Cloud computing - what goes around comes around?

Cloud computing is one of the latest buzz phrases for a hot new technology, but is it all that new?

Back in the late 1980's I worked at GE Information Services¹ or as it was variously known then, GEIS or GEISCO. GEIS used to sell what it called teleprocessing services, which were essentially the direct descendants of the old time-sharing computer bureau services. By this time computer bureau services were more or less a thing of the past and we were obviously way beyond the famous Thomas Watson misquote² of "I think there is a world market for maybe five computers,"

GEIS however just happened to connect its two or three large computing facilities to a proprietary, private, global network, and this allowed it to become the largest global supplier of EDI services and a range of specialised services for financial markets, trading, shipping, etc. This was of course in the pre-internet world and long before the WTO deregulation of telecommunication services³, but arguably, GEIS was back then a type of cloud computing provider.

Cloud computing therefore, in my view, is just technology evolving at its usual rampant pace - combining many different components: ubiquitous, high speed network access, simplified and standardised protocols (IP etc.), standardised, low cost processing (blade servers etc.) with perhaps virtualization providing the last significant piece of the puzzle that enables what we today call cloud computing.

Now don't get me wrong, there are clearly many additional developments that enable cloud computing to easily scale, on demand, and therefore start to become a utility-like computing capability where we just do not need to know where the servers are, or how they are run - in just the same way that we don't care which power station is actually generating our electricity. But I would suggest that the main impact of cloud computing and managed hosted computing in general is a commercial one.

Just 10 years ago if you started a new software related business one of the first things you had to do was buy some expensive servers plus all their associated software, and you also had to hire some very experienced (and expensive) systems folk to configure and manage these computer systems.

There were lots of choices to be made - and wrong decisions could be expensive if you had to swap out and replace inappropriate equipment - and it generally took many months to get it all set up properly.

Today we can do all this in just a few hours - from scratch - by using hosted/cloud services that let you provision new Virtual Private Servers at will and resize them 'on the fly' to meet increased load demands. They come with a standard, but highly functional, software environment, typically a Linux operating system, Apache web server, MySQL database and PHP web development scripting tools. This standardised, so-called LAMP environment, supports 1000's of readily available applications and provides a development environment used by many software communities.

But these services are not only easier to use, they are low cost and can be acquired on a simple 'pay-as-you-go' basis without any initial capital costs nor any expensive dedicated, operational staff.

When setting up Enmore Services a few years ago this was the way that we went from the outset and we haven't looked back. So whilst there are undoubtedly some business uses that demand a dedicated environment run by your own people I suspect that  the reality today is that they are very few and far between.

1. GEIS is now GXS and in June 2002, GXS was acquired by venture capital firms Francisco Partners and Norwest Venture Partners from GE and now operates as an independent firm.
2.  Although IBM's Watson is well known for his alleged 1943 statement: "I think there is a world market for maybe five computers," there is scant evidence he actually said it. See  http://en.wikipedia.org/wiki/Thomas_J._Watson for more.
3. On February 15, 1997, sixty-nine governments signed an agreement seeking to liberalize the world telecommunications market