You know there's substance behind a technology buzzword when companies such as the Nasdaq OMX stock exchange and the New York Times publishing company use it for real production efforts. Cloud computing is the latest buzzword that vendors are using to spruce up the usual sales spiel, and the fever pitch is enough to make you think, "Dot-com boom, here we go again." While the skepticism is warranted, something very real is happening, and IT needs to pay attention.

So what are Nasdaq and the Times doing? In a phrase, utility computing. Both have tapped into Amazon.com's Internet-provisioned computing and storage services -- Elastic Compute Cloud (EC2) and Simple Storage Service (S3) -- to augment their own IT resources.

The Times processed 4TB of data through EC2 and S3, using a credit card to get the service going in a matter of minutes so that it could convert scans of 15 million news stories into PDFs for online distribution. Nasdaq uses S3 to deliver historical stock and mutual fund information, rather than add the load to its own database and computing infrastructure. Likewise, Infosolve Technologies uses Sun's Network.com grid-in-the-cloud utility to scrub customer addresses rather than stand up that infrastructure internally.

In another realm of cloud computing, companies such as medical robotics firm Intuitive Surgical and recruitment services provider Jobscience use in-the-cloud development environments to create a provision their own applications. Both companies use Salesforce.com's Force.com platform as a service, the ungainly name for this online IDE service, but other firms such as Coghead offer their own platforms.

[ Just what is cloud computing? InfoWorld sorts it all out.]

These two forms of cloud computing -- utility computing and platform as a-service -- are exciting developments. Unlike SaaS (software as a service), they're aimed squarely at IT users, not at business users looking to bypass IT (or that IT is happy to let someone else take care of). But despite early promise, analysts say there's a long way to go before they're a mainstream part of your datacenter. So the question is: Do you sit back and wait for them to mature, or do you experiment so that you can get early advantage when they're enterprise-class?

Computing in the sky
Nasdaq OMX has lots of stock and fund data, and it wanted to make extra revenue selling historic data for those stocks and funds. But for this offering, called Market Replay, the company didn't want to worry about optimizing its databases and servers to handle the new load. So it turned to Amazon's S3 service to host the data, and created a lightweight reader app using Adobe's AIR technology that let users pull in the required data. "If I'm someone like Nasdaq, it's a cheap experiment," says Nik Simpson, a senior analyst at the Burton Group.

The traditional approach wouldn't have gotten off the ground economically, recalls Claude Courbois, an associate vice president for data products at Nasdaq: "The expenses of keeping all that data online was too high." So Nasdaq took its market data and created flat files for every entity, each holding enough data for a 10-minute replay of the stock's or fund's price changes, on a second-by-second basis. (It adds 100,000 files per day to the several million it started with, Courbois says.) The Adobe AIR app Courbois' team put together in just a couple days pulls in the flat files stored at Amazon.com and then creates the replay animations from them. The result: "We don't need a database constantly staging data on the server side. And the price is right."

The New York Times also used S3 for a data-intensive project: converting 11 million articles published from the newspaper's founding in 1851 through 1989, to make them available through its Web site search engine. The Times scanned in the stories, cut up into columns to fit in the scanners (as TIFF files), then uploaded those to S3 — taking 4TB of space — over several WAN head connections from the Times' datacenter.