay-as-you-go type of model," says Coffee. It has bigger implications for business innovation as well. For instance, using's free service, any developer with a computer and an Internet connection can build a business application without spending a dime. "And that's how the technology could transform the entrepreneurial eco-system," believes Chakravarthy. Well, history shows us that the most disruptive and market changing technologies are the ones that enable a broad class of people to do what, previously, only an elite class could do. "Cloud computing is certainly such a disruptive technology," says Coffee.

Today, IT infrastructure in an organization is very expensive, it’s difficult to implement, and it’s highly complicated. It's hard to find people with that expertise and make it affordable and reliable. But you don't need to run a business with an overburdened IT department to see the promise of cloud computing. Apple just got the message with its new personal application suite, MobileMe. But Google has been on board for years with productivity and communications appli cations like Gmail, Google Reader, and its online calendar. For instance, all your writing needs can be fulfilled using a password-protected online Google Doc, not necessarily Microsoft Word, which comes installed in PCs. So, the user can access it from any device with a Web connection. Which suggests that conducting affairs in the cloud is not only convenient, it's also greener: less capital and fewer printouts means less waste.

Besides, a trendy question that is making the rounds is where and how the concept of 'green' fits into cloud computing. We all know that virtualization helps in consolidation and as a result saves power, space, and resources. Let’s say if we could achieve 'x' amount of efficacy in terms of one's resource utilization when you use virtualization on a single server, just imagine how many times 'x' we would be able to achieve if the whole cluster is virtualized. As a result we would save more space, more power, and more money.

The biggest advantage is for small businesses. All they need are a few computers and a connection to the Internet. There is no need to buy software or have a data center. "Within five years a huge fraction of businesses won’t host their own e-mail," foresee the industry experts. Microsoft has just launched Office Live and Microsoft Online for individuals and businesses. Recently, Coca-Cola's distribution division signed up for Microsoft Online, effectively removing e-mail and documents from their own servers and floating them up into Microsoft's cloud.

Interestingly, vendors like Mcafee, Trend Micro, and F-secure are looking to use the power of cloud computing to perform real time analysis of malware in the cloud to provide enhanced security. Advantage in the cloud malware analysis is that instead of keeping all signature files of known malware on the disk, only the signatures of the viruses present in the wild can be kept. This also frees up the hard disk space as well as bandwidth used to download all these signature files in each and every workstation.

Reliability Is a Concern
Reliability and security of cloud-based services are the prime concerns for the customer companies. Companies queasy about storing sensitive data on someone else's servers will ultimately face the facts. The benefits of cloud computing will not be fully realized if businesses are not convinced that it is secure. Says Coffee, "Security is one of the most important factors. But it's all about the need to create awareness about the technology and convincing the customers." Vendors have several internal procedures for security purpose. This starts with the physical protection of data centers, the measures put in place to prevent network attacks, creating a virtual firewall around an organization's data, and most importantly, the procedures for deploying secure code.

Recently, Amazon's online store went down for a couple of hours, though it didn't make big news and there are no indications the outage affected its customers. "However it's a reminder," says Carr, "that whenever you're building a complex new infrastructure, there are going to be glitches along the way."If there’s a big outage in a system that a lot of companies depend on, the cloud-computing model could suffer. Then there is the fact that the storage and transmission of data across distant geographies can raise thorny legal and political issues. For instance, last year France prohibited government officials from using BlackBerries because the servers that house their messages reside in the U.S., the U.K., and Canada.

The debate obviously happens whenever a new technology emerges. Recently, Larry Ellison, CEO of Oracle told shareholders at the company's annual meeting that the technology is a fad that doesn't have a clear business model. This shocked the technology worlds to a considerable extent. "I think it's ludicrous that cloud computing is taking over the world. We think it's very hard to make money in this thing," says Ellison.

However, it doesn't deter the enthusiasm of already well plying companies in the field. Says Coffee, "If it is not making any business sense for Ellison, that means it just doesn't match with his company's ideas and goals. It doesn't mean that there is no money on the clouds." So, debate is hot, technology is also hot. Well, It's a long-running trend with a far-out horizon.