[jedsmith]

The cloud significantly lowers capital expenditure to get into an Internet-enabled business, which cultivates the very startup ecology that Y Combinator exists to leverage and support. Those teenagers who started the Facebook Pokemon game would have never had the resources to build a scalable solution with hardware that they own. (That is, unless Y Combinator paid a lot more money as part of participating. They might also be a bad example, because I remember that one of them had a successful sale...it's true for a lot of other ideas, so work with the example.) The cloud lowers the barrier of entry enough that good ideas can be explored and built, with very little financial risk to those getting into it.

This was the role of shared hosting in the past. Several years ago, everybody realized that having root is better. Now, instead of colocating two servers and negotiating transit and dealing with remote hands, you can spin up two Linodes for $40 and have enough power to build anything. Critical mass? Add three more. You're not waiting for a shipment of servers to the datacenter to handle a sudden load from a positive mention on HN.

Saying that the cloud is a fad and we should all own our gear does two things: (a) increases humanity's carbon footprint, since most organizations never utilize hardware to their full potential, and (b) guarantees that only those with significant capital to buy a fleet, a cage, and power will ever compete in the Internet space, which is where we were many years ago. It is very arguable that the cloud is progress, and everybody sitting on the sidelines calling it a "fad" is scared by it.

Jeremy Edberg of Reddit had a good comment later in that thread, to someone who paralleled the cloud to electricity generation:

http://www.reddit.com/r/blog/comments/g66f0/why_reddit_was_d...

What sucks is, my remarks really depend on what you define "cloud" as, which -- partially thanks to Microsoft television commercials -- is currently up in the air.

[api]

The cloud's real advantage is the ability to build out fast, but it is not cost. It is cheaper to build it yourself and run it yourself if you know exactly what you need, and have time to do so. If you don't, the cloud is cheaper.

So you're right that the cloud is great for startups. It is not so great for established stuff.

[jedsmith]

Oh, it's certainly about cost. When you talk about paying for your own transit, your own power, cage space, and remote hands, cloud providers can be significantly cheaper than owning the hardware. You also lose the administrative overhead of having to perform drive swaps when your units degrade -- it's just computing capacity that exists with a minimum of hassle to you. I think if you add up all of the variables, cloud can (and does) come out more cost-effective.

I think private clouds are fantastic for established stuff, and many companies use public clouds to their benefit as well.

I added this in an edit after you replied, but cloud is a term that is difficult to nail to the wall: my explanation to people that I like to run with is that the cloud is a way to think about your architecture.

Rather than have a DNS box, two Web servers, a DB box, and so on, then another server for every development environment, virtualizing the hardware makes a lot of sense. You get a lot more traction out of each U, and with a large number of of-the-shelf utilities, you can automate the hell out of that. Need a clean test environment to try an installation of your software? There are ways to accomplish that in minutes, and dispose of it and reuse the space. That to me is a cloud. Virtualization and automation on top of it. That's what Linode has been doing for nearly eight years now, so it's arguable that Linode pioneered the cloud space. In 2003, it was just called VPS hosting.

Integrating a public cloud and a private cloud makes a lot of sense, and a lot of established big-iron is taking this approach. Big players are realizing that the cloud makes a lot of sense, which we see with HP's announcement that they intend to enter the cloud market.

[woodrow]

As the parent post mentions, it's also about moving your costs from a mix of capital and operating to 100% operating. This is one of the arguments that has motivated Netflix' move to AWS (and it makes sense for other SaaS): their costs scale more or less directly with their customer base, and thus revenue, with no up-front capital required.

See http://qconsf.com/dl/qcon-sanfran-2010/slides/AdrianCockcrof... for more.

[romaniv]

You can do a lot of the things you describe here with VPS (Virtual Private Servers). You get root access, you don't manage hardware, you often receive some virtualization benefits (images, snapshots). Does that count as "Cloud Computing"?

[jedsmith]

Definitely. Another term for mostly the same thing, in my book. I talked about this here: http://news.ycombinator.com/item?id=2340734

VPS providers give you the tools, cloud providers give you the tools and a few finished products with less flexibility. You can use VPS as part of a cloud implementation, just like you can use dedicated servers as part of a cloud implementation, too.

[ck2]

If you start with the cloud, you best formulate an "exit plan".

Reddit for example doesn't seem to have one and seems quite stuck.

[jedsmith]

Reddit didn't start with the cloud, though. Very early, they were on dedicated and found it inflexible to their needs, and scaling a site with the eyeballs that Reddit has would have been very difficult with their first architecture.

The "exit plan" is, really, not marrying your entire architecture to one provider. Spreading the love gives you a bargaining chip and flexibility to see which provider will perform better for you in the long run, and allows you to see the strengths and weaknesses of each. Internet latency is pretty bad, though, so sharding an app across multiple providers can be a bit of a challenge.

[jedberg]

We're not that stuck. We can be out of Amazon in a month if necessary. We very specifically don't use any of their "lock-in" services to make easier on our open source users, which has the side effect of not locking us in either.

[powertower]

Cloud = Marketing(VPS);

[blasdel]

It's not quite that simple — there's another level of 'true cloud' platform services like GAE, Heroku, Force.com, etc. that really deliver on the promise.

PaaS = Productize(VPS);