Cloudonomics: The Business Value of Cloud Computing, + Website

Communications Patterns

Today we take for granted that we can use a wireline or mobile phone to call anywhere in the world or a tablet or smartphone to call up any Web site on the Internet, but it wasn’t always so. During the mid-1870s, inventors such as Alexander Graham Bell, Elisha Gray, and even Thomas Edison ushered in “acoustic telegraphy” (i.e., telephony). Initially, though, phone connections were point to point. If you wanted the ability to call, say, your office, the police, your brother, and the hospital, you needed four telephones. Each one was hardwired to the other location. If you went off-hook (i.e., picked up the handset) on the first telephone, the phone at your office would ring. Pick up the second one, and the phone at the police station would ring. And so forth.

On January 28, 1878, what may well be the first cloud service of the modern era—the telephone exchange—went live in New Haven, Connecticut.1 This predated the first electric cloud service, introduced in 1881.2Although this first exchange could only handle two simultaneous calls, it was the forerunner of operator services, analog and digital electronic switching systems, and today’s core routers that enable the mother of all cloud services: communications. Gaming, collaboration, social networking, and markets all have communications at their core. Even peer-to-peer applications often use a cloud server to maintain user metadata and rarely use point-to-point physical connections.

Exhibit 24.1 illustrates ...