Will Cloud Computing Live Up to Its Hype?

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It seems like just yesterday when the cloud skeptics were out in force, saying things like this, “The computer industry is the only industry that is more fashion-driven than women’s fashion. Maybe I’m an idiot, but I have no idea what anyone is talking about. What is [cloud]? It’s complete gibberish. It’s insane. When is this idiocy going to stop?”

That’s Larry Ellison’s famous rant, and he certainly wasn’t alone in his skepticism.

Now, the deniers are all on board, and it’s just a matter of time before the general public knows what the term “cloud” means and doesn’t think it refers to an actual cloud or some other weather phenomena. Then again, 46 percent of Americans still believe the Earth is less than 10,000 years old, and 25 percent believe the sun orbits around the Earth, so . . . Well, maybe I should lower my expectations.

We’ve seen this all before with the Internet

From where I’m sitting, the evolution of the cloud reminds me a lot of the Internet itself. Back in the mid-90s, the Internet was borderline useless for most people. There were no decent search engines, just aggregators that sorted popular sites into major categories like “sports” or “news,” and no decent mail clients, just so-so services from the likes of AOL and Prodigy.

In fact, back in 1998, Nobel Laureate Paul Krugman, who is right more often than not, famously whiffed on the future impact of the Internet, saying, “By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.”

That prediction certainly didn’t pan out.

Similarly, the cloud has quickly gone from a novel and somewhat risky technology to a mainstream one in record time.

Case in point: Remember not that long ago when everyone wondered what it would take for smartphones and then tablets to ever take off? Well, it took the cloud. There were other factors too, of course, such as improved networks, cheaper processors, etc. — but these other things were known factors. The cloud was the critical, much-needed wild card.

In fact, I believe that the cloud has already become a foundational technology. Cloud-delivered services are powering Big Data, mobile banking, social media, the Internet of Things, M2M, etc.

When the Internet went from being just another communications option to a foundational technology, the nature of business and the economy radically changed. We shop, bank, and find dates on the Internet. We use email more than snail mail, and many people (knowledge workers) do nearly all of their work online.

Now, the cloud is replacing hard drives; cloud music services have displaced MP3 players, and can you even remember life before Netflix? The horror.

“We recently saw a major tipping point for the cloud,” said Tom Lounibos, CEO of SOASTA, a cloud testing company. “When the CIA awarded Amazon a $600 million cloud contract, it really proved that the cloud had become the future of computing.”

Lounibos also pointed to something else we should watch for if we need more evidence of the cloud’s importance: “Just before the iPhone 6 is released, do you know what the carriers will do? Every single one will set up a pre-order site, and those sites will be in the cloud.”

The advantage here is obvious. You can throw up a site like that whenever you want, scale it up with demand, scale it back down as demand tapers off – all on the fly.

Mobile game developer considers cloud a game-changer

Mobile game developer Phyken Media, creator of the popular Wizard Ops Tactics title, relies on the cloud to let players challenge each other, regardless of where they are located in the world.

The standard method for playing others online is to choose (or allow the game to choose) a particular server near you, and then you can challenge other people using that server. If you have a friend or relative living across the country or on another continent, you’re out of luck.

“We wanted to create one unified pool of players, with players not knowing or caring about which server they were on, and the only way we could do that is through the cloud,” said Kunal Patel, CEO of Phyken Media.

Phyken recently adopted GenieDB’sMySQL Database-as-a-Service (DBaaS). The service helped Phyken meet the demands of a growing player base (up 30 percent this year), as well as user demands for high availability. Phyken says that GenieDB is ideal for gaming platforms because it delivers fast performance, no latency or downtime, and master-master replication with auto-healing and conflict resolution – all within a native MySQL environment.

The complexity of setting something like that up can’t be understated, but for Phyken, they now just get to hand those headaches off to a service provider.

I should point out here that Wizard Ops Tactics is a turn-based game. The solution wouldn’t enable simultaneous gaming due to latency issues over the WAN and the speed limit posed by the speed of light, but, who knows, perhaps cloud-driven predictive analytics could even overcome those obstacles.

No office, no tech infrastructure, no problem

Not that long ago, the path to success for a new tech startup was pretty well mapped out: secure angel funding, create an alpha product or service, find VCs and eventually release a product or service. Then, you figured out an exit, failed, or, much less frequently, turned into a viable standalone company.

Yes, there were exceptions, but they were few and far between, and even fewer of them were in the tech sector. Now, plenty of startups skip angels and seed funders in favor of crowdfunding (Kickstarter, Indiegogo) or simply using their own credit cards.

For many types of startups, this wouldn’t have been possible ten years ago. To be taken seriously, you needed office space, locally based employees, a strong web presence built on at least a few servers, computers for all of your knowledge workers, and on and on. Operating and development costs left entrepreneurs few options but VCs.

Today, many of those costs have been eliminated (do you really need office space or can everyone work remotely?), driven down to next to nothing (startups rent servers now), or absorbed by the workers themselves (BYOD).

Look at what happened with virtual reality startup Oculus Rift. The company’s initial capital came from a Kickstarter campaign. The Kickstarter money helped the startup attract VC funding, and then Facebook acquired it for $2 billion.

Okay, for the most part, Oculus Rift did follow the traditional path. But crowdfunding arguably accelerated their journey. For other startups, the cloud means that they have more to prove before securing funding. According to a 2013 study by the Angel Resource Institute, Silicon Valley Bank, and CB Insights, sixty three percent of angel investments made in 2012 were secured by revenue-producing startups.

Still other startups, such as smart watch maker Pebble and Ouya, which has developed an Android-based gaming console, have bypassed venture funding altogether.

Once companies are out in the marketplace, more and more of them will be dependent on the cloud. “Consumers don’t have much visibility (or say) in whether a company uses a private internal network or leverages a public cloud service provider to host their data, so companies will do what makes the most sense from a cost perspective,” said Eric Chiu, President of HyTrust.

The cloud isn’t just here to stay. Soon, it will be an engine for much of the economy.

Jeff Vance is a technology journalist based in Santa Monica, California. Connect with him on LinkedIn, follow him on Twitter @JWVance, add him to your cloud computing circle on Google Plus.

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