Who's paying for cloud computing?

With the advent of cloud computing for the mainstream (read any smart coder) we have seen an explosion of applications that fall into the category of "web 2.o" and social networking. The biggest majority are being hosted on Amazon AWS but with Google Apps Engine and Microsoft's announcement of an S3 alternative, competition has already begun to take effect.

One of the lessons that Amazon has learned from Google is the concept of micro payments adding up to big bucks. Every day I spend a few dollars on Google Adwords to get traffic to DigitalChalk and I spend a few dollars running server instances and streaming videos on Amazon. I'm not making Amazon or Google rich but I spend money with them every single day. There are no other vendors except my utility companies that have their hooks into me that way. I'm not complaining, to the contrary in fact, I can stop spending with either vendor with a single mouse click. I'm choosing to spend money with them because it has a very easy-to-measure return.

To my point, I read today on Charles Coopers blog about the death of Web 2.0 and the emergence of the Semantic Web which as he defines it, is cloud computing running web 2.0 apps. I think his observations are mostly on-target but I think we are going to see a the natural migration from early adopters (like me) to mainstream adoption (enterprise) as the next phase on the cloud.

We recently started working with other businesses interested in migrating from a traditional data center to Amazon EC2 & S3. The payback is typically less than a year and the option to scale will open up new doors to growth. It's only a matter of time before smart CFOs and CIOs in the enterprise market start noticing the benefits of saving 80% on bandwidth and starting up dozens of cloud servers with a single command. The mainstream is starting to realize the real risk is in staying with status quot. Now that Amazon is offering a full SLA I think we will see more mainstream adoption of these cloud computing platforms.

If you want to hear more about how we build our system on Amazon, you can email me at tonymccune(at)gmail(dot)com or visit us at DigitalChalk.