Mashed Articles

[Here is a great article from Forbes on how cloud computing is
fueling the next startup boom.
It is not only the private sector that
is creating new opportunities in this field, but funding councils and
R&E networks are also playing a critical role in the transformation
of the future computing. The recent announcements by Internet 2,
SURFnet, JISC/JANET, etc to broker commercial cloud services for
researchers are great examples of this trend.

In this era of fiscal constraints many funding councils are looking
for industry “partnerships”, rather than simple “partners” in order to
accelerate commercialization of academic research. Moving research
computing to commercial clouds will enable an entire new eco-system of
industry and research applications and tools. A good example is Galaxy
(http://wiki.g2.bx.psu.edu/Admin/Cloud), which is taking the genomics
and bio-informatics research community by storm. Researchers are voting
with their feet (and wallets) to use these commercial cloud applications
because of their ease of use, simplicity, ability to scale quickly, no
need for upfront capital costs for computing and no bureaucratic hassles
to access university computing resources. As well, young
entrepreneurial graduate students, who are fueling the startup boom are
discovering that clouds are a great revenue opportunity through click
compute initiatives that earn them an ongoing revenue stream every time
someone uses their application on a commercial cloud.

Moving research computing to commercial clouds can easily pay for
themselves in energy savings alone. Up to 80% of operating a research
computer is in its energy consumption according to a recent study
(Belady, C., “In the Data Center, Power and Cooling Costs More than IT
Equipment it Supports). If the commercial cloud infrastructure uses
clean renewable energy, then cloud computing can significantly reduce
the carbon footprint of research computing as well.

Most HPC computing at universities is now built around clusters and
it estimated that of 50-80% of the applications that run on these
computers are loosely coupled and therefore could easily be transferred
to the commercial cloud. For those who want to see rapid
commercialization of academic research, the time to move to commercial
clouds is now.

Some excerpts from the Forbes article—BSA]

With all the gloomy economic headlines in recent months, one can be
forgiven for thinking we’re in a hopeless economic morass. But if you
look beneath the surface of today’s technology shifts, you may also see
potential for one of the biggest economic booms in a generation. How so?

http://www.forbes.com/sites/joemckendrick/2011/11/01/cloud-computing-is-fuel-for-the-next-entrepreneurial-boom/2/

As with all other economic booms, this boom will arise from the spunk
and innovation of an emerging class of entrepreneurs, many being young
and just out of (or still in) college, and others being veterans of
workforce experiences relatively void of opportunities. In this next
boom, another thing will be different as well – today’s entrepreneurs
have an incredible resource available at their fingertips at minimal
cost – cloud computing.
Unemployment is high right now, and there are many, many, many
professionals who see the startup route as a more sustainable
alternative to seeking full-time employment. There is now an incredible
abundance of resources available on demand, for little upfront cost, to
businesses.
I’m not just referring to companies that are offering cloud services –
rather, companies of all types can now be created and supported. I’m
talking about law firms, travel services, insurance brokerages,
scientific ventures, entertainment sites and just about everything you
can imagine. I’m also talking about groups or departments within
existing large organizations, as well as individuals working out of home
offices.
Last week, New York Times columnist Tom Friedman made an
interestingobservation about the prospects for our economy going
forward: cloud computing is driving new growth and opportunities. He
quotes Jeff Weiner, CEO. of LinkedIn, who observed that cloud “makes it
easier and cheaper than ever for anyone anywhere to be an entrepreneur
and to have access to all the best infrastructure of innovation. And
despite all of our challenges, it is happening here in America.”
Previously, Friedman referred to this as the “DIY economy.”
There was a time when launching a serious startup required serious
capital. Seed money was required for hiring talent, marketing and
promotion, office space, and for technology to make it all happen. The
technology portion of the equation is suddenly diminishing,
dramatically. Thanks to cloud computing and social networking resources,
it now costs virtually pennies to secure and get the infrastructure
needed up and running to get a new venture off the ground.
One relatively recent survey of 550 startups from BestVendor found a
majority use cloud-based resources: QuickBooks (71%) for accounting,
Google Analytics (70%) for BI, Salesforce.com (59%) for customer
relationship management, and Dropbox (39%) for storage and backup. A
few months back, there was a report about 280 North Inc., a San
Francisco-based startup which produces presentation and Web development
software. The founders said they incurred initial monthly expenses of
about $4,500 a month by using code available free on the Web and renting
storage from Amazon Web Services. As Chris Sacca, a 280 North investor
and former Google Inc. executive, put it: “The biggest line item in
these companies now is rent and food… A decade ago, I don’t think you
could write a line of code for less than $1 million.”
Let me emphasize here that we’re talking about startups. The value
proposition of the cloud is compelling for the first two or three years,
then begin to catch up to on-premises IT costs. And there are small
firms thatprefer to build and manage their own IT from the get-go. But
it’s at that initial startup phase that cloud lowers the barrier to
entry for many innovators. Acompilation of cloud computing stats by
O’Reilly Media shows that companies can save up to 30% in IT costs over a
three-year period employing cloud resources versus on-premises
equipment. A relatively small operation with two application servers
and two database servers could expect to pay about $106,000 over a
three-year period, versus $149,000 for internal IT. For the first year,
the capital requirements for a small server operation are near zero with
cloud, versus $40,000 and up for standard on premises software and
servers.
To get an in-the-trenches perspective, I asked Jason Stowe, founder and
CEO of Cycle Computing, about his experiences as an entrepreneur who
built his business on the cloud and offers the chance for others to do
the same. Cycle delivers high-bandwidth supercomputer capabilities to
scientific, engineering and technical firms — many of which are
startups. “Any size organization can now tap into supercomputing power,
from big companies to start-ups to individual researchers,” he says. He
even coined a term for what his firm is offering: “utility
supercomputing.” Essentially, thanks to cloud, Cycle can make
supercomputing power available to the masses.
And lots of startups and small businesses are taking advantage of this
relatively new cloud resource. Stowe gives examples: a chip design firm
runs simulations of its digital circuits on his firm’s CycleCloud
clusters. Researchers at a bioinformatics start-up use Cycle’s cloud to
index and query genomics data to help fight disease. A young,
up-and-coming scientific instrument company uses Cycle’s clusters to
process the high volume of data that comes off their products.
“In these cases, start-ups can focus on their core-competency while
still accessing a supercomputer that only Fortune 100s could build and
operate before,” says Stowe. Many of the startups he works with would
not have been able to get off the ground without cloud offerings such as
that Cycle is offering. “Science-heavy start-ups would require much
larger capital investments to get off the ground if they didn’t take
advantage of cloud and utility supercomputing offerings,” says Stowe.
“For example, 30,000-core cluster for top-five pharma would have cost $5
to $10 million and about six months to build.” With Cycle’s cloud
offering, the project took eight hours to implement, at a cost of about
$10,000.
Oh, and by the way, Cycle Computing itself is built on the cloud. “Cycle
itself owns no servers,” Stowe says. He started the company in 2005
with no investors and $8,000 in capital — a real bootstrap story.
“Thanks to the cloud we can test our utility supercomputing software at
the scales our clients use, with minimal cost.”
If companies such as Cycle Computing are any indication, and with a
confluence of underutilized skills and cheap online resources, we may be
on the verge of an explosion in entrepreneurial activity in the decade
ahead that will rival anything we’ve seen before. The barriers to entry
have been significantly lowered.