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Head in the clouds

The next giant leap in technology is here: selling power and server space like a metered utility. Everyone expected Google to be the first to pull it off, but it's being trounced by an unexpected player: Amazon

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When it comes to creative ways to make use of the Internet, most of the attention usually focuses on Google, either because of its dominance in online search and advertising, or because of its other Web-based services, such as Gmail and YouTube. Of course, the fact that the company is worth $120 billion or so might have something to do with it as well.

In any case, there's no question that Google is a great company and a leader on the Web. At the same time, however, there's another player that is arguably making use of the Internet in even more powerful ways, although it's not one that most people usually associate with creative web services. That company is Amazon, and it has become a leader in what's called "cloud computing."

Most people think of Amazon as just an online retailer, selling books and music. But for the past year or so, the company has also been selling something else: computing power and server space. And the impact of that business is potentially much farther reaching, particularly for small, and even medium-sized and larger, companies.

The first service Amazon launched in 2006 was called Simple Storage Service, or S3. What the service effectively does is give people—and companies—cheap access to spare real estate on the company's thousands of servers. Instead of having to pay to support a host of servers at corporate headquarters, a company can secure data storage for pennies a day. More than one Web company has made use of S3 to cut their costs fairly dramatically. Smugmug, a photo service that stores hundreds of millions of photos for its users, shifted about one-third of its storage needs over to Amazon's service and saved more than $1 million a year, according to chief executive Don McAskill.

The second service Amazon launched is EC2 (for Elastic Computing Cloud), and it offers the processing power to match the server space of S3. Companies that find themselves growing quickly can instantly expand the number of servers they need to keep up with demand—again, at a fraction of the cost of having to build or support that infrastructure themselves.

More recently, Amazon launched something called SimpleDB, a database-management tool. Put together, the three services give companies pretty much everything they require to run their infrastructure: storage space, servers and processing power, and a managed database. It's like a company in a box. It can expand at will, and it's effectively available anywhere there's an Internet connection.
In effect, Amazon has taken an old phrase coined by Sun Microsystems co-founder Scott McNealy—"the network is the computer"—and turned it into a reality. The ironic thing is that everyone expected Google to make it happen—especially since its CEO, Eric Schmidt, is an ex-Sun executive. But while Google does have "cloud" apps and services of its own, Amazon is closer to making that goal a reality.

McNealy's vision was that, instead of having a powerful desktop computer on every desk, users would all be working on "thin clients"—low-powered PCs (or even laptops) that would be connected to the network at all times and would store most of their data in "the cloud."

Using web services such as Google's Gmail or Google Docs or Flickr is effectively an example of cloud computing, and one that is familiar to most of us who regularly surf the Net. But Amazon's S3 and EC2 could be the engines that bring the reality of cloud computing to even more people (whether they realize it or not), as more companies start to "virtualize" themselves and outsource their server and computing needs.

There are drawbacks to keeping all of your data in the cloud, of course, and one of the main ones is that you can be cut off from it at crucial times, either because you are without Internet access or because the cloud you're using is unavailable. In mid-February, for example, Amazon's S3 service was offline for several hours due to a problem with the company's authentication server. While the service was restored relatively quickly, a number of companies found their own services affected because they couldn't access data stored on Amazon's servers. No doubt many of them decided to create copies of their data somewhere else as a backup (if they didn't have one already). Backing up data is also something that most experts would recommend for individuals using cloud computing.

Another risk is that the data you store in the cloud won't be kept secure, and can either disappear suddenly or be vulnerable to hackers. But this is a risk with virtually any kind of storage, and one would hope that companies as large and deep-pocketed as Google and Amazon would be better-equipped than anyone else to take care of your information in the cloud.

In the future, the reality is likely to be that services from Google and Amazon, and even Microsoft, will cease to be either entirely desktop or cloud computing, and will instead be a blend of the two, with your data flowing from whichever is most convenient. At that point, the dividing line between Internet service and non-Internet service will effectively cease to matter.

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