Cloud computing: misunderstood, but really not that complicated a concept

Consider these statements:

  • Baseball is a game where the pitcher throws to the catcher.
  • An iPhone is a device that lets you call anywhere in the world.
  • The Grand Canyon is a tourist attraction in Arizona

You’ll have noticed that these statements aren’t wrong, per se. But they still take you aback, don’t they? They miss the point, miss the magic, neglect the important differentiators. By explaining too little, defining the subject too narrowly, they explain nothing that’s really useful.

Here’s another:

  • Cloud computing is where you have a lot of intelligence in the network and it’s available from wherever you need to get to it

A distressing portion of mainstream media covering cloud computing has decided that the best way to explain the phenomenon is first to make hand-waving general statements such as the above example from BusinessWeek, and then cite a few consumer-understandable examples such as in this piece from NPR: “Do you have a Yahoo e-mail account? Maybe a Gmail account? Do you put up pictures on Flickr? Perhaps you’ve started keeping your schedule online. If so, then you are using cloud computing — that’s what tech companies call it when people work and store information on the Internet.”

Flickr, Gmail, and Facebook are great services, but declaring that they represent the burgeoning trend of cloud computing is as incomplete and unsatisfying as explaining the Grand Canyon as just a tourist attraction in Arizona.

The problem here, and the reason that so many of these mainstream articles get it so wrong, is they’re trying to explain cloud computing as a consumer-oriented phenomenon, and it’s basically not. Not the exciting or “new” part, anyway. Even technology vendors drift into this as they try to tout their cloud offerings: witness a recent TV commercial from IBM entitled “My Cloud: Virtual Servers on the Horizon”, a commercial which would work just as well if it were titled “the incredible power of the Internet”, or even, “aren’t computers cool?” Similarly, that cloud computing “definition” from BusinessWeek is, quite frankly, nonsensical in its broadness: it not only completely misses the point of what makes cloud computing relevant and compelling as a game-changer, it even fails to distinguish it from the last 15+ years of the Internet in general.

Mainstream media drifts into this oversimplification in part because they’re leery of delving into technical arcania (virtualization, scalable architectures, APIs) that many of their readers can’t relate to. Yet, there’s actually no need, when you try to explain its real impact, to make cloud computing sound geeky and complicated; it’s not, at least at core. I’m going to trot out some analogies here; like most analogies, they’ll necessarily gloss over some important complexities, and will only go so far before they break down. Nonetheless, they should give you a better idea of what’s different about this trend, in a way that talking about storing your photos on Flickr won’t.

Cloud computing is simply a way for a company to use someone else’s computing resources (servers, software, etc.), on demand, to fill its need, rather than buy and manage and maintain those resources itself. Instead of bulking up its own data center, the company uses as little or as much of someone else’s as its immediate needs dictate, on a pay-as-you-go basis.

Does that still sound complicated? Okay, think ZIPcar. Rather than own your own car, (purchase it, license it, insure it, maintain it, fuel it, pay to park it, etc.), you can choose to use a ZIPcar that’s parked near where you live. You reserve it, walk up to it, and drive it away as if it were your own. You pay an hourly or daily fee, to be sure, but perhaps you don’t need “fulltime, anytime” access to a car, and it works out to be both easier and cheaper to get one when you need it, and not worry about all the ancillary details. Are there downsides? Sure, and these will vary depending on your situation. This solution may be great and cost-effective for you, but not work at all well for your neighbor, who has different needs.

In the not-too-distant past, ZIPcar wasn’t available to you as an option. Neither was cloud computing. If you started a company that provided an online product or needed internal systems, you bought servers. And electricity and cooling. And storage. And software. And you hired people to set that all up for you, and keep it all operating smoothly. And you tried to anticipate your demand, and to make sure you had just the right amount of capacity (not too much, not too little) for your customers or users. Almost always, that meant you bought ahead of the curve, and you sat on (and paid for) your excess capacity while the demand increased.

Enter the cloud. Now, depending on your company’s situation and needs, you don’t need to sink in resources and funds (and risk) up front. Reserve your server, and (metaphorically) walk up to it and drive it away as if it’s yours. Let it go when you’re done, and poof, it’s effectively gone; no more overhead. Think about the sheer power that possibility represents. Think of the reduction in logistics and interdependencies. Think about how much less risk the company has incurred, if your plans happen to change. The potential independence, enablement, and empowerment that the cloud brings, particularly for new and small businesses, is as close as anything I’ve witnessed to the way the industry was shaken and shaped by the advent of the PC, starting in the early 80s. And that “disruptive technology” nature of the cloud, astonishingly, is what’s being missed by the kinds of articles in BusinessWeek and NPR that I’ve cited, not to mention by the myriad old-timers who like to sneer loftily that nothing here is new.

Lest I be accused of being starry-eyed about the cloud (to mix some firmamental metaphors), let me make sure I acknowledge here how early this technology is, how key aspects are still being worked out, and that it’s not a panacea. And, like ZIPcar, it’s not for any and every situation. But none of those caveats detracts from the cloud’s potential and the ground-shaking nature of the phenomenon.

It’s all about cost, flexibility, time to market, and risk mitigation, basically, for businesses. Just a couple of quick examples: eHarmony recently did a project where they took a monthly expense of $5K down to $1.5K with cloud computing. And here’s another study of a startup using cloud approaches and reaping a lot of benefits. As a CTO/CIO, I can personally attest to how much time and heartache goes into planning capital investments and attempting to right-size infrastructure; anything that can simplify and streamline that thorniness is welcome indeed.

Remember, everyone wants IT to be less costly and more flexible, to focus on business needs more than on technical minutiae, and to be able to turn on a dime to meet new needs. Cloud computing will be key to fulfilling those desires. In fact, I believe it will be revolutionary to the industry over the coming years.



  1. “Mainstream media drifts into this oversimplification in part because they’re leery of delving into technical arcania (virtualization, scalable architectures, APIs) that many of their readers can’t relate to.”

    I’d say mainstream media drift into oversimplification because they don’t understand the technology and they generally don’t understand the costs involved in spinning up computing resources nor why a company may only need temporary resources.

  2. Peter Kretzman says

    Well, yes, there’s that too. And that’s probably the main reason, you’re right. I was being kind, perhaps. I was specifically thinking of the BusinessWeek’s author and how he responded to his critics on that article: “BusinessWeek doesn’t write about scalable architectures.”

  3. Great write up, Peter, thanks. What’s even more interesting is how the cloud is being used in unique ways to not only save companies money but to make money as well. Specifically coming to mind is start-up Digsby, an instant messager/social network aggregator, who has been using grid computing to run a research project as a revenue model:

  4. Brilliant article Peter, just stumbled upon this. I will link to this from my site as well to clarify for CIOs looking to explore the advantages of the cloud minus the hype.


  5. Peter,
    Great article, summarizing what cloud computing is in essence. I agree with most of your points, but would like to add that in reality most companies will probably primarily benefit from, and implement, some type of “hybrid” cloud strategy in their cloud computing endeavors – combining internal (private) and external (public) cloud architecture. I address this shortly in a blog post: Exploit the benefits from Public and Private Cloud Computing

  6. Thanks for your explanation Peter! Allthough I have a question about it.. You said: ‘it will be an advantage particularly for new and small businesses’. I miss your point here. In my vision, just big businesses could benefit of this, instead of the smaller ones.

    Jeah, in large companies it’s harder to adopt the whole system, and new small businesses could easily startup with an Cloud solution.

    I am entrepreneuring in the webdevelopment branche, and some colleagues told me to invest in cloud systems, because this would be better for my customer (all Small and medium enterprises). I can’t find a reason why it would be better for them when I provide a cloud solution (for their website) instead of website hosted by a webhosting company.

    What do you think? Am I right, because I only target at the website, and not at the entire IT system of the company, or are there other reasons why I should invest in Cloud systems for webdevelopment?

  7. Thanks for commenting, Peter. My post really pertains to the design and deployment of larger information systems, not simple web sites, where, as you note, a hosting company is a fine and easy choice. One advantage of the cloud is making it so no one has to worry, in a small company just starting to launch a product, about buying servers, scaling rapidly if demand soars, etc. Larger companies can also benefit, but they have a significant transition problem: installed base of servers, applications, and (last but by no means least) employee mindset and vested interest.

    So I agree with you: if you’re designing relatively simple websites with few “moving parts” (by which I mean points of integration, complexity of data flow among systems, etc.), I don’t think it matters much to you or your customer to pursue a cloud solution.

    Let me know if I’ve misunderstood your question somehow.


  8. Peter-
    Thanks for this post. I agree that mainstream media either a) doesn’t get it or b) gets it, but realizes people gravitate to coverage of “the sky is falling”-type messages. And, I think it is important to step back and look objectively at what cloud is and is not.

    Although, as someone that spends most of their working time looking at software licensing, there is a complex side of cloud that we should not overlook or oversimplify. Licensing software for use in cloud environments is not easy to do. And, figuring out the economics of cloud (especially when software is involved) and managing the costs of a dynamic environment is not easy for enterprises either, who are used to counting things once or maybe twice a year. Traditional asset management practices are not elastic enough to support cloud.

    I wish these issues were simpler… I think my head would hurt a lot less.


  9. Yes, I totally agree. There are most certainly thorny and important issues to work about about the execution/operation of cloud computing, and I’m by no means dismissing that this is hard work. But the basic concept itself, and what’s disruptive about it, seems to often get blurred both in the mainstream media and in vendor literature. Thanks for commenting, Amy.


  1. […] Cloud computing: misunderstood, but really not that complicated a concept by Peter Kretzman on CTO/CIO perspectives […]

  2. […] confused about #CloudComputing? Posted on October 29, 2009 by Raj Badarinath Writes Peter Kretzman: Flickr, Gmail, and Facebook are great services, but declaring that they represent the burgeoning […]

Speak Your Mind


This site uses Akismet to reduce spam. Learn how your comment data is processed.