"Cloud computing" is being touted as the (next) wave of the future in business infrastructure. At Pacific Crest's conference in San Francisco today this was emphasized time and again.
Cloud computing means using internet-based (the "cloud") computing resources to do many of the tasks, and provide many of the services you used to have to get by having large IT staffs, programmers and investments in servers, internal infrastructure and computer rooms. Now, with all of this available via the internet as a service, the need to make all of those investments is - over time - going away. Google, Amazon and Salesforce.com are all well-known providers of such services. Originally they developed all these skills, capabilities and made these investments to service their own needs and scale their businesses - and then they realized that it made sense to leverage that expertise into for-profit services. On top of which it's a great way to expand a partner network and - to some extent - lock others into your computing architecture.
For a startup, and for the finance guys at those companies, the move to cloud computing is compelling. Suddenly, one of the major cash drains in a startup goes away and the development and services infrastructure investment is replaced by a predictable monthly fee. And it scales exactly when you need it. And as I mentioned in an earlier blog, once again a startup can focus its resources on its core mission, not on all the crap around it to make it work. Music to a CFO, an investor and an employee's ears!
For the traditional box sellers - Sun, NetApp, HP, Dell etc - its bad news. No longer will Sun make billions in revenues from companies each building out their infrastructure, as they did in the dot-com bubble. Yes, they'll still sell gear to the cloud services providers - but it will all be generic, yet specialized boxes and far fewer of them. No-one buying the cloud computing services will care - they will just know its there and it works. Worse for those box guys, people like Google build their own! So now HP will actually have to make money by innovating rather than relentless, demoralizing and unimaginative cost-cutting. Or guess what they'll become - the tech industry equivalent of Chrysler.
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Posted by: Cloud Computing | May 14, 2010 at 02:44 AM