The rise and fall (and rise) of cloud computing

The concept of a cloud as the paradigm for abstracting the complexity within traditional data center operations and computing began with network administrators. They used a cloud metaphor to document the details of large local and wide area networks. When they depicted something as a cloud, they would reference it as "all the users" of an application or resource, or "the public network" or privately owned wide area network (WAN) resources within an organization.

Therefore, the cloud metaphor was used to show abstraction from physical or logical resources within a datacenter or throughout an organization.  This is an apt metaphor for one of the enabling technologies of the cloud: virtualization.

We know the concept of cloud computing is not new. During the frantic days of the dotcom era, many startups that wished to provide goods and services over the Internet could not afford to build the required infrastructure to provide those services. This need caused a dramatic surge in new offerings by other startups. These companies embraced the American entrepreneurial spirit by providing outsourced services for IT. They were dubbed as SaaS (software/storage as a service) providers or application service providers (ASPs).

Those were heady days, and many of the large hardware and software vendors joined the party. Sun Microsystems, EMC, Cisco, IBM, Compaq, HP, Digital Equipment and others' sales and stock prices climbed as many of the ASP and SaaS providers kept placing orders for more and more powerful computers and storage to meet the high infrastructure demands of the growing Internet.

Then the bubble burst.

As the mood of the country was transformed after 9/11, many of the over-leveraged small startups that provided goods and services over the Internet went out of business. The demand for outsourced infrastructure, application and network services dropped dramatically as the economy shrank. The small Internet providers whose sole revenue stream was advertising folded. Those who invested heavily in ASP and SaaS providers lost their shirts, as many of the companies also went under. The moral of the story here is the concept of utility/service/cloud-based computing was a good one, but the business model was too fragile.

Today, the cloud's time has finally come, and I'll explain why in my next blog.

Christopher Poelker is the author of Storage Area Networks for Dummies,  the vice president of enterprise solutions at FalconStor Software, and deputy commissioner of the TechAmerica Foundation Commission on the Leadership Opportunity in U.S. Deployment of the Cloud (CLOUD²).