Dylan’s Desk: How I learned to stop worrying and love “the cloud”

By Dylan Tweney 
November 29, 2011    |  VentureBeat

As I write, the VentureBeat offices sit enveloped by a cloud. In all directions, the fog wraps our office building in a soft, gray fuzz, obscuring the views of downtown San Francisco, the bay, and the ocean.

It’s not unlike the cloud of marketing and hype surrounding “cloud” technologies. A fog of jargony words and needlessly ugly acronyms obscure understanding and make everything look like the same, soft grayish fog.

IaaS, PaaS, SaaS, cloudware, private clouds, cloudsourcing, utility computing … even the word “platform” gets overused and abused, rendering it nearly meaningless. What do all these terms mean? It’s easy to get lost in them if you’re not already deeply wrapped up in the cloud.

So I’ll be honest: Even though VentureBeat has a cloud channel and we’re planning a cloud conference that’s happening later this week (you should go!), I started out as a serious skeptic of all things “cloud.”

Here’s why: The cloud was originally a symbol used in network architecture diagrams, where it stood for “the Internet” — basically, a bunch of servers and networks that the network architect didn’t really want to think about in detail. Thanks to the standardization of communications protocols like TCP/IP, it wasn’t necessary to think about all those other servers and networks — you could treat them as a single, addressable resource that did some magic, transmitted some data from one place to another, and then brought it back to earth in another part of your network.

The cloud was the network architect’s equivalent of “then a miracle occurs.” But thanks to the Internet, it was a miracle that happened every single day, until it became so commonplace that we didn’t even notice it any more.

Eventually, it seems, product marketers latched onto that cute little “cloud” icon scrawled in these diagrams and decided that it would make a friendlier face for their Web applications.

“Cloud” is a more approachable term than “Web application” or “Internet-based service,” after all, so the marketing shift makes perfect sense. But it doesn’t have much content. You could substitute “Internet” anywhere you see the word “cloud” and it would mean just about the same thing.

However, there is some hard reality underlying the, um, fog of hype.

“In my mind, cloud is a somewhat vague term, but it has a very specific implication, which is it’s all about making IT more responsive to the needs of business,” Dan Scholnick, a general partner at venture capital firm Trinity Ventures, said in a recent VentureBeat interview.

Business IT services delivered over the Internet — what we can call, in general, cloud services — are in fact driving a major shift in the way companies think about and use information technology. Cloud services are cheaper and faster to deploy, at least initially, because there’s no on-premise hardware or software installation needed. Cloud services can scale more quickly than software or services that you run yourself. If you need to add 100 more users to your contact-management system, you can turn them on in minutes using a cloud-based service provider like Salesforce.com. If you need to subtract 100 users, it’s just as easy.

By contrast, if you are running your own salesforce management software on your own servers in a datacenter somewhere, every time you want to add a significant number of users you’ll have to buy additional hardware, install it, get additional site licenses, make sure all the software was up to date, and so on. If you then go through layoffs, you’re left with a bunch of capital that you can’t get rid of easily.

Indeed, in some cases cloud services are making it possible for companies to have tools and resources that previously were only available to the largest of corporations.

To take one relatively minor example, Stitch Labs’ inventory management system gives small-time Etsy sellers the ability to get sales-channel reports and customer insights that you used to only get if you were willing to spend hundreds of thousands of dollars on an enterprise resource management system.

“We couldn’t have existed before the cloud,” Eloqua CEO Joe Payne told me recently. His company uses at least a dozen cloud-based services, including Salesforce.com and his own company’s marketing automation tools, but also including cloud-based Web-conferencing, accounting, contract management, payroll processing, software version control, collaboration, recruiting and training. It may sound like overkill, but all those services give Eloqua flexibility and speed that it never would have had before, and have helped drive the company to grow its revenues at a cumulative 54 percent per year over the past 5 years.

It’s hard to say exactly how big the market for cloud services is, partly because the term is so broad that it comprises a whole bunch of disparate categories. To take just one slice of the pie, cloud infrastructure services, awkwardly called “infrastructure as a service” or IaaS, are a $4 billion market by themselves...

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Source: http://venturebeat.com/2011/11/29/dylans-desk-cloud/