Systems today have evolved from huge bulky awkward looking structures to the sleek and sexy Apple Mac Book Air which is just few centimeters thick at maximum. Blue Ray Disks offer storage spaces from about 1 GB to thousand GB on a disc. And still you were cribbing abour your storage space, then relax! Now you don’t have to worry about the storage capacity of your computer, courtesy Cloud computing. What! Cloud computing? Why it will have a major impact on the storage peripherals of today? Will it affect the software industry as well? Plenty of questions must be hovering around your head just for cloud computing.The condition is akin to the situation when you enter into a restaurant and look at the menu card containing the list of dishes with fancy names. You start wondering what it is, will it satisfy your hunger, how will it taste, so on and so forth.
Companies like Amazon, Microsoft, Google, IBM and HP have already started work in this regard. Amazon with its Amazon Elastic Compute Cloud, popularly called Amazon EC2 and Simple Storage Service or abbreviated as S3, has paved the way for others like Google and Microsoft to improve upon the existing structures and allay the fears and apprehensions vis-à-vis Cloud Computing.
Cloud Computing
The term really took me by surprise when I heard it for the first time and I really had no hint. But it was quite simple. According to Gartner cloud computing is “a style of computing where massively scalable IT-related capabilities are provided ‘as a service’ across the Internet to multiple external customers.” The idea of cloud computing was conceived by Oracle's Larry Ellison. He started the New Internet Computer (NIC) Company in 2000 to lead the industry forward to that goal. By using internet the PC of a user can be linked to a Super Computer which would host all the programs and files. However the concept was ahead of time and the company folded in 2003. [Source: PC World].
Cloud computing is simply using and storing data from and on a remote server with the help of a software interface. If it’s still difficult to understand, let’s take the example of emails. All our mails are stored on a remote server which can be accessed using a software interface like web browser (Firefox Mozilla, IE, Safari etc). However, emails can not be said to be something like cloud computing. *
Cloud computing thus provides the alternative for organizations which have limited work space and not adequate financial resources to upgrade their system and software without much shelling out much money. In case of cloud computing remote machines will run everything from emails to word processing to complex data analysis. These machines will then be owned by companies which will levy charges on the basis of time consumed and resources utilized.
Networking and Structure
Cloud Computing is so called because there is a cloud of web servers on which the data and application are stored. It resembles GRID as well as UTILITY computing network. Grid computing system involves accessing the resources available on each system of the network by every computer connected to the common network.
Utility computing system is basically a business model where the user company has the access to data and computer power processing of the provider company. It is very advantageous for companies who can not spend money on establishing servers for each specific purpose. It can be simply said that Utility Computing is somewhat like outsourcing storage and data resources. However, the client has to pay according to the resources used which can be in the form of hardware, software applications, processing power, off-site data storage etc.
Cloud computing consists of an array of servers. The user is connected to the cloud computing through internet and can access all his data and applications after authentication is done.
Why Cloud Computing
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SaaS
This type of cloud computing delivers a single application through the browser to thousands of customers using a multi-tenant architecture. On the customer side, it means no upfront investment in servers or software licensing; on the provider side, with just one app to maintain, costs are low compared to conventional hosting.
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Utility Computing
The idea is not new, but this form of cloud computing is getting new life from Amazon.com, Sun, IBM, and others who now offer storage and virtual servers that IT can access on demand.
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Web services
These offer developers to develop APIs by exploiting the functionality over the internet, rather than full blown applications.
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Platform as a Service
This is another SaaS variation which delivers development environments as a service. Users can build their own applications that run on provider’s infrastructure and are delivered to other users via internet from the provider’s server.
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Managed Service Providers
One of the oldest forms of cloud computing, a managed service is basically an application exposed to IT rather than to end-users, such as a virus scanning service for e-mail or an application monitoring service.Other offerings include desktop management services.
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Service Commerce Platforms
A hybrid of SaaS and MSP, this cloud computing service offers a service hub that users interact with. They're most common in trading environments, such as expense management systems that allow users to order travel or secretarial services from a common platform that then coordinates the service delivery and pricing within the specifications set by the user.
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Internet integration
The integration of cloud-based services is in its early days and it involves integration of different cloud based services.
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Pay for what you use
The biggest advantage of Cloud Computing Services is that you pay for what you use.You don't have to pay for anythign and everything.The charges are proportionate to the resources utilized and time elapsed.
What is Amazon EC2
Don't you think it's so strange that the Amazon is the name of a river and here we are talking about clouds? I am not digressing anywhere from the topic as Amazon happens to be the first one to offer cloud computing services under the aegis of AWS 
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Amazon Web Services are offering two types of services- one is for storage purpose while the other is for computing purpose. The former is described as Amazon S3 (Amazon Simple Storage Service), while the later is called Amazon Elastic Compute Cloud. As the name suggests, it offers flexible computing services with regards to Cloud Computing. It is designed to make web scale computing (also called internet scaling by many) easier and is sold by Amazon Web Services, LLC.
According to Amazon’,” Amazon Elastic Compute Cloud (Amazon EC2) is a web service that provides resizable compute capacity in the cloud. It is designed to make web-scale computing easier for developers.” It is offering users to set up a server instance and then access and use the servers they setup like any other. These servers will be located in different parts of the globe and charges will be accordingly for data usage and transfer.
Amazon Simple Storage Service (Amazon S3)
Amazon S3 is storage for the Internet. It is designed to make web-scale computing easier for developers.Amazon S3 provides a simple web services interface that can be used to store and retrieve any amount of data, at any time, from anywhere on the web.
Charges For Amazon EC2
The charges have been divided into three categories depending on the bandwidth, storage capacity and data transferred. There is no minimum charge and the user is charged on the basis of resource utilized on hourly basis. The charges range from $ 0.1 for a Small Instance which includes 1.7 GB memory, 1 EC2 Compute Unit and 160 GB of instance storage on a 32-bit platform, to $ 0.80 for Extra Large Instance involving 15 GB Memory, 4 EC2 Compute Units and 850 GB instance storage on 64-bit platform.
If the processing speed required is more it will come under the bracket of High CPU instances which are categorized into two- High CPU Medium Instance @ 0.20/Hour and High CPU Extra Large Instance @ $v0.80/Hour having 1.7 GB of memory, 5 EC2 Compute Units (2 virtual cores with 2.5 EC2 Compute Units each), 350 GB of instance storage, 32-bit platform, and 7 GB of memory, 20 EC2 Compute Units (8 virtual cores with 2.5 EC2 Compute Units each), 1690 GB of instance storage, 64-bit platform, respectively. One EC2 Compute Unit is equivalent to CPU capacity of 1.0 – 1.20 GHz 2007 Opetron or Xeon processor.
On the basis of Internet Data Transfer the amount is differentiated on the basis of size, Public and Elastic IP as well as whether it is being sent into or out of EC2. There are no charges for data transfer between EC2 and S3-US or Amazon SimpleDB. For all the incoming data the rate is $ 0.1 per GB and for the data transferred out of EC2 it varies from $ 0.170 per GB (for the first 10 TB/month) to $0.130/GB (for the next 40TB/month) to $ 0.110/GB (for the next 100 TB/Month) and to $ 0.100 per GB for data transfer over 150 TB/Month.
Apart from these, charges can be based on the usage of Public IP address and the Elastic IP Address used.
Why it is special
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Elasticity
The greatest strength of Cloud Computing has been elasticity. Since it uses web APIs it’s easier for it to expand or deflate its capacity within a short span of time. One can use hundreds or thousands of instances at one go.
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Scalability
A scalable site, system, or business is able to manage resources in such a way that it meets the service, product, or consumer demands as they grow.
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Control
The user has the full control over the instances which can be rebooted from any location using web service APIs.
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Flexible 
The option of different types of instances based on memory size, processing speed offers the much required flexibility to the user to improve upon his productivity.
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Functional with other Amazon Web Services Products
Amazon EC2 works in conjunction with Amazon Simple Storage Service (Amazon S3), Amazon SimpleDB and Amazon Simple Queue Service (Amazon SQS) to provide a complete solution for computing, query processing and storage across a wide range of applications.
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Multiple Locations
Servers will be scattered all over the globe in terms of Availability Zones. These regions will be dispersed in different geographic locations in different countries. Regions may consist of one or more Availability Zones. Availability Zones are distinct locations that are engineered to be insulated from failures and provide inexpensive, low- latency network connectivity to other Availability Zones in the same region. By launching instances in more than one availability zone, one can protect their applications from failure of a single location.
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Elastic IP Addresses
Elastic IP addresses are static IP addresses designed for dynamic cloud computing. It is associated with the instance of a user account till the time he/she wants to release it.
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Security
The Amazon EC2 provides interfaces to configure firewall settings that control network access to and between groups of instances.
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Reliablity
Amazon EC2 offers a highly reliable environment where replacement instances can be rapidly and reliably commissioned. The service runs within Amazon's proven network infrastructure and datacenters. Amazon’s S3 storage service is growing up and adopting a Service Level Agreement (SLA). If S3 fails (via a service unavailable or internal error message) and delivers uptime of less than 99 percent the customer can apply for a service credit of 25 percent. If uptime is between 99 percent and 99.9 percent you can apply for a credit of 10 percent of S3 charges.
Working
The working involves two parts:
The user has to open and account with Amazon Web Services first and then the image is uploaded on Amazon S3. The next step involves the registering the image with Amazon EC2 as server instance. At present 20 instances can be run simultaneously on EC2.
Nick Cubrilovick says in a article, “While each server instance provides decent computing power applications such as large-to-medium scale databases or large web applications will require work to bring the computing power together to serve requests. Since each instance has a fixed amount of capacity they will be prone to performance issues when under heavy load as achieving scalability requires the user to acquire more server instances. One issue is that having separate server instances is not true “elastic” computing, like what Sun or other vendors provide, since the user is responsible for clustering and or load-balancing solutions between the servers.”
Applications and Advantages
Presently it has designed to work with systems having Linux. Already a good number of
companies are utilizing the Amazon EC2. As of April, about 240,000 developers have registered to use S3 to store 5 billion data objects, up from 800 million in July 2006. End users reported major hardware and operation cost savings. However this type of infrastructure services may well be the defining factor between success and failure when you are faced to scale massively storage, bandwidth and CPUs in a matter of days.
Companies that rely heavily on computers but do not have enough financial backing to upgrade or purchase licenses for every user in the company are stand to gain as Cloud Computing systems give these organizations company-wide access to computer applications. The companies don't have to buy a set of software or software licenses for every employee. Instead, the company could pay a metered fee to a cloud computing company like Amazon EC2.
Servers and storage devices can not be bought and installed overnight. Due to scarcity of
physical space many companies have to rent servers and storage devices. Cloud computing gives these companies the option of storing data on someone else's hardware, removing the need for physical space on the front end and saving costs on repair and maintenance on the back end.
Issues
Large organizations are still hesitant about being an active part of the cloud computing world. Small business organizations and start-ups have signed up for the Amazon Web Services in good numbers. According to research report by Forrester analyst James Staten which is based on interviews with more than 30 companies, Cloud Computing is “wildly popular” among small businesses but the large companies have been circumspect.
The most important issue associated with cloud computing today is security and privacy. Most large organizations feel unsafe about storing their data on remote servers owned by a different company.
On the question of privacy, the facility of logging into the system from any remote location to access the data and applications is taking a back seat according to many. The argument is that the privacy of the company can be compromised in such a case by hackers.
Other issues that are giving headaches to corporate executives are questions like who will own the data when one subscribes to the cloud computing service. What happens when the internet is not working or the server is down? What about the disaster recovery?
Opportunities
Virtualization will remake the landscape IT, as will cloud computing, virtual worlds, and high new levels of scaling when it comes to compute power Opportunities lie in the field of API and software development. Amazon has been developing a market place for AMIs.
The applications of cloud computing are practically limitless. With the right middleware, a cloud computing system could execute all the programs a normal computer could run. Potentially, everything from generic word processing software to customized computer programs designed for a specific company could work on a cloud computing system.
Its being speculated that organizations taking longer to move on to the cloud will stand to lose. The biggest advantage that EC2 is offering is of speed. Computations involving trillion calculations are quickly being performed.
Still it would be too early and preposterous to comment anything about security and other issues. Amazon is right now having the competitive advantage over many other players like Big G or Google, Microsoft, IBM as it’s the first one to come up with cloud computing services. Once the competition gets broadened the quality of service and relevant security issues will definitely be answered. But don't throw your storages devices in a hurry.Act wisely!You never know whats there is storage for you in the future.Oops! Store. Hope after reading this you will be on cloud nine. I meant Amazon Cloud Computing Services till the rest come up with theirs.