Seattle at the Hub of the Cloud

Cloud computing is often in the news these days. But what is it? In the simplest terms, the cloud is a new way to get access to technology over the internet. Instead of buying a piece of software and installing it on a server within your network, you “rent” the software from a cloud provider.

Just as shopping online has become mainstream, cloud computing is well on its way to becoming an accepted way to use technology. And just as Seattle led the e-commerce boom, it is now at the forefront of the cloud computing movement. There are many reasons for this, including our existing technology vendor base, a rich history of innovation, a strong startup culture and a deep talent pool.

Not only are large Seattle companies like Amazon.com and Microsoft making headlines with their respective cloud services, Amazon Web Services and Azure, but many smaller companies here are also leading the pack in cloud-based software and services. In addition, other world-class cloud players like Google are setting up local operations to take advantage of our talent and business environment.

Seattle has much to gain from its top position. At a time when the rest of the economy is slumping, the market for cloud software and services is growing at a rate of 21 percent per year, projected to reach $150 billion by 2013.

There’s also something democratic and leveling about the cloud, which fits with Seattle’s personality. This technology allows small players to access massive computing capacity while paying only for the services they need. With lower upfront costs, smaller entities utilizing the cloud can be more nimble, accelerate time-to-market and create new opportunities by combining different technologies based on different standards.

One way to look at Seattle’s innovators in the cloud market is to compare where they play in the traditional IT stack.

At the physical layer, we have a slew of companies offering cloud-based servers, storage and other infrastructure as needed. Amazon Web Services is the largest player in this space. But there’s also startups Mozy and Newline Software, which provide cloud-based online backup and recovery services, and Skytap, which offers a complete virtual lab solution over the cloud. 

At the next layer up is Microsoft Windows Azure, which operates as a development platform in the cloud. If you’re familiar with Microsoft’s .Net development platform, you can think of Azure sort of as .Net in the cloud, enabling developers to build custom web-based applications on this standard platform.

At the application layer, Seattle also has a wide variety of companies that build cloud-based applications for specific vertical markets, such as Concur, with its employee travel and expense reporting software, and Daptiv for project management. My company, Hubspan, provides a cloud-based integration platform that helps businesses integrate and extend applications, systems and business processes.

Many local startups are choosing to build cloud-based solutions to address the ever-increasing need of enterprises to reduce operational costs while increasing efficiency and revenue. Difficult economic times mean doing more with less, and making use of every resource available for as long as possible. The beauty of cloud computing is in companies’ ability to start small, move one application or business process into the cloud, then expand as the benefits are shown, all the while paying only for what they use.

Given Seattle’s expertise in cloud technologies, it makes sense that we should encourage cooperation and further innovation between local market leaders. While our cloud vendors address the various layers of the technology stack, there is great benefit in leveraging core competencies to increase the overall competitive stance of Seattle in the cloud. Besides, with nearly 300 days of cloudy weather each year, who knows clouds better than Seattleites? 

Trisha Gross is president and CEO of Hubspan Inc., a Seattle-based provider of business integration software and services.

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