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November 4, 2009

The fast-growing 'cloud utility'

Posted: 10:02 AM ET

Cloud computing appears to be growing like mad.

Instead of computing on our desktops and laptops, many people are moving the heavy lifting to data centers in secretive locations all of the world.

These centers are owned largely by big companies like Google, Amazon, IBM and Microsoft, which charge monthly fees to clients who want to move their IT "into the cloud."

This transition may seem subtle. But writer Nicholas Carr argues it's on pace with changes in the electricity industry a century ago that gave us the modern power utilities we have today.

I talked recently with Carr about his book, "The Big Switch: Rewiring the World, from Edison to Google" for a first-person story I wrote about the cloud.

In the book, Carr writes that people used to build small power-generation stations for individual factories and neighborhood blocks. As electricity became more common, and more important for industry, these small plants consolidated because it was more efficient - and so that power could be delivered to everyone across a large and complicated grid.

This is happening today with information. Businesses used to have computer servers in a closet or some back corner of the office. Many still do. But the new model is the cloud, in which these individual IT departments are outsourced to big companies who say they have several advantages: efficiency at a larger scale, expertise and higher reliability.

The U.S. government is jumping on board with the idea. It recently announced a "government cloud" project with Google.

Carr says we're at the beginning of a major information-delivery revolution.

For now, the cloud is rather scattered. A number of companies participate and some of the clouds are private or semi-private. Going forward, Carr expects the data centers to consolidate, leaving control of the cloud in the hands of a few mega-companies - kind of like electric utilities.

The big difference between power and information? Carr says regulations haven't caught up with the cloud.

As a result, it's unclear who owns some data stored in the cloud, and there are no standard file formats that would allow consumers to transfer their data - their photos, blogs, etc - from one cloud company to another, he said.

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Filed under: cloud computing • consumer tech • data centers


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Shannon Steede   November 4th, 2009 2:00 pm ET

How does a cloud server "farm" protect peoples identity and say credit card info if we use email to send specific information via gmail or I shop on Amazon (which offers a cloud) but what is actually stored there?

How can we be sure it is protected from scammers or thieves? If the illusion of a spector is storing my data is the marketing angle, where is the security? Should that not go hand in hand?


Greg   November 4th, 2009 6:01 pm ET

John, you are spot on here. Power plants and utilities are a perfect analogy for cloud computing. We have been using this for years. My company's business is global logistics and trade and we actually wrote a byline article about the power plant analogy back in 2007 when the jargon was all about "on-demand". Here it is:http://www.sdcexec.com/online/article.jsp?id=9242&siteSection=4

Cloud-based technology is really beginning to take hold in global trade, a $20 trillion industry. Right now, it's less about computing power and more about inter-company information exchange. Sharing an information platform with thousands of other companies is the only way to automate global trade. Huge companies are all over this because they can't do it themselves.


Helen Atkinson   November 5th, 2009 2:21 pm ET

Greg has a good point: this technology is essential for the future of trade. Cloud computing may present no real advantage to the individual consumer, such as Shannon Steede, who doesn't benefit from having credit card information stored in the cloud, precisely because she doesn't want it to be accessible to a wider community of users. But wide availability of information (albeit password-protected) is exactly what is needed by the geographically dispersed, ever-changing community of people that form and dissolve around single iterations of the devilishly complex business of international shipment of goods.


Victor   November 5th, 2009 5:58 pm ET

They were (both John and Google) comparing cloud computing to electricity supply. Well it took a long time for electricity to become reliable, but we still have back-up generator in hospitals and high-rise buildings in case there is a black out. And if we base on this we will still need to back-up all the data on a local server. And not forgetting about security, privacy and treats of terrorist attack on the cloud.

In the end it will come full circle like the electricity supply where individual household with solar panels are selling the electricity back to the grid.


Mark   November 6th, 2009 10:43 am ET

I think "The Cloud" will only cause more jobs to be lost in the IT field!


Charlie   November 6th, 2009 11:47 am ET

The "cloud" and the utility systems have the same vulnerability – the transmission system. One bad guy with a stick of dynamite blows up a power line tower in Michigan, and a large area is without power for days. An earthquake south of Taiwan cuts two fiber cables, and the Asian banking system has a disaster for weeks. A ship in the Persian Gulf cuts a fiber cable with it's prop, and many comm systems including the US military are out for days. All true stories. The cloud is nice, but be prepared to manage without it.


Eliseu   November 6th, 2009 2:48 pm ET

I think the real issue nowadays is the emerging occurrence of security threats on networks. A cloud can be very vulnerable. Another thing is the threat of dos attacks on clouds, what if that happens? Who will be able to stop it and how will information be available if this happens? There are more questions then answers as the IT field becomes more and more advanced and the security sector falls behind...


a   November 7th, 2009 1:56 pm ET

T-Mobile Danger Sidekick

http://www.techcrunch.com/2009/10/10/t-mobile-sidekick-disaster-microsofts-servers-crashed-and-they-dont-have-a-backup/


Greg, Ontario   November 7th, 2009 7:26 pm ET

Isn't that what a grid system protects against Eliseu? You break a cable and the network can detour around the break to keep everything going? I think with so many nasty people in the world security will always be the biggest problem for any form of data control or storage.
For example I play an online text based or browser game. It's been played by thousands for years. Then out of the blue a bunch or jerks get the idea to use scripts to over load the servers and spoil the game for everyone.


sylvie chen   November 7th, 2009 11:44 pm ET

The weakest points in the networks are colocation centers where various fiber optic carrier lines converge into a switched environment. Since these are still few, you could create considerable delay on transmissions when these centers are compromised.

With cloud computing, the ability to distribute, replicate and fragment critical data across multiple sites is a good security model because one does not know which sites to attack as they are spread over virtual server clusters.

Still, cloud computing introduces new legal privacy issues and more important still to be defined rules for recovery of damages. Who do you sue?


Broken mouse   November 10th, 2009 7:18 am ET

The protection is low since some fancy pants nerd like me has housed all your data . Encrypt all you want cause we will get to it sooner or later.


Ari   November 10th, 2009 7:42 am ET

Electricity transmission systems have a certain degree of redundancy, but it is finite and limited by cost. The transmission grid should be designed to withstand a single fault anywhere without interruption to customers. The problem nowadays is that multiple simultaneous faults occur because of lack of maintenance and investment resulting in an abundance of old and failing equipment. Most networks were not designed to cope with simultaneous faults, and rightly so, because it is just not practical or economic especially with electric utility privatization where companies don't want to invest in the network because it affects their profit motive. In contrast, the primary mission of the centralised utilities of yesteryear was the security and robustness of the transmission network as determined by engineers (not accountants). What is the real motive of the private cloud companies? Is it profit, or data integrity?


mike   November 10th, 2009 2:57 pm ET

Does anyone worry that the information in the 'cloud' , in the not too distant future, could be used by artificial intelligence against us, ... once the machines become 'aware'?


Bill   November 18th, 2009 7:03 pm ET

Cloud computing allows virus's and worms to be released with no way to track the offender. I believe this has happened already. This maybe good for companies but for individuals controlling their personal info is their responsibility. It should not be shifted to a utility cloud company.
Also, how many people are really happy with the way their utilities have been managed in the past 10 years? This is also another job killer in the IT industry. With the start of the cyber cold war recently do you really want your personal data out on the web? The power company analogy is to simple and doesn't fit the many problems this could cause for personal data. Corporate data is another story. Still this faces security problems unseen or thought of right now.


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