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Suddenly, infrastructure is cool again

Cloud computing would have happened anyway. But the recession has given IT a more pressing reason to consider making the switchover.

About two years ago, Jeff Bezos used the occasion of his appearance at the Web 2.0 Summit to talk up the merits of EC2 and S3, Amazon's entries into the then-nascent area of cloud computing.

The predictably perky CEO was enthusiastically regaling a standing-room-only ballroom about a future in which his company would sell data storage infrastructure and server capacity by subscription: the idea being that customers of the new services could move quickly from idea conception to a successful product by farming out the infrastructure side for Web scale computing to Amazon.

Now, that's hardware! John Deere

"We make muck so you don't have to," Bezos joked.

It was an interesting idea but a left turn for Amazon. I remember that the guys sitting next to me weren't equally impressed by the pitch. They joked among themselves that Amazon was a company that sold books. Who was Bezos kidding?

Well, we know how that story turned out. Bezos' timing was propitious. Amazon happened to go into Web-based services around the same time that customers had started to lose their fear of "the cloud." Not everyone, mind you. But increasing numbers of start-ups and small companies were receptive to the idea that they could increase their server and storage capacity on a subscription basis. With millions of people going online to store data, run applications, or communicate via Webmail services--and all that functionality stored on the cloud--now they could participate in that computing shift without breaking their budgets.

This all was proceeding apace. But it was a slow transition. Then came last fall's financial meltdown, and suddenly, cloud computing's proponents had a timely marketing message. On the "Charlie Rose" show Thursday night, tech pioneer-turned-prescient-doomsayer Mark Andreessen, took note of the impact this computing shift has had on the tech business.

"So you've got a whole generation of start-ups that are basically just a couple of programmers with a couple of laptops, and they upload everything into the Amazon cloud. It's pay-by-the-drink like utility. So all of a sudden, you have this whole new wave of Internet start-ups getting started for practically no money, right? So there is a level of innovation. Every kid coming out of Harvard, every kid coming out of school now thinks he can be the next Mark Zuckerberg, and with these new technologies like cloud computing, he actually has a shot."

That's the classic sales pitch on behalf of cloud computing but Andreessen basically has it right. What's new is that with the economy going through a rough patch, this is turning out to be one of the few bright spots in an otherwise gloomy tech landscape. IDC predicts that cloud computing will account for about 30 percent of new growth in the Internet over the next three years. Poor economy or not. "It's not a surprise," said Frank Gens, the firm's research chief, who contends that the financial crisis only magnifies the benefits of the economics behind this computing model.

But here's the rub: While many executives responsible for their companies' IT operations grok the vision, they still refuse to make the switch. More than 60 percent of the companies surveyed recently by Kelton Research reported they did not use cloud-computing technologies, and most of them have no plans to use them anytime soon.

Chalk up their lingering resistance to a couple of old bugaboos which have been around since the days when "MIS directors," pressed to decentralize their computer operations, ruled the tech roost: security and fear of loss of control. If past is prologue, those issues will get sorted out over time--the same way that the sundry issues surrounding client-server and Internet-based computing models ultimately got resolved.

Capacity on demand is a big deal, especially for start-ups that are in no position to be buying servers. With API deployment, you say "launch" on these virtual servers and you're off to the races. It's just a lot more convenient to have an Internet-based data center.

Not long ago, Sun Microsystems' Dave Douglas told me that "every one" of his conversations with customers ultimately comes around to a discussion of where the cloud is heading. That pretty much jibes with what I've heard from executives at other hardware and software companies. Pay attention to this trend because it's taking place in real time, away from the media's glare. In an age where Twitter, Facebook, and a laundry list of forgettable social network doo-dads have dominated our attention, all of a sudden, infrastructure has become cool again.

Who woulda thunk it?