RETURN ON TECHNOLOGY: Should you put your head into 'cloud computing'?

October 13, 2008

Sometimes just the name of a technology is enough to make me hate it. An example is the new hot thing, "cloud computing." For one thing, the name has given marketers everywhere a new meme to exploit with puns, clever ad copy and pictures, speeches and slogans.

There is even a cloud computing expo, where reportedly cloudy references were so numerous that it stormed inside the hall. Cloud computing is already here, and it's only going to get deeper and more insistent. Microsoft, Oracle and other behemoths are buzzing about it and trying to adapt to it. Yet it's not even new.

Few people seem able to explain what "cloud computing" is. The term comes from the techie slang for Internet technology, "the cloud." If you look at the Internet's underlying plumbing, you'll see it's not like your company's networks.

The Internet is a lashup of ad hoc connections, where your communications "packets" travel paths that are rarely the same twice during a connection. In fact, on the Internet, there is no "connection" as such. When you ask for a Web page or send an e-mail, your stuff is broken into packets, the packets are given addresses for where they should end up, and the packets are shot outward into the "cloud." Where the packets go from there is anybody's guess. They're just shuttled from server to server, until they get where they're supposed to be. Sounds chaotic, and in a sense it is. But it works. Packets get lost, of course, but there are provisions for that.

Cloud computing is computing in the cloud, then. Or rather, it's when somebody else has the program code and the data, and you have only a browser to work on. The concept is actually old; it was the first way computers were ever used. It was called "client-server" then. Our desktop computers were called "terminals" because they didn't have smarts, only display capability. We didn't even have local disk drives. Didn't need them. Everything was on the Big Boy back in the data-processing center.

Cloud computing just updates that concept by going to the Internet instead of the back room. If you're using the e-mail services of MSN,Yahoo, AOL or Google, you're doing cloud computing. If you're blogging, you're also doing cloud computing. Google Maps and Wikipedia are forms of cloud computing. Simple, huh? But a big difference between the old days and now is that the Internet is a competitive environment, and the data-processing center wasn't. The Web holds multiple competitors for almost everything. Free e-mail is a good example.

Another term we used to use for "cloud computing" was "SaaS" or "software as a service." Google was an early entrant into online software for businessfolk. Google Tools includes a calendar, a spreadsheet, a word processor and a presentations editor, and all for free. They don't entirely replace Microsoft Office, but they come close. And you don't have to maintain the software. Google does that. It keeps your data, too. You can share that data with anybody in the world without having to attach files to e-mails, ship CDs or run the risk of data escape.

The business community hasn't embraced Google Tools, and probably won't. Microsoft Office is too ubiquitous and comfortable. But the world is changing fast, and companies are looking for cost-cutting with the same fervor they once spent only on looking for new business. Microsoft folk know this and are apparently of two minds about it. On the one hand, they don't want to miss the cloud computing blimp, but on the other they don't like to concede the market share drop for Microsoft Office if they move to a cloud paradigm.

Also, there's the problem that selling software is money realized now, today, the moment the cash register chimes, while SaaS is realized slowly, over years. That's not Microsoft's style. You can't dominate the desktop that way.

SaaS/cloud is a model that's had some good success. Salesforce.comis an online CRM (customer relations management) tool that has experienced extremely promising growth. Salesforce may have succeeded so spectacularly because its customers are in a dispersed pack, but need to connect up to trade leads and coordinate trips through the sales funnel. Distance-meeting Web companies like WebEx (www.webex.com) are doing well, too. Intuit's TurboTax and QuickBooks (www.intuit.com) have been "in the cloud" for years.

It seems to me that e-mail, Salesforce, WebEx and similar tools that permit farflung people to do their daily work as if they were in adjacent cubicles have a strong future, whether they're supposed to be a service or sitting in a cloud. But look for Microsoft and other biggies to poke their heads further into the market, if only to make sure they don't miss out on the silver linings.

Altom is an independent local technology consultant. His column appears every other week. Listen to his column via podcast at www.ibj.com. He can be reached at timaltom@sbcglobal.net. Find his blog at usabilitynome.blogspot.com.
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