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Cloud computing isn’t new (picture: drawing of rabbit, then adding cotton balls on top of “architecture”). Key ingredients: processing, transmission, access (was mainframe, leased lines, CLI terminals, next server room, narrowband Internet, GUI client apps, now server farm, broadband Internet, browser). Significant activity and what cloud computing is doing: streaming, mobile ads, provisioning, storage – overlaying on existing transport networks. Cisco buys: focus in security, wireless, video, data center, consumer, physical security.

Metaphors: reduce costs, improve security delivery, enable business innovation  (Blue Insight runs on 48 processors, more than a petabyte of data.) Can launch for very small amounts of money (<$500k in US gives access to datastore). Microsoft using their data center to launch new businesses and services (compute time: $.12/hour, storage $.15/month). Free is now baseline for computing, price goes up with value added services.

At forefront with sophisticated backend: video games ($20B industry). World of Warcraft $2+B annual revenue with 11.5M subscribers. Farmville: largest facebook game: 75+M active users, $100M revenue, 1/3 revenue on recurring subscriptions, occurred in very short period of time. Magellan Project ($33M): pooling smaller clouds to do organized research. First time for federal government to go in this direction, includes training and support.

How to structure your cloud: prioritize location and data, simplify deployment and management, distribute efficiency and reliability (and risk), iterate short term hacks and long term solutions. (When Dilbert’s talking about it, you know it’s real.) Cloud computing can provide great benefits, but don’t hurt your critical ability to serve your customers.
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