The commencement of the cloud

It was my honor to deliver the commencement address at the Indiana University of Pennsylvania’s Eberly College of Business over the weekend. Of course, my topic was cloud computing — specifically, what it means to the new generation graduating this year. Here is an excerpt of the speech:

In case you haven’t noticed, the world of computing is a world of change. Where once we could see and touch the hardware and software we use and the places we store our data, we now abstract away the computer systems and software that process and store our information, both personal and business-oriented.

The facts speak for themselves:

• 56 percent of Internet users use Webmail services such as Hotmail, Gmail, or Yahoo Mail.
• 34 percent store personal photos online.
• 29 percent use online applications such as Google Documents or Adobe Photoshop Express.
• 7 percent store personal videos online.
• 5 percent pay to store computer files online.
• 5 percent back up hard drives to an online site.

I’m sure most of you are on Facebook and are sneaking a quick look at Twitter on your phones during my speech today. I know that you, the class of 2010, “gets it.”

These days the focus is on cloud computing, or the ability to leverage complex and high-value computer systems over the Internet — as you need them and when you need them. Using cloud technology, the playing field for businesses is much more level. Small businesses that once could not afford high-end enterprise applications can now do so by using cloud computing providers such as Google, Amazon.com, and Salesforce.com.

Just a few years ago, it cost more than $1 million just to assemble the technology required to support a high-tech startup. Today, startups use the cloud to access the same or better technology and business applications on demand for a few thousand dollars a month.

But the benefits are not limited to startups. Businesses that do most of their processing within a few months, such as retailers during the holiday season, no longer have to purchase millions of dollars of hardware and software to remain idle for months at a time before they are needed.

In the past, businesses were all about building new systems and data centers. Today it’s about subscribing, auto-scaling, self-provisioning, and paying for computing power the same way you purchase electricity: You pay only for what you use.

Oracle, Microsoft, SAP, and IBM are now facing unlikely competitors — companies that once sold only books, such as Amazon.com, companies that only provided a search engine, such as Google, and companies that came out of nowhere, such as Salesforce.com — that could displace multi-million-dollar enterprise application companies.

The iPad that I’m reading this speech from today is perhaps the prototype for the way we’ll view computers in the future, not as places to store our data, but one of many windows to our data, windows to the cloud.

The movement and direction are clear: Based upon current trends, market experts predict an annual growth rate of 20 percent for cloud computing, set against the overall software market growing at only around 6 percent. Global revenue from cloud computing will top $150 billion by 2013. This includes the shift from on-premise to cloud-based providers. There’s a need for talented people to assist in this migration. Hopefully a few of you will consider that career path.

How we consume computing is changing, and it will change forever. You will be the first graduating class that is wholly affected by this change, no matter what your career path holds. Just as the Web revolutionized the way we consumed content in the 1990s, cloud computing will revolutionize the way we consume applications in the coming decade, and how we do enterprise architecture and IT planning moving forward.

I wish you all a great adventure on the road ahead.

This article, “The commencement of the cloud,” originally appeared at InfoWorld.com. Read more of David Linthicum’s Cloud Computing blog and follow the latest developments in cloud computing at InfoWorld.com.