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My Profile Top News Reuters top ten news stories delivered to your inbox each day. Subscribe You are here: Home > News > Technology > Article Home Business & Finance News U.S. Politics International Technology Internet Entertainment Sports Lifestyle Oddly Enough Environment Health Science Special Coverage Video Pictures Your View The Great Debate Blogs Weather Reader Feedback Do More With Reuters RSS Widgets Mobile Podcasts Newsletters Your View Make Reuters My Homepage Partner Services CareerBuilder Affiliate Network Professional Products Support (Customer Zone) Reuters Media Financial Products About Thomson Reuters Computer industry hopes lie in the clouds: Eric Auchard Thu Mar 26, 2009 1:54pm EDT Email | Print | Share | Reprints | Single Page [-] Text [+] By Eric Auchard LONDON (Reuters) - No one can easily define it. But the next phase of the computer revolution is busy being born out of the ashes of the current economic crisis. The new approach delivers computing power as a service over the Web, like an electric utility, instead of making customers buy computers they manage themselves. It goes by the hazy term of "cloud computing." Forget your tidy distinctions between hardware and software, networking and storage, the Web and the desktop. Most disappear as they merge into the cloud. Clouds are located in centralized data centers that can house thousands of pizza-sized boxes, networked computers that can each process millions of transactions. They take advantage of the latest software that go by buzzwords like Web 2.0, virtualization and open source. Always in search of the next big idea, the technology industry has latched onto the cloud as its big new organizing principle, once more normal corporate spending patterns return. "Compelling economics will ultimately force you to move to clouds," Erich Clementi, IBM's general manager of cloud computing, told a Dublin conference last week. IBM is setting up centralized cloud computing centers across the globe. Six months into a financial crisis that has stifled most corporate initiative, two of the world's largest technology companies are taking the offensive. Network gear leader Cisco has jumped into the market for big business computers called servers, while computer maker IBM is in talks to buy Sun Microsystems, another server maker, in its biggest merger deal ever, sources say. The value of the deal could run up to $8 billion. Both Cisco and IBM aim to capitalize on the emerging shift to cloud computing, in particular by grabbing bigger slices of the data center supply market. They are looking to turn vast farms of server hardware and software into utility services that customers can rent. The promise of the cloud is to do away with the need of organizations and individuals to maintain their own computer hardware, software, storage and network gear. The cloud metaphor is used to disguise the complexity of bringing all these pieces together. It's the difference between owning and repairing a car yourself or leasing one with a mechanic to keep it running. These actions, as they play out in coming years, have hundreds of companies large and small reassessing their strategies ahead of what Wall Street analysts are predicting will be a wave of mergers in the tech world. This consolidation could sweep up not only hardware makers, but software, networking, data storage and semiconductor suppliers as well as Web services. CUMULO-NEBULOUS There is no agreement on how to define the cloud. There are complicated academic definitions and others full of self-serving marketing spin. Computer maker Dell, created an industry uproar by trying to trademark "cloud computing" last year, but has retreated after widespread criticism they were claiming ownership for a generically accepted phrase. The notion of centralized utility-scale computing dates is decades-old, dating back to the 1960s when corporations rented time slots on mainframes. Web hosting services proliferated during the 1990s. The term "cloud" to describe the inner workings of the Internet-at-large date back to the 1970s. Continued... View article on single page Share: Del.icio.us Digg Mixx Yahoo! Facebook LinkedIn Next Article: Danes lead world in telecoms technology: WEF index also on reuters Financial woes spawn words like "chiconomic" Commentary: Drug wars and the balloon effect Send Questions: Ask the World Bank President More Technology News Twitter to seek revenue from businesses Danes lead world in telecoms technology: WEF index U.S. billionaire roars into space history UK iPhone users lead way in Web, email use: survey Nintendo Wii shipments top 50 million since launch More Technology News... Editor's Choice Slideshow A selection of our best photos from the past 24 hours. 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