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Cloud Computing
Expert technology opinion by Sam Mishra, President, Franteractive

When Amazon introduced EC2 or the Elstic Compute Cloud in 2006, it was executing on visions such as making computing power a utility, much like electric power. Cloud computing refers to computing services delivered over the Internet. These services include everything from micro-blogging (Twitter) to social media (Facebook) to e-mail (GMail) which are marketed to consumers like us. It is a myth that these services are free; they are not, they are supported by Internet advertising.

So why is there so much buzz around Cloud Computing? It is a business model in itself, that is why! Amazon uses this model to sell EC2 to other companies. Any IT department, when it pays a monthly (or yearly or what have you) service to pay for SaaS (software as a service) services such as Salesforce.com, instead of building its own CRM (customer relationship management) solutions in-house, is renting a piece of this cloud.

In business terms, cloud computing is an outgrowth of billing customers for computing power. IBM pioneered it. I still remember my computing days in Goodyear: I replaced some bulky COBOL code by writing native SQL, which the marketing managers were trained to run off the fly from their QMF (Query Management Facility) dashboards on their desktops --- this helped them to query legacy databases on-demand, and they stopped depeneding on bulky COBOL report outputs from the centralized IT department. The legacy IT folks cried foul, saying that my QMF queries were costing roughly $60,000 per month, which the data center billed the IT department, in terms of computing resources utilizied by my native SQL queries, some of which had as many as nine UNIONs. Oops!

While the $60,000 per month bill was an exercise in internal transfer pricing (money charged by one department or one business unit to another), you get the idea. What IBM pioneered through its accounting software in the 1960s in terms of billing customers is finally a new buzzword in the Internet era: cloud computing (and billing for it, of course). In the years to come, expect a horse-race between everyone from Google to Microsoft to Oracle to Amazon to peddle a piece of the "Cloud" for a fee to IT departments, CIOs, federal and state governments, and may be, even the gullible amongst you...


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