The rise and fall of cloud computing

The concept of a cloud as the paradigm for abstracting the complexity within traditional data center operations and computing began with network administrators. They used a cloud metaphor to document the details of large local and wide area networks. Therefore, the cloud metaphor was used to show abstraction from physical or logical resources within a datacenter or throughout an organization. This is an apt metaphor for one of the enabling technologies of the cloud: virtualization.

We know the concept of cloud computing is not new. During the frantic days of the dotcom era, many startups that wished to provide goods and services over the Internet could not afford to build the required infrastructure to provide those services. This need caused a dramatic surge in new offerings by other startups. These companies embraced the entrepreneurial spirit by providing outsourced services for IT. They were dubbed as SaaS (software/storage as a service) providers or application service providers (ASPs). Those were heady days, and many of the large hardware and software vendors joined the party.

Then the bubble burst. Many of the over-leveraged small startups that provided goods and services over the Internet went out of business. The demand for outsourced infrastructure, application and network services dropped dramatically as the economy shrank. The small Internet providers whose sole revenue stream was advertising folded. Those who invested heavily in ASP and SaaS providers lost their shirts, as many of the companies also went under.

The moral of the story here is the concept of utility/service/cloud-based computing was a good one, but the business model was too fragile. And today, the cloud’s time has finally come. Have any thoughts why?

Please find the full text of the article at Computerworld.