The 10 Biggest Cloud Computing Stories Of 2009

Perhaps the biggest story about cloud computing in 2009 was cloud computing itself. Even as some pundits continued to debate the definition of cloud computing, virtually every IT hardware, software and service company sought to define (and in many cases redefine) itself as a cloud-computing vendor. That's not surprising, perhaps, when Gartner puts the 2009 market for cloud computing services at $56.3 billion, growing to $150.1 billion by 2013. (Merrill Lynch goes even further, predicting that revenue from cloud computing services and applications will hit $160 billion by 2011.) Certainly cloud computing isn't a flash-in-the-pan. It's a new paradigm that helps IT managers leverage resources outside their data center, potentially lowering costs and providing unprecedented levels of flexibility.

But Gartner also had a point earlier this year when it called cloud computing the most hyped subject in IT. And a McKinsey & Co. report added fuel to the fire by questioning the value of cloud computing, even saying it could double data center costs for large companies. At times in 2009 all the breathless talk of cloud computing had faint echoes of the giddy era in the late 1990s -- and we all know how that turned out. Here's hoping the promise of cloud computing proves to be more real.

Who'd have thought that, the online retailer of books, CDs, chainsaws and just about everything else, would one day become an IT service powerhouse. But with IBM, Oracle, Novell, Salesforce and seemingly every other IT vendor supporting Amazon's Elastic Compute Cloud (EC2) as a foundation for running software in the cloud, Amazon in 2008 became the de facto standard for cloud computing infrastructure.

While Amazon EC2 launched in 2006, it dropped the "beta" label only in October 2008 and it was just in this past year that the service really broke out. Along with the growing roster of IT players that make their software available through EC2, Amazon in August unveiled a service for building private cloud systems and in October debuted a cloud database service based on the MySQL database.

Amazon also has become a leader in the online data storage arena with its Amazon S3 (Simple Storage Service) hosted storage offering.

Perhaps the company least likely to be associated with cloud computing is Microsoft, given how the company came to rule the world during the IT industry's client/server years. But just as it managed to reinvent itself in the mid-1990s and embrace the Internet, Microsoft is once again making waves in a technology area that many wouldn't consider the company's natural territory.

Last month Microsoft took the wraps off Windows Azure, the company's cloud development platform that chief software architect Ray Ozzie (left), speaking at the Microsoft Professional Developers Conference, described as "a cloud OS designed for the future, but made for today." Azure will offer a way for developers, systems integrators and ISVs to launch pay-as-you-go cloud applications.

A cynic might see Azure as just a way to get customers to run Windows applications over the Internet using Microsoft's data centers. But throw in such pending products as Microsoft's Office Web Apps (due in the first half of 2010) and it's clear that Microsoft is serious about cloud computing. Oh sure, it might be a Microsoft-centric cloud. But are all the other cloud-computing vendors any different? Still, one definition of an "azure sky" is one that's cloud-free. Hmmmm...

There were some pretty scary headlines in 2009 about service outages, denial of service attacks and other incidents that must have given pause to IT managers mulling the idea of relying on cloud computing for much of anything.

Perhaps no incident raised a bigger red flag than the day in October when T-Mobile's Sidekick service -- operated by Microsoft's Danger subsidiary -- failed, erasing some customers' personal data in the process. While much of the data was eventually restored, the service outage lent ammunition to those who question the stability of cloud services.

Other incidents throughout the year, ranging from distributed denial-of-service attacks to Google GMail outages, certainly didn't exactly boost confidence in cloud computing. Perhaps the biggest shock came in September when Google, in a 10-Q filing with the Securities and Exchange Commission, admitted that some of its most important data center systems "are not fully redundant." Would you trust your business to them?

In what is seen as a vote of confidence for cloud computing, the Los Angeles city government decided in October to adopt Google's e-mail and on-demand office applications for approximately 30,000 city employees under a $7.25 million contract with systems integrator Computer Sciences Corp. Google and CSC beat out Microsoft, which also bid for the contract.

The Los Angeles City Council City approved the Google deal despite concerns raised by the city's police officers' union, the L.A. City Attorney's Office and privacy advocates about the security of data stored online rather than in on-site servers.

Cloud computing was also endorsed by the federal government in 2009, as evidenced by the September announcement of, an online storefront where government agencies can purchase online applications from the likes of Google and was one of the first cloud-based initiatives launched by federal CIO Vivek Kundra (left) and federal CTO Aneesh Chopra, who are championing a more open, transparent federal government that embraces information technology. Federal agencies are expected to begin receiving guidance on shifting to cloud-based technologies by 2011. VARs that work with the government note that cloud computing is officially called out in the FY2011 budget guidance from the Office of Management and Budget.

With its broad range of database, infrastructure and application software, Oracle is as well positioned -- perhaps better positioned than any other vendor -- to be a leading supplier of IT for cloud computing. So why is CEO Larry Ellison (left) devoting so much energy to bashing it?

"My objection to cloud computing is the [assertion] that cloud computing is not only the future of computing, it is the present and the entire past," Ellison said during a Q&A session at a dinner event at the Churchill Club, a Silicon Valley speaker forum. "Google's now cloud computing. Everybody's cloud computing. All it is, is a computer attached to a network. What are you talking about?"

Ellison has a point. While the core concept of organizations tapping into IT resources outside of the data center is sound, the cloud computing hype has reached such a level that every kind of computing is cloud computing and every IT vendor is redefining itself as a cloud computing leader. IT vendors and their channel partners would be wise not to oversell cloud computing and its potential benefits.

IBM, in 2009, made it very clear that it's serious about cloud computing. Throughout the year the company kept up a steady drumbeat of cloud-related technology announcements that spanned many of the IT giant's businesses and product lines.

Early on the company debuted its LotusLive portfolio, making its Lotus collaboration and communications applications available through the cloud. That was followed up with a cloud-computing appliance incorporating the WebSphere application server for customers building private clouds, then a version of the Rational toolset for developing and implementing cloud-computing software.

In October IBM announced that it was getting into the cloud data storage business with its IBM Smart Business Storage Cloud service. And last month the company said it would develop commercial cloud-based business intelligence technology and services for customers based on "Blue Insight," a private cloud business analytics system the company created for its own 200,000 employees.

Virtualization and cloud computing, two hot IT trends, increasingly dovetailed in 2009 as vendors and their solution provider partners realized that virtualization can be a critical element in building private computing clouds. VMware moved to position its vSphere 4 virtualization technology, introduced in April, as what the company modestly calls "the industry's first cloud operating system." CEO Paul Maritz (left), speaking at VMworld in September, pitched the company's vCenter and vCloud management software for managing virtual data centers and cloud-based applications.

VMware also formed a coalition with Cisco and EMC to create pre-configured hardware/software systems aimed at helping customers build private computing clouds.

Virtualization rival Citrix, meanwhile, continued its own cloud computing push by updating its Citrix Cloud Center platform and creating an alliance with Amazon Web Services under which customers can develop and test cloud applications using AWS.

And at the Citrix Partner Summit in May, president and CEO Mark Templeton said the recession and other issues are making businesses re-think their IT strategies, which is opening the door for virtualization and cloud computing.

One thing that became increasingly clear in 2009 is that despite the hype, conflicting vendor claims and sometimes hazy definitions, cloud computing has the potential to be a major opportunity for solution providers. "The opportunities for the channel have never been greater. We are dealing with disparate technologies and businesses are rushing to leverage the power of ubiquitous computing. And the channel is in the driver seat," said Kim Polese, CEO of SpikeSource, speaking at Everything Channel's 2009 XChange Tech Innovators conference last month.

Polese's argument was that as businesses move from on-premise computing to cloud computing, solution providers will play a critical role in making all those disparate moving parts work together.

IT vendors seemed to catch on to that concept. In August, for example, launched a VAR program specifically for resellers of its cloud computing platform. And solution providers seem to have caught the cloud religion as well. At the Greenpages annual Solutions Summit, CEO Ron Dupler said the Kittery, Maine-based solutions provider has bet heavily on cloud computing, expanding its virtualization consulting services and developing a road map to help customers move to the cloud.