Computing in the Cloud

Inside a New York City loft in 2006, two entrepreneurs are working on the software to launch a new dot.com business they call Animoto. They hope to offer a service that will allow people to turn a series of photographs into a simple movie with a nice sound track in the background. Although their business offers an online version of something found in most photo viewing applications, they hope that the ability to send the finished product to friends and relatives will make their service a hit with millions of amateur photographers. Our entrepreneurs have finished the basic functionality of the software, but their next major hurdle is attracting enough venture capital to purchase the server farm and network bandwidth necessary to go live on the Internet. Unfortunately, this will require them to give up significant ownership and control of their company to venture capitalists. But this is how all dot.com companies get started, hoping to make it big like Yahoo!, YouTube or MySpace. In 2009, however, these entrepreneurs have a new alternative that was not available to startups of the past. They can rent the necessary computing, storage and communication capacity from a large service provider that already has all of these assets connected to the Internet. They can pay only for the volume of these services that they use, they can quickly add or subtract resources from their order, and they never have to take possession of the hardware and all of the technical support headaches associated with it. This will allow them to retain more ownership in their fledgling company, hopefully keeping millions of dollars in their pockets instead of the venture capitalists' pockets. They can launch their company "in the cloud." They can tap into the "cloud computing" services offered by a big vendor like Amazon. com, relying on Amazon's ability to purchase hardware cheaply, maintain it reliably and staff it competently. Cloud Computing Poster Child Animoto has become one of the poster children for the cloud computing concept. This producer of online slideshows was able to launch without purchasing millions of dollars worth of computer equipment, hiring an IT department, or selling majority ownership to venture capitalists. As a start-up, they really had no idea how big a customer base they could attract, and therefore, did not know how much IT equipment they would need to purchase. But Amazon.com's cloud computing service, known as Amazon Web Services, offered a means to rent this capacity by the compute hour, storage gigabyte and network gigabit. Amazon also offered to scale up and down as the customer demand increased or decreased. This was perfect for Animoto since they could not predict demand--and since the demand they actually experienced varied widely as their service was featured in various press stories. Over one three-day period they rocketed from 25,000 registered users to 250,000 as the result of a posting on the popular web site Slash.dot. In a one-week period they ramped up their usage of Amazon computers from a couple of dozen machines to nearly 5,000 machines (Figure 1). What is it? Cloud computing has become a hot term in the last few years, but a clear description of what it is, what it can do, and why companies might use it is often difficult to find. The concept and a number of predecessor technologies have been around for decades. Gartner, Forrester and major computer companies offer their own definitions of the term (see "Defining Cloud Computing," next page). In essence, it is a means of renting computers, storage and network capacity on an hourly basis from some company that already has these resources in its own data center and can make them available to you and your customers via the Internet. [FIGURE 1 OMITTED] Nicholas Carr has suggested that computing will follow electricity generation in the pattern of business use (1). A century ago, most companies had to build their own dedicated power generation capabilities. …