The cloud is a fungible, elastic computing infrastructure

by Michael E. Driscoll | June 27, 2008

Over the last few days I’ve attended a couple of events here in San Francisco discussing the promise of cloud computing. I believe there are several reasons why this technology represents a paradigm shift (and one that does justice to Kuhn’s original meaning).

First, what is cloud computing? From the ten-thousand foot view, it is technology that uncouples web servers from their underlying hardware; it re-conceives them from being physical machines with plugs into “instances” running on top of the hardware, bundles of bits that can be moved and multiplied as easily as the software on our desktops. The “cloud”, like the “web” , is an abstraction whose physical reality — data centers with thousands of softly humming servers — we need not care about.

This shift has far-reaching consequences for the economics of computing, among them:
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Data: bigger, faster, cheaper. And more valuable than ever.

by Michael E. Driscoll | June 1, 2008

“Information about money has become almost as important as money itself.” — Walter Wriston, former Chairman of Citicorp

“Some firms believe that in 10 years half their business will come from moving information about goods, rather than moving the goods themselves.” — The 20-Ton Packet, Wired 7.10

Information has always been valuable, but it’s only in the last decade that has it become so dramatically cheap — to store, to move, and to process. But it’s still not “too cheap to meter” (Stewart Brand’s phrase) and probably never will be.

Yet despite this dramatic drop in cost, the real value of information, by any measure, has not diminished. And because the costs of other goods — whether shipping containers, materials, or home furnishings — have fallen more slowly, information contributes an ever larger fraction to a firm’s profits.

A corollary to the falling cost of information, and its persistent value, is that as more kinds of information come online, more of this data is worth keeping. Even data whose value is metered in cents per terabyte is increasingly worth storing, and eventually analyzing, as it may yield several cents profit.
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