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Who's who in cloud computing: Understanding the market's players

The cloud computing market is crowded with noise and wanna-be players, but some companies are worthy of your attention.

Carl Brooks
The sheer number and diversity of companies now "in the cloud" is reminiscent of other big shifts in IT, when suddenly everyone latches onto the latest thing.

Google's in the cloud (didn't Google once just search the Web?), Amazon is in the cloud (didn't it once just sell books?), Microsoft is in the cloud, Cisco Systems is in the cloud, MySpace is in the cloud. It's a big tent, and the waters of the IT marketplace have been thoroughly muddied. In September 2008, Oracle chief executive Larry Ellison called the whole shooting match "complete gibberish."

The term springs from the custom of drawing networks and depicting the space outside or between those networks as a cloud. But what exactly is cloud computing? And in this dizzying economic landscape, is the cloud a flash in the pan or a shift that we should take seriously?

The blanket answer is that cloud computing is when your computing work, whatever that may be, from email messages or conference calls to online retailing to massive database computing, takes place on someone else's hardware. This includes everything from, customer relationship management (CRM) software delivered over the Web, to Yahoo Mail, so it's pretty open ended.

The more useful answer is that cloud computing has crystallized into several distinct markets with one common feature: Computing services involves zero infrastructure on your end, practically instant delivery in whatever quantity of services you need and flexible pricing. You pay only for what you use rather than what you might need. The three most well-known markets are Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS).

Infrastructure as a Service cloud model
The most widely used cloud marketplace is server and storage cloud computing, which is known as Infrastructure as a Service and led by Amazon Web Services (AWS). Smaller providers have scrambled onboard such as's CloudNine (in beta), Joyent (Solaris servers), and Nirvanix and ParaScale (online storage) Marketers gleefully place the "cloud" label on every Internet-based application they can, but new developments in cloud computing have taken place predominantly in this area.

Online storage is probably the largest IaaS field, with dozens of companies offering online backup, storage and data distribution; from EMC's Mozy and Atmos to iDisk from Apple and Coherence from Oracle. Online storage is booming and is gradually being developed into products that can interact with other cloud services.

In Web-based server computing, Amazon is the 800-pound gorilla, led by CTO Werner Vogels. Amazon quietly devoted a high-powered team to inventing a marketplace for computing power that paralleled its own online retail store in key respects; then unleashed it on the IT world. By June of 2008, Vogels announced that AWS network usage had surpassed its online retail traffic. By the end of last year, cloud computing was nearly double that, and Amazon will add more capacity. The company claims to have 400,000 AWS customers.

All players big and small have scrambled to catch up. IBM's Blue Cloud, which has shuffled along without much traction after the IBM announcement in February that it would sell SUSE server instances, Informix and Websphere DB2 services, through Amazon's AWS (becoming, in effect, an Amazon storefront). Oracle has also partnered with Amazon to sell Oracle software through AWS.

Utility computing giant Savvis announced in February that it too was throwing its hat in the ring with Savvis Cloud Compute, a pay-as-you-go front end to its fleet of data centers and enterprise hosting and managed services products. Savvis' entry into cloud computing may signal a rise in interest among cautious enterprise customers that have been the slowest adopters.

Platform as a Service cloud model
Another fast-growing market that shares the "cloud" designation is Platform as a Service, which short-circuits the need for cloud- or ground-based computing infrastructure and offers developers ready-made platforms to design and deploy applications. Providers offer a tightly integrated and highly specialized set of services that incorporate everything a developer needs from code management and testing to storage and hosting in a Web-based interface.

PaaS is aimed at developers and startups that want to bring products to market quickly and want the freedom to write their own software with the convenience of streamlined production. Downsides include vendor lock-in, as most current PaaS providers do not offer portability or compatibility outside their own platforms. This can be a serious problem if your PaaS provider folds or cannot offer enough capacity to keep an application growing. Companies that already offer software and services online are rebranding as PaaS rapidly. offers, which lets users create applications using its proprietary Apex language and launched Sites (in developer preview) last November, which will let users create and market their own websites through

Google offers Google App Engine for developers that want to build applications using Google tools, powered by Google's infrastructure. In competition with Google, Microsoft is touting the Azure Services Platform, a place for developers to use Microsoft servers and bandwidth to build applications rather than on their own infrastructure. Microsoft also sells SQL Server Data Services (SSDS) its database software-as-a-service. Azure experienced its first outage this month, a signal to IT pros that disaster recovery is still an important consideration no matter where your resources are located.

Software as a Service cloud model Software as a Service is a mature and well-developed market pushed under the cloud computing tent. SaaS is "outsourcing" in its original form, where providers offer customized, hosted software to fill needs previously solved by licensing or developing software in-house. Nuts-and-bolts applications such as CRM, human resources, and payroll, or production drivers such as asset management and dispatching, content management, and collaboration software are ideal SaaS candidates.

Leaders in SaaS --ADP, Citrix, and -- are practically household names, and there are many, more; there is a SaaS provider out there for almost every need. A dizzying variety of providers can be found at the SaaS provider directory

Cloud infrastructure development is helping drive a new wave of SaaS providers. Symantec launched the Symantec Protection Network last year offering online backups and has added remote access (in beta, based on pcAnywhere) and secure messaging.

Meanwhile, hardware giants like Dell and HP have taken different approaches. Dell Cloud Computing Solutions is re-branded hosting services and HP's foray into direct cloud services sales ended recently when it dropped HP Upline, an online storage service and instead has focused its efforts on selling HP iron to cloud providers.

Traditional hosting companies like ServePath and Rackspace Managed Hosting have begun to offer cloud services since they already have the data centers; GoGrid from Servepath competes with AWS on service and support levels, and Rackspace has poured resources into Mosso to offer on-demand servers and storage. FlexiScale and several smaller competitors have also pitched in, but few have established the simplicity that of Amazon.

Venture capitalists eye cloud opportunity
Venture capital firms have also taken notice; cloud computing is a bright spot in a gloomy economy, and investors are looking at startups that use or deliver existing cloud services in innovative ways. The 2-year old startup RightScale, which offers a portal with pre-built tools and products for use with AWS and other IaaS providers, rounded up $13 million, principally from tech investors Index Ventures and Benchmark Capital. Skytap, which provides preconfigured "virtual labs" for software development and testing recently won $7 million from Ignition Partners, Madrona Venture Group and Washington Research Foundation. Venture capitalists are cautious with their funds but have looked to cloud computing as a relatively safe bet. Even in these rough times, IT spending is predicted to grow, if not as fast as it had, and cloud computing is considered a money-saving approach.

Industry analyst firm IDC predicted that between 2008-2012, worldwide cloud computing spending would triple from $16.2 billion to 42 billion worldwide. "This rapid growth is being driven by the ease and speed with which users can adopt these offerings," said IDC senior VP and chief analyst Frank Gens in an October blog post, "as well as the cloud model's economic benefits (for users and suppliers alike) - which will have even greater resonance in the current economic crisis." IDC predicts that cloud spending will increase at five times the expected growth rate of traditional IT spending (27% compound annual growth rate versus 9% for on-site IT expenditure).

Cloud still taking shape
Cloud computing is still taking shape, but the basic outline is clear: It is on-demand access to services and infrastructure that previously had to be built, bought or licensed. The flexibility of virtualization and economies of scale enable data centers to use computing power so efficiently that they can rent computer time and services extremely competitively to even the largest consumers, and advances in the delivery of that computing power, led by Amazon's storefront model, mean that consumers can pick and choose with ever-increasing ease.

The economic downturn has made companies large and small desperate to spend less; so data center plans have been shelved in favor of virtual servers and an operating budget. IT pros have found that they can get off the ground without spending more than they need. Startups have sprung up around the cloud infrastructure to deliver that capability in ever-increasing variety and sophistication, and real-world examples are multiplying.

Concerns remain around security and reliability, but confidence is growing as major players step into the game and the cloud markets continue to improve even in a dire economy.

Carl Brooks, Carl Brooks is a freelance writer who covers IT, the Internet and politics. Brooks has spent more than 10 years working in the field as a consultant and administrator for small and medium-sized businesses, helping them develop systems and services on Microsoft and Cisco platforms. Brooks graduated from the University of Massachusetts-Boston with BAs in English and History.

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