San Jose, Ca. -  In the very early days of the Internet and connected networked computing in the late 1980s and early 1990s, the original relationship between a user device and the server “out there” on the World Wide Web was what is termed a "thin client-fat server" relationship.

In this paradigm, the local Internet-connected computing device (iAppliance) –  be it a dumb terminal in a corporate network connected to a main frame computer or a home computer running with a primitive 10 to 20 MIPS processor was connected to a vastly more powerful remote server for complex computing chores and data processing.

In the late 90s and through much of the early part of this decadee, with more powerful home computers and increasingly more connected and powerful handheld and network connected mobile information appliances, the clients have become fatter with as much compute resources if not more than most home computers of a decade ago.

However, if Nickolas Carr, an author and keynote speaker at the Directions Conference here is right and the fat and resource right server and much thinner client may be coming back with the emergence of what is called “cloud computing.”

“Cloud services,” he and other speakers at the conference say, are poised to take off and could radically reshape the computer industry, opening up new possibilities and threatening today's dominant computer makers.

"We are moving to an assumption that more and more Information Technology assets will be supplied as a utility over the network," said Carr. “This will represent big new challenges and opportunities [because it will lower] the whole cost base of computing."

He said cloud services can effectively create a global supercomputer that can be shared in ways similar to the Internet today. "Figuring out how to harness this world-wide computer may be the big enterprise for this century," he said.

"The price of computing will go way, way down and accessibility of computing will go way, way up," Carr added. "That will force companies to re-think how they build their products and connect with customers," he added.

The big promise of cloud computing is it may unleash new innovations just the creation of the electric utility grid did a century ago, said Carr, author of the 2008 book "The Big Switch" which compares the two trends.

The electric grid spawned "a complete re-thinking of manufacturing and the creation of the assembly line," he said. It also "created an explosion of home appliances and a re-thinking of media as broadcasting and cheap media devices moved into the home."

The movement to cloud services has already started among companies who are looking for ways to reduce costs during the down turn in the economy. Companies spent $16.2 billion on cloud services in 2008, a figure that will rise to $42.3 billion by 2012, according to International Data Corp., which hosted the Directions conference, about a four to nine percent increase, but a small fraction of the future possibilities.

At the conference, Frank Gens, a senior IDC analyst, said cloud services will make up as much as 25 percent of the new growth in IT spending by 2012, one of the few segments of the economy not affected by the downturn.

"The idea of service delivery through the cloud is of very high interest in the market right now," said Gens. Companies and services such as Bechtel, ESPN, Facebook, Hulu, NASDAQ and Photobucket are already using cloud services.

In a survey of 244 users conducted by IDC about 15 percent of companies use the cloud services now and 30 percent said they will use them in three years.

"Big companies are making investments in cloud computing, but they haven't figured out how to make money from it," said Carr. "In the next five years or so we will see even greater economic disruption of the IT business and it will interesting to see which of the big guys can make the switch to the new world." he said.

"It requires a totally new way to think about our offerings and who the customers are."

To learn more, go to www.idc.com. 

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