The cloud, that huge bank of online power that lives somewhere and everywhere, is fast becoming the lifeblood of the internet economy. Web services let small dot coms outsource what they''re not good at - plumbing - and focus on what they really do. The result is that startups no longer need to worry about server loads, file hosting or coping with traffic: they can just stick everything in the cloud and let somebody else handle the tough stuff.
It''s the stuff that keeps many of the best new websites running, and is increasingly encouraging new startups out into the open. As a vital part of the web economy, the cloud is now a utility. And once you''re part of the furniture you are almost impossible to replace.
That''s what Amazon understood when it took a long-term bet and rolled out its Web Services suite over the past few years, renting out computing power and storage from inside its own enormous and hugely efficient network. It''s also why, when Google recently announced its own App Engine (a similar kit of hosted services for web developers), the reasoning seemed obvious.
The benefits of taking this long-term approach are that Jeff Bezos can remain comfortable, even when faced with fighting the web''s most powerful company. "This is not going to be a winner-take-all space," he said, as reported by Wired. "It''s rare for significant industries to be built by a single company."
His words might sound like fence-sitting corporate-speak, but they also contain some truth. The software revolution was won by companies who created platforms, not programs. Forget for now that Microsoft showed that it''s possible to go on and take over the market once you''ve built up enough of a lead.
Actually, don''t. In all the hubbub about the cloud, it''s worth asking exactly where Microsoft is. Why isn''t the world''s biggest and most powerful software company taking the initiative here? For all of Microsoft''s chest beating about internet delivery as the next phase of its development, we''ve seen precious little in the way of action.
There are so many reasons that it''s hard to pin down. Perhaps it''s with Ray Ozzie, the successor to Bill Gates, who is still settling into his job. Or perhaps it''s just the stifling bureaucracy of a corporation that stretches as far as the eye can see.
Or perhaps, after a decade of ignoring the web, there just isn''t the capability to create the cloud at Microsoft. Remember: Amazon and Google are essentially offering web services that tap into the spare capacity on infrastructures they''ve already built. Without such a heavy online investment over the years, perhaps Microsoft simply can''t compete. It''s now paying the price of its inaction over the past decade. Instead, while its real competitors are off building platforms, Microsoft''s internet strategy seems terrifyingly simplistic: spend, spend, spend.
After all, it wasn''t long after Steve Ballmer announced that he''d be acquiring 20 companies a year for the next five years that he started his ugly courtship of Yahoo. Watching these two circle around each other is like sitting in a cinema, waiting for a tragedy to unfold. We know it''s coming and we can''t bear to watch - but still, we''re transfixed.
And it isn''t even a romantic tragedy. There is no tinge of Romeo and Juliet here, just shades of Sid Vicious and Nancy Spungen; a torrid relationship that was messed up from the start and always doomed to end up in a dirty, bloody horror show.
But perhaps, in the end, it doesn''t matter whether Microsoft makes it through or not. The cloud - for all the revolutionary talk - is just a continuation of the status quo. We''re still talking about a small group of super-rich corporations stealing each other''s lunch: Google jumps into Amazon''s world of web services; Amazon jumps into Apple''s of music downloads; Apple jumps into mobile phones; Microsoft eats up everything it can.
The future is already owned, and it''s owned by the names we know. After all, the cloud might be on the horizon, but the world underneath stays essentially the same.