More functions headed to 'the cloud'

If the digital soothsayers are right, that personal computer in your office cubicle someday may function as nothing however a dumb screen. The real electronic brain - the computing power, the files and the software - will be far away in a bank of computer servers owned by another company in "the cloud."

Now business is getting into the act - creating opportunities for intrepid companies. Savvis, based in Town and Country, Mo., has been selling tickets to its digital cloud to companies worldwide. Its $40 million cloud business has been doubling every year.

"We'll probably be disappointed if we can keep only to 100 percent," said Savvis President Bill Fathers. "If we can't make this a billion-dollar business in three or four years, at the time we've not been successful."

MarketsandMarkets, a market technology company, sees the global cloud growing from $37.8 billion in revenue last year to $121.1 billion in 2015. Other forecasts are similar.

Though West Coast tech giants like Google Inc., Amazon.com Inc., Microsoft Corp. and Apple Inc. currently dominate cloud computing, Fathers believes parts of the Midwest can as well play an important role. "St. Louis has been a good incubation point," the Savvis president said. "Among cities in America, St. Louis is probably a cloud capital."

The cloud business

Entry into the cloud business was one motivation behind CenturyLink's planned $2.5 billion purchase of Savvis, announced two months ago. CenturyLink, which completed its acquisition of Qwest before this year, is now the nation's third-largest telecommunications company.

The definition of the cloud remains a subject of debate. The most popular definition sounds like old-fashioned corporate outsourcing: Computer functions once done in IT departments are farmed out to a data center elsewhere. Clients use the Internet or cell connections to access their clouds.

The concept takes hold

As the concept takes hold, consumers and business will access the cloud from smart phones, tablets or laptops from wherever they happen to be. Movies, photos, music, bank accounts, work documents and computer applications can be a finger tap away.

"You'll pretty much have everything up in the cloud" said Joe Seibel, chief financial officer at Hexagrid, a Chesterfield, Mo., software company specializing in cloud computing. "If you have a phone, you'll go over to your friend's house and watch one of your movies."

Last month, Apple CEO Steve Jobs announced iCloud for consumers. They'll be able to store their iTunes music, along with documents, pictures and video on Apple's servers. The files will be automatically downloaded to iPhones, iPad tablets and home computers.

"We're going to demote the PC and the Mac to just be a device - just like an iPad, an iPhone or an iPod Touch," said Jobs. "We're going to move the hub of your digital life to the cloud."

If consumers were first adopters in cloud computing, businesses are hot on their heels. The reason: The move can cut computing costs between 30 percent and 70 percent, said Fathers, of Savvis.

"As a concept, it's been around for more than 20 years. It's only in the last 12 to 18 months that the innovation advanced so as to realize the promise," said Fathers. "The underlying innovation has gotten cheaper - things like processors, servers, bandwidth."

The cloud as well cuts companies' hardware investments

The cloud as well cuts companies' hardware investments, notes Sanjay Madria, professor of computer science at the Missouri University of Science and Innovation. Companies use the cloud companies' equipment, and taking everything into consideration pay only for the capacity they use.

Spreading costs over many clients should help bring prices down, as should the steady advance of research. A gene analysis that costs $10,000 now may cost $200 or $300 in five years, said Sultan Meghji, a vice president at Appistry.