Cloud computing services are projected to hit $42 Billion by 2012. It is certainly the hottest buzz word since SAAS.  Some even consider SAAS to be Cloud Computing.

It seems there is a land grab for the cloud computing market.

According to Information Week, in three separate announcements, software vendors SAS Institute, NetSuite, and Salesforce (NYSE: CRM).com show they have deepened their commitments to cloud computing.

SAS Institute announced Thursday plans to build a $70 million, 38,000-square-foot cloud computing facility to support expansion of its OnDemand software-as-a-service offerings.

The OnDemand model is what is so attractive for many cloud computing consumers.  In a colocation environment there will be committed and unused bandwidth, power, space and server capacity.  In the cloud model, the customer only pays for what they use.  Currently the household names in the cloud space are Terremark, 3Tera and Amazon, and a few others.

It seems SAS Institute will really attempt to challenge Terremark, 3Tera and Amazon in the cloud space.  To build out a 38,000 foot server farm inside a data center is no small task.  It also leads to believe they are either going to have a very strong sales and marketing campaign or they already have some of it pre-sold.

Before the cloud concept there was no possible way anyone would attempt to build this data center unless either near a major internet hub or they may have taken over a distressed asset.

Cloud computing has really flattened out the server market where companies in the tier 2 markets or buildings can compete along side the major metropolitan areas and or carrier neutral data centers.

The companies that do well in the cloud market will have the infrastructure and revenue stream in place.  Amazon made the most of their infrastructure when they formed the EC2.  Salesforce is another great example of a company building to the need when they complimented their hosted CRM software with a true cloud computing offering.

As the economy forces companies to become more creative cloud computing will grow.  The Apache Website posted in October 2008 stating, over the next five years, IDC expects spending on IT cloud services to grow almost threefold, reaching $42 billion by 2012 and accounting for 9% of revenues in five key market segments. More important, spending on cloud computing will accelerate throughout the forecast period, capturing 25% of IT spending growth in 2012 and nearly a third of growth the following year.

As companies look to add revenues they will also look to become more efficient.  From the service provider side, they will try to look at where they have already sunk costs and maximize them.  From the customer side they will try to pay as little as possible only for what they need.

Either way it means the virtual land grab for tech customers is predicted to keep growing by leaps and bounds, so get it while it's hot.

So… what does 5 nines of reliability mean, anyway?  It means your unplanned downtime would only be up to 5.26 minutes per year (yes, YEAR). Here’s a quick look at what your SLA really indicates for your business.

These were the amazing words I heard today from Larry Halff, founder of Ma.golia.com. I was submitting a blog article today and decided to check out the little link sharing icons our website puts below each article to submit it to link sharing sites. I tried to go to ma.gnolia.com, one of my favorites. To my surprise, it was gone, though their cute flower logo was still visible. Instead there was a web site with a painful story of file loss and implosion of their site, with a very interesting video from the founder of ma.gnolia.com listing his mistakes and learnings.

Citizen Garden Episode 11: Whither Ma.gnolia? from Larry Halff on Vimeo.

In short, their MySQL database got its files corrupted. Their half-terabyte database was backed up, but the corruption was backed up as well. Eventually, the data became unreadable, and ma.gnolia.com came to and end.

The founder, Larry Halff, showed tremendous and admirable humility in listing his mistakes, but he also told a cautionary tale that we here at ENKI both lived ourselves at startups as well as observed with some of our customers prior to their joining us:

1. MySQL is a dangerously inadequate database for production work. Sure, YouTube uses it, and so do hundreds of thousands of LAMP sites. But it's very susceptible to corruption, and its administration facilities are inadequate to prevent it. In the hands of inexperienced or amateur DBAs, it is ripe for disaster, yet it is presented as an easy entry-level database. We've had customers suffer long downtimes due to corruption from crashes in MySQL. We also have customers with nearly insoluble performance problems. And, even though our cloud computing environment restarts software on failed servers automatically, MySQL does not always successfully survive a restart, or if it does, it requires extensive database table repair (especially with myISAM tables). If uptime is important, we feel you should look elsewhere, though it can be made to work with sufficient expertise.

2. Startups shouldn't do their own IT. I bring this up often because of my own experiences as a software person trying to do my own IT, or watching the stream of missteps in the early years of startups I've worked at including NetSuite. In the video, Larry says, " The real lesson Learned is if you’re a startup, don’t do your own IT at all.” I'm hoping it's a lot more convincing when it doesn't come from my mouth, now that I've started a company to address this need.