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									                                                      INNOVATION FOR INNOVATORS

                                                                Roger Smith

                                            COMPUTING IN THE CLOUD
Inside a New York City loft in 2006, two entrepreneurs                   pany “in the cloud.” They can tap into the “cloud com-
are working on the software to launch a new                      puting” services offered by a big vendor like Amazon.
business they call Animoto. They hope to offer a service                 com, relying on Amazon’s ability to purchase hardware
that will allow people to turn a series of photographs                   cheaply, maintain it reliably and staff it competently.
into a simple movie with a nice sound track in the back-
ground. Although their business offers an online version                 Cloud Computing Poster Child
of something found in most photo viewing applications,
they hope that the ability to send the finished product to                Animoto has become one of the poster children for the
friends and relatives will make their service a hit with                 cloud computing concept. This producer of online slide-
millions of amateur photographers. Our entrepreneurs                     shows was able to launch without purchasing millions
have finished the basic functionality of the software, but                of dollars worth of computer equipment, hiring an IT
their next major hurdle is attracting enough venture cap-                department, or selling majority ownership to venture
ital to purchase the server farm and network bandwidth                   capitalists. As a start-up, they really had no idea how big
necessary to go live on the Internet. Unfortunately, this                a customer base they could attract, and therefore, did not
will require them to give up significant ownership and                    know how much IT equipment they would need to pur-
control of their company to venture capitalists. But this                chase. But’s cloud computing service,
is how all companies get started, hoping to                      known as Amazon Web Services, offered a means to rent
make it big like Yahoo!, YouTube or MySpace.                             this capacity by the compute hour, storage gigabyte and
                                                                         network gigabit.
In 2009, however, these entrepreneurs have a new alter-
native that was not available to startups of the past. They              Amazon also offered to scale up and down as the cus-
can rent the necessary computing, storage and commu-                     tomer demand increased or decreased. This was perfect
nication capacity from a large service provider that al-                 for Animoto since they could not predict demand—and
ready has all of these assets connected to the Internet.                 since the demand they actually experienced varied widely
They can pay only for the volume of these services that                  as their service was featured in various press stories. Over
they use, they can quickly add or subtract resources from                one three-day period they rocketed from 25,000 registered
their order, and they never have to take possession of the               users to 250,000 as the result of a posting on the popular
hardware and all of the technical support headaches as-                  web site In a one-week period they ramped up
sociated with it. This will allow them to retain more                    their usage of Amazon computers from a couple of dozen
ownership in their fledgling company, hopefully keep-                     machines to nearly 5,000 machines (Figure 1).
ing millions of dollars in their pockets instead of the
venture capitalists’ pockets. They can launch their com-                 What is it?
                                                                         Cloud computing has become a hot term in the last few
                                                                         years, but a clear description of what it is, what it can do,
Roger Smith is the chief scientist and chief technology                  and why companies might use it is often difficult to find.
officer for U.S. Army 
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