Sept. 21--For many young companies, cloud computing comes as naturally as doing an online search.
You ask for a result. It almost magically appears. And you don't worry too much about the details of how it all happened.
Startups try to minimize spending, so renting servers in the cloud typically costs considerably less than spending hundreds of thousands of dollars to buy and run your own data center hardware.
Mass Relevance, a fast-moving Austin startup that runs social media content into "engaging brand experiences" for its client companies, is one of those young cloud-centric companies.
It pulls in social media content related to clients -- from tweets to Facebook posts and YouTube videos -- brings them together, filters them to eliminate offensive items and puts them onto digital displays that run on billboards, stadium jumbo screens, Websites, mobile devices and TV screens.
It can take a lot of computer power to do that, especially when the company is supporting a special event, like a music awards show or a pro basketball playoff series.
Those kinds of events make its computer traffic really "spikey." Eric Falcao, the company's chief technology officer and co-founder, said the company can require 10 times as many servers during a special event as it does during an average day.
That is a big part of why Mass Relevance has embraced the cloud. It does business with the biggest of the "public cloud" service providers, Amazon Web Services. Amazon has tens of thousands of servers in nine huge data centers around the world, but to Falcao, they are just lines on his laptop computer screen in Austin.
If he needs more servers to handle more traffic for the company, he can set them up it automated fashion and keep them up for several hours or several days or longer.
"We love it," Falcao said. "In the cloud, you can operate and treat IT (information technology such as servers and other data center gear) like a commodity. If something (bad) happens on a server, we can shoot that server in the head and bring up another one to replace it in five minutes. It is very nimble for us. And it is nice to only pay for IT when you need it."
The company built its software around the cloud with special adaptations to work with Amazon's cloud operation. But Falcao said his company could modify the software to work with another cloud provider without too much effort.
Depending on how you define the terms, some form of cloud computing has been around for at least the past 15 years, but now things are moving really fast.
Amazon Web Services, which is owned by e-commerce giant Amazon.com, has been leading a group of companies that are spending heavily to offer cloud services to thousands of businesses. Netflix, the video rental company, is one of its cloud customers.
Its cloud business took in at an estimated $1.7 billion in revenue last year, which was up about 76 percent from the year before, according to Baird Equity Research, which credits its technology, its ease of use, its introduction of new services and its regular price cutting for Amazon Web Services' popularity. But it isn't the only active cloud player. Google Inc., Rackspace Inc. and Microsoft Corp., among many others, are active cloud players.
"The cloud is real and (Amazon Web Services) is the leader," said Baird analyst Jayson Noland. "It is coming after the IT world. It cannibalizes demand (for data center hardware) and puts pricing pressure on services. Cloud computing is going to force (the traditional computer companies) to do things differently."
Noland acknowledges that the cloud revolution is going to take time to play out. It is one thing to win over tech-savvy startups and quite another to win over well-established companies that have made far larger investments in their own data center systems.
But even so, the growth of cloud computing is making its impact felt. Baird estimates that every dollar spent on Amazon Web Services translates into $3 to $4 less spent on data center hardware. Since Baird expects Amazon to expand rapidly in the coming years, it estimates that when Amazon reaches $10 billion in revenue for cloud services, that could translate into a $30 billion to $40 billion hit for hardware makers such as Dell Inc., Hewlett-Packard Co., IBM Corp. and others.
Each of those hardware providers has its own strategy in dealing with the cloud.
HP and IBM have cloud operations of their own that are somewhat comparable to Amazon Web Services.
Dell Inc. started in that direction and then changed gears this past spring. It bought a Minnesota company called Enstratius, which makes software to help companies navigate and manage services from several cloud providers. Dell's new plan is to help its customers get ready for cloud computing and to get them the tools to manage their operations in the cloud.
Dell also sells servers to cloud providers, which is narrowly profitable business, analysts say, because those companies have plenty of clout to drive prices down. Even so, HP and IBM are gearing up their operations to compete in that growing market segment.
Amazon Web Services is big and growing, but it isn't perfect. The cloud provider's East Coast data center had a glitch last Christmas Eve that caused an outage to Netflix. Amazon later apologized for the problem.
But Eric Falcao at Mass Relevance is a happy camper. He likes that Amazon Web Services keeps offering new and better services that makes things simpler for companies like his.
"It just keeps getting better every day," he said. "They are reducing the friction (for customers) and making things easier. That is really a winning formula."
(c)2013 Austin American-Statesman, Texas
Visit Austin American-Statesman, Texas at www.statesman.com
Distributed by MCT Information Services