Cloud Computing is Just Time Sharing Warmed Over

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Cloud Computing is what graybeards used to call Time Sharing. When computers filled rooms and cost millions of dollars, many companies had a dumb terminal like a Teletype, IBM 3270 or ADM-2, or a combination card reader/printer in their office which was connected by a point-to-point leased telephone line to a central computer somewhere. Customers were billed for time and storage just as they are billed for computing in the cloud.

Compute jobs would be sent to the central computer and the results would come back a few minutes to several hours later. Hundreds of universities had rooms full of terminals that connected somewhere else. In the San Francisco Bay Area many schools connected to the LHS Decision time sharing system at the Lawrence Hall of Science to play Trek73, one of the earliest computer games.

Here are some of the main differences between Time Sharing and Cloud Computing:

  • Time Sharing used a direct data connection from premise to premise
  • Only one customer used the computer at a time or it was partitioned physically or logically (virtualized) to keep the users completely separated
  • There was no possibility of public access to the system of any kind (i.e. not on a network)

With CPU cycles and software so cheap, does it make sense to move your business to the cloud? It might if you are a small or medium business (SMB) and either can’t or don’t want to pay for an IT staff. However, if you are a large corporation, you may not save much because the cost of  your IT staff and infrastructure is spread over a lot of employees. In fact, a report issued earlier this month by international business consulting firm McKinsey & Company threw some cold water on the cloud computing hype, pointing to the technology’s limits in terms of cost scalability. McKinsey focused its cautionary advice on big companies, warning that “current cloud computing services are generally not cost effective for larger enterprises.”

There are also security and availability worries when your data no longer is under your own control. “There are legitimate questions enterprises should ask about the security, scalability, availability and reliability of a cloud computing solution,” says John Sloan, an analyst with Info-Tech Research Group in London, Ontario.

Hackers have yet to siphon data out of a cloud (that we know of…), but the services themselves have experienced some serious outages – which could put you out of business if you don’t have a contingency plan in place. For example,  last July 20, Amazon S3 went down for seven hours – the service’s second outage in 2008. What would happen to your business if access to email, accounting, and other information just stopped? I’m not saying this is an insurmountable problem, just that you need to be aware of the trade-offs between cost, availability, and security. If you want to take advantage of cloud computing to save money, that’s your decision. Just be sure that you carefully research your vendor, perform a risk analysis and business impact analysis then add up the numbers before you make the move. Remember that 99% uptime means 87 hours of downtime a year.


Seacliff Partners International, LLC

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