Cloud Computing - Old Wine In A New Bottle?

A recent cloud computing report from McKinsey stirred quite a controversy. TechCrunch called the report partly cloudy. Google responded to the report with the great details on why cloud is relevant. I appreciate the efforts that McKinsey put into this report. However I believe that they took a very narrow approach in their scope and analysis. An interaction designer, Chris Horn, from MAYA Design sent me a paper, The Wrong Cloud, which argues that the cloud computing is essentially an old wine in a new bottle and the big companies are fueling the hype.
"Today’s “cloud computing” claims to be the next big thing, but in fact it’s the end of the line. Those corporate dirigibles painted to look like clouds are tied to a mooring mast at the very top of the old centralized-computing mountain that we conquered long ago."

I appreciate that there are people out there who question the validity and relevance of cloud computing. This puts an extra onus on the shoulders of the cloud computing companies and others to make their message crisper and communicate the real values that they provide. I was recently invited at the Under The Radar conference where many early stage cloud computing start-ups presented. The place was packed with the venture capitalists closely watching the companies and taking notes. It did feel like 1999 all over again! I hope that we don't fuel the hype and deliver the clear message on how cloud computing is different and what value it brings in. Here are my arguments on why cloud is not just a fad:

Utility style cheap, abundant, and purpose-agnostic computing was never accessible before: There are plenty of case studies about near zero adoption barrier for Amazon EC2 that allowed people to access the purpose-agnostic computing capabilities of the cloud computing at the scale that had never been technologically and economically feasible before. I particularly like the case study of Washington Post where they used Amazon EC2 to convert 17,481 pages of non-searchable PDF to searchable text by launching 200 instances for less than $150 in under nine hours. We did have massive parallel processing capabilities available to us such as grid computing and clusters but they were purpose-specific, expensive, and not easy to set up and access.

Peer-to-peer and cloud computing are not alternatives at the same level: The MAYA paper argues that the cloud computing is similar to P2P. I believe these two are complementing technology. The P2P solves the last mile problem of client-side computing where as the cloud computing is a collection of server-side technology and frameworks that has centralized computing characteristics. BitTorrent is a great example of effectively using P2P for distribution purposes since the distribution problem is fundamentally a decentralized one that could leverage the bandwidth and computing of the personal computers. However I do see potential in effectively combining both the approaches to design an end-to-end solution for certain kinds of problems e.g. use CDN on the cloud with P2P streaming to broadcast live events.

Virtualization and cloud computing are not the same: McKinsey's report on cloud computing recommends that organizations can get the most out of virtualizing their data centers against adopting the true cloud computing. I am a big fan of virtualization but it does not replace the cloud computing and does not yield the same benefits. Eucalyptus, an emerging cloud computing start-up, has detailed analysis on how cloud computing is different than virtualization.

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