Will A Slowing Economy Boost Cloud Computing?

This week's belt-tightening among venture-backed startups is likely to kick off an important phase in the evolution of utility computing and cloud hosting. It's too early to know all the answers, but here are some of the key questions:

  • Will startups' enthusiasm for next-generation hosting services create challenges for cloud computing and utility hosting providers, as their startup customers fail or are acquired?
  • Or will the financial crisis be the event that pushes more companies to ditch their dedicated hosting and colocation services and move to the cloud?
  • Will we return to an era in which the financial stability of hosting providers becomes a key part of the customer decision-making process?

For discussion of various elements of these questions, see posts from InfoWorldTarry SinghFred WilsonAppirio and Hyperic.

Here's one prediction that seems pretty safe: Amazon's infrastructure-on-demand business is positioned to reap some of the biggest gains if a slowing  economy drives increased adoption of cloud computing. It's the name brand in utility computing, financially secure, successfuly navigated the dot-com crash, has been fine-tuning its services for business customers, and may benefit from concerns about vendor lock-in with cloud offerings from Microsoft and Google.     

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