Information Technology Business Thoughts by Brian Lillo

May 25, 2009

Cloud Computing

I am again blogging about cloud computing. I just returned from a trip to Ireland and in the mail (called post in Ireland) I got a trade rag that discussed all the different cloud computing companies and options. It was an interesting read and I am going to sum it up and what I believe is going to happen in the cloud computing space.

Basically, cloud computing has existed for some time. Nicholas Carr wrote a book called the Big Switch, rewiring the world from Edison to Google (A must read and can be found here, Big Switch. In this book he coined cloud computing and the media has picked it up and ran with it.

Some early cloud computing options have been spam filtering by postini, MX Logic and others. Salesforce.com and Netsuite are also companies that have really had cloud computing options for at least 4 years. These companies are really the pioneers in this market.

Hosted Exchange email and Hosted Sharepoint is also an early adaptation on cloud computing. Microsoft started offering this with Exchange 2003, numerous providers jumped on and I believe that the market is maturing. Microsoft has launched its own live version of this service, driving many small shops out of the market.

Amazon has also offered cloud computing services since 2006, with its Elastic Compute Cloud. They have services such as SimpleDB, CloudFront and Simple Queue Services. They can also offer pay as you go options to virtual servers and virtual storage.

AT&T, the legacy phone company has a cloud computing option. They purchased a web hosting company called USinternetworking in 2006. In August of 2008 they announced a service called Synaptic. Synaptic is a pay as you go service that with access to virtual servers and storage with security. They are in a good position to offer this as they have massive bandwidth to the Internet and very well protected data centers (They have been doing data centers for years, think of the CO's, they are basically data centers).

So, I think many companies have started with cloud computing already. It could be hosted spam filtering or applications such as salesforce.com or Netsuite.

The next step for small business is going to be hosted email. Email is becoming a huge part of every ones business and they can not be without it. To build the redundancy that is needed is very expensive to build and maintain. I do believe you are going to see this as a first wave towards major business applications going towards the cloud. At about 9.95 a month per user, you can not go wrong. You eliminate the up front capital cost and also the long term expense cost.

The next wave I believe you will see is small to medium businesses look to visualizing their servers in the cloud. Servers for most small businesses are getting to the point that they need to be replaced. I predict that with all of the cloud computing options that we have available, it is going to make sense not to purchase that server and move it to the cloud. The recession and the need to cut capital costs is going to drive this. Also, with more of the workforce telecommuting and the ability to hire anyone from around the country, it makes more sense to have it in the cloud then at single location.

This is going to be a game changer for most businesses, you will need to start reviewing this sooner rather than latter. For IT professionals it will not be enough just to understand the technology. You will need to have the ability to commuicate and understand how to run a business and how your business is run. It would be a good idea to diversify your skill set and either take a few business classes at your local college or self study.

The next 5-10 years are going to be exciting.

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