We decided to investigate the origins of cloud computing since it seems like every American technology company is selling it.Antonio Regalado
One of the most popular buzzwords in technology is cloud computing. It appears 48 million times on the Internet.
It is a common question that cloud computing has been discussed a lot: Who was the first to answer it?
Proof of concept: George Favaloro poses with a 1996 Compaq business plan. The document is the earliest known use of the term “cloud computing” in print (click here to view).
According to some accounts, the term “cloud computing” was first used in 2006 by large companies like Amazon and Google to describe a new paradigm where people can access software, computer power and files via the Internet instead of their desktops.
Technology Review has tracked the origins of the term a decade before, in late 1996 and at an office park near Houston. The Web browser from Netscape was the technology to look forward to at the time. At that point, the Yankees were playing Atlanta on the World Series. A small group of technology executives sat in the Compaq Computer offices, plotting the future for the Internet business. They called it “cloud computing”.
Their vision was precise and prescient. They predicted that all business software would move to the Web. Also, what they called “cloud computing-enabled apps” such as consumer file storage would be common. Cloud computing would produce dramatically different results for two young men, a Compaq marketing executive called George Favaloro, and Sean O’Sullivan, a young technologist. It was Compaq’s start of a $2 billion-a-year business selling Internet service providers servers. It was O’Sullivan’s first step towards disenchantment, and eventually insolvency.
See the rest of our Business Impact report on Business in the Cloud.
The Oxford English Dictionary doesn’t include cloud computing. But its use is spreading rapidly because it captures a historic shift in the IT industry as more computer memory, processing power, and apps are hosted in remote data centers, or the “cloud.” With billions of dollars of IT spending in play, the term itself has become a disputed prize. After trying to trademark “cloud computing,” Dell was criticized by programmers.
Cloud computing is becoming a jargon-laden term that tech executives not only find irritating but difficult to understand. Carl Bass, President and CEO of Autodesk says, “I hated the term, but I finally gave up.” In September, Autodesk launched a cloud computing marketing campaign. “I didn’t believe the term helped people understand what it was.”
The term has been a problem for the U.S. government as well. Vivek Kundra, the former IT czar of the country, encouraged agencies to use cheaper cloud services. Procurement officials were then faced with the difficult question of cloud computing. The government requested a definition from the National Institutes of Standards and Technology. Its final draft, released this month, begins by cautioning that “cloud computing can and does mean different things to different people.”
“The cloud is a metaphor of the Internet. Reuven Cohen, cofounder and CEO of Cloud Camp, a course designed for programmers, says it’s a rebranding. There is much debate about this topic. It’s a metaphor by nature, so it can be interpreted in many different ways.” He also said that “it’s well worth the money.”
The debate centers on who should be credited with inventing the idea. Although network-based computing is a concept that dates back to the 1960s and many people believe it was first used in modern times by Eric Schmidt, then CEO of Google, on August 9, 2006. _S.35_ It all starts with the assumption that data services and architecture should be hosted on servers. It is what we call cloud computing. They should be located in a “cloud”.
The term began to see wider use the following year, after companies including Amazon, Microsoft, and IBM started to tout cloud-computing efforts as well. It was also at that time it appeared in newspaper articles such as the New York Times report dated November 15, 2007 with the headline “I.B.M. To Push “Cloud Computing” Using Data from Afar” It described vague plans for “Internet based supercomputing.”
Equinix’s director of cloud and IT services, Sam Johnston, believes cloud computing was a way to communicate something that is important. He wrote in an email that “we now had a common handle on a number of trends we had been watching, such as the consumerization or commoditization IT.”
Johnston claims that it is not clear who invented the term. Johnston is an editor for the Wikipedia entry on cloud computing and keeps an eye out for misappropriation attempts. Johnston was the first to alert him about Dell’s trademark application. This summer, he removed a Wikipedia citation that claimed Emory professor had invented the phrase in late 1990s. Johnston says that there have been many attempts to coopt the term as well as numerous claims of invention.
This may explain why cloud watchers don’t seem to have learned about an unusually early use–a May 1997 usage.Application for trademarkFor “cloud computing”, a trademark application was filed by NetCentric, a now-defunct company. The trademark application was filed for “educational services”, such as classes and seminars, but was not approved. However, the usage of the phrase is not accidental. It was used whenTechnology ReviewNetCentric founder was located?O’Sullivan agreed to dig up copies of paper plans that were 15 years old from Compaq and NetCentric. These documents were written in late 1996 and include extensive use of the term “cloud computing” as well as describing in detail many of the new ideas that are sweeping the Internet.
Cloud1.0: Entrepreneur Sean O’Sullivan registered a trademark for “cloud computing” back in 1997. He was photographed at NetCentric’s offices in Cambridge, Massachusetts, in the late 1990s.
O’Sullivan’s startup was in negotiations for a $5 million investment by Compaq. Favaloro had just been appointed to head a new Internet service group. Favaloro recalls that the group was an internal “insurgency” that sought to get Compaq into selling servers to Internet service providers (ISPs) like AOL. NetCentric, a young company that developed software to help with that goal, was founded in 1998.
The duo had predicted that technology trends would take over a decade to develop in their plans. NetCentric’s business plans are copied in copies. It contains an imaginary bill for “the total electronic purchases” of George Favaloro. This includes $18.50 for 37 minutes video conferencing, $4.95 for 253 megabytes Internet storage and $3.95 to watch a Mike Tyson fight. According to consulting CDW, file storage and video are the most popular cloud-based applications today. These services weren’t available back then. According to the plan, NetCentric’s software platform allowed ISPs to bill for “cloud computing-enabled” applications.
It is not clear which man–Favaloro, O’Sullivan or O’Sullivan—-invented the term cloud computing. Both men don’t recall exactly when the phrase was created. Hard drives that could hold e-mails or other electronic clues from precloud days are long gone.
Favaloro believes that he invented the term. From a storage unit, he dug out a paper copy of a 50-page internal Compaq analysis titled “Internet Solutions Division Strategy for Cloud Computing” dated November 14, 1996. This document correctly predicted that enterprise software would be replaced by Web-enabled services and that, in the future “application software will no longer be a feature of hardware–but rather of the Internet.”
O’Sullivan believes it could have been his invention. After all, why would he want to trademark it later? He was also present at Compaq’s Texas headquarters during that time. O’Sullivan found a October 29, 1996 daily planner in which he had written down the phrase “Cloud Computing. The Cloud has no Borders”. This was after a meeting with Favaloro. Technology Review was able to find the first documented references to “cloud computing” in the Compaq business plan and that handwritten note.
O’Sullivan says, “There were only two people who could’ve come up with this term: me at NetCentric or George Favaloro at Compaq… or both of them together, brainstorming.”
Both agree that the term “cloud computing” originated as a marketing term. Telecom networks were called the cloud at the time. In engineering drawings, a network was represented by a cloud. They were looking for a slogan that would link the rapidly-developing Internet opportunity with businesses Compaq knew about. Favaloro says, “Computing was the foundation of Compaq. But now it was a messy cloud.” “And we needed to have a way to connect those things.”
However, their new marketing term didn’t catch on. It is possible that others independently invented the term later. Take a look at the January 1997 Compaq press release announcing NetCentric’s investment. It stated that the deal was part of a strategic initiative to offer “Cloud Computing” to businesses. However, Compaq’s internal PR department objected to the phrase and changed it to “Internet Computing” in the final release.
Compaq dropped the term altogether, along with plans to develop Internet software. Favaloro didn’t care about that. Favaloro had managed to direct Compaq (which was later merged into HP) to what would become a massive business selling servers to early Internet service providers and Web-page hosts like UUNet. Favaloro says, “It’s absurd now, but we realized that there would be an explosion in people using servers on their premises.” “I went from being a heretic within Compaq to being treated as a prophet.”
NetCentric was disappointed with the cloud computing concept. O’Sullivan stopped using the term because he was having trouble marketing an Internet fax service, which was the only app that the “cloud” network could support. The company eventually went bankrupt and closed its doors. “We got drawn down a rathole, and we didn’t end up launching a raft of cloud computing apps … that’s something that sticks with me,” says O’Sullivan, who later took a sabbatical from the tech world to attend film school and start a nonprofit to help with the reconstruction of Iraq.
Favaloro is now the head of an environmental consulting company in Waltham, Massachussetts. He says that O’Sullivan and Favaloro imagined a cloud 15 years ago. It is amazing. “I run a fifteen-person company now and our systems are better than any big company in terms of productivity. New apps are created and launched in just a few hours. We keep the apps if we like them. If not, we discard them. Favaloro says that everything is self-managed, it works well, it’s secure, it’s uptime is high, it’s all back up and our costs are low. “The vision was realized.”