Regulatory Reform

Cloud Computing Taking High-Tech Economy by Storm

What do Netflix, NASA and the Senegal Ministry of Finance have in common? They all operate in the cloud.

Cloud computing is increasingly relevant to businesses, consumers, and even government, yet ‘the cloud’ remains a cloudy concept for Americans, including policymakers. According to a recent survey conducted by Wakefield Research, a majority of Americans believe that stormy weather would interfere with their cloud computing—it won’t—and 95 percent of Americans who believe they do not use the cloud actually do every time they login to a social network, add an appointment to iCal, or access their online bank account.

Luckily, solving cloud confusion has less to do with mastering the technology behind the cloud and more to do with understanding how cloud computing is fostering innovation in the digital economy. Cloud computing is basically the practice of using remote computing storage and processing resources via the Internet (in this context, known as “the cloud”). In a setup formally known as enterprise cloud computing, businesses plug-in to the resources, services, even staff of a remote data center. This means that even the smallest businesses and organizations today have the ability to access powerful data processing and storage resources at lower costs than ever before.

These lower costs for computing power are enabling a great deal of innovation and economic growth. One popular example of cloud computing at work is Instagram, the photo-sharing app business that Facebook recently bought for $ 1 billion. With only 12 employees, Instagram shares more than five million pictures per day. Instagram’s success was made possible with the processing and storage power of the cloud, which offered a solution to purchasing costly in-house computer servers or hiring employees. Tasks that once took a couple thousand workers to accomplish now require only a handful. The cloud is even generating new economic opportunities for businesses in developing nations like India, where the cab company GetmeCab uses Amazon’s Web-based data servers in Singapore to provide nation-wide cab service.

Consumers get real value from the cloud because it makes life easier for little, if any, money. Services that use cloud computing, including Google Docs, Gmail, Dropbox, and iTunes, make it possible for anyone with an Internet connection to synchronize documents, applications, or songs from a computer to an iPad. Cloud computing is also responsible for predicting a consumer’s taste in clothing; Etsy, an online marketplace that joins buyers and sellers to exchange homemade goods, is now able to analyze billions of monthly website reviews in order to generate accurate product recommendations. Online health information networks like HealthHiway use cloud technology to ensure that information is properly shared between hospitals and doctors so that consumers have improved care at a lower cost. Many of these services cost consumers very little thanks to the savings passed on from the cloud.

Even government is turning to the cloud to innovate and save money. Last year, Wyoming successfully completed a migration from traditional IT systems to cloud-based services for the state’s 10,000 employees. According to Governor Matt Mead, all of the state’s employees will be on a shared email platform for the first time, which will increase efficiency and allow the state to serve constituents better.

According to a recent article in the New York Times, cloud computing is leading the way for the newest “wave” of technological changes. Today’s biggest companies, most notably Apple, Google, and Microsoft, as well as state and local governments, are turning to the cloud in hopes of increasing efficiency and decreasing costs. What cloud computing will next bring to the 21st century digital economy is not predictable, for even the professionals fueling technological innovation admit that the cloud revolution is happening a lot faster than they would have thought. Therefore, policymakers at all levels should give this vibrant sector of the digital economy ample room to flourish.

In Depth: Regulatory Reform

In his first inaugural address, Thomas Jefferson said that “the sum of good government” was one “which shall restrain men from injuring one another” and “shall leave them otherwise free to regulate their own pursuits of industry.” Sadly, governments – both federal and state – have ignored this axiom and…

+ Regulatory Reform In Depth