STEVE INSKEEP, HOST:

We're reaching the end of a deeply mixed year for the U.S. economy. The unemployment rate ends the year at its lowest point since 2009, yet still very high - 8.6 percent. Many of the unemployed have paid the bills only by borrowing from family and friends, as we're hearing elsewhere in this program. Yet it was a year of economic growth. And for some people, businesses and ideas, it was a breakthrough year.

We're going to highlight some of them in a series of stories called "A Good Year." It has, for example, been a good year for the digital cloud - companies have advertised this concept, in which you store your information in distant data centers.

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UNIDENTIFIED MAN #1: This is the iPhone 4S with iCloud.

UNIDENTIFIED WOMAN: Powered by Amazon's cloud technology.

UNIDENTIFIED MAN #2: To the cloud with Windows Live.

UNIDENTIFIED MAN #3: To create and share anywhere.

INSKEEP: So advertisers talk about it, but it can be a struggle to understand what the cloud really is.

NPR's Wendy Kaufman went to look for it.

WENDY KAUFMAN, BYLINE: Clouds are often ethereal and beautiful.

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KAUFMAN: But this one has a lot of concrete and security.

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DAVID SABEY: This is a ballistics-grade door and so you can feel the weight of it. And so we'll open the door and then we'll pass through. Now, this...

KAUFMAN: David Sabey, the owner here, is ushering me into a spotless Seattle-area facility the size of nine football fields. It's crammed full of racks and racks of powerful servers - essentially sophisticated computers that serve up information to other computers. There are lots of blinking lights and wires everywhere.

SABEY: Some of the compute cycles that are going on here could be providing a product for someone in Florida to Southern California to Alaska. So that's what a cloud looks like.

KAUFMAN: Well, sort of. Basically, the cloud is a fancy way of saying the Internet. Lots of us have been using Yahoo! or Gmail, so our email lives on the cloud, not on our computer. But email was just the beginning. This year the cloud brought us something we didn't even know even we craved: a digital storage locker.

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KAUFMAN: Think back to high school, where you stuffed that metal locker with books, homework projects, photos of friends, maybe even some music.

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KAUFMAN: But that music and everything else existed in only one physical place. You couldn't really drag that locker around.

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KAUFMAN: If you forget to get something and went home for the day, you could try the I-left-it-in-my-locker excuse. But now that excuse just won't cut it. Here's why.

FRANK GILLETT: If I store my information online in one of these clouds, then it's as if I suddenly have a magic courier that will run and retrieve stuff out of my locker and deliver it for me instantly.

KAUFMAN: And, says Frank Gillett, an analyst at Forrester Research...

GILLETT: The idea of having this magic courier is remarkable.

KAUFMAN: The couriers have names like Apple, Amazon, Google, Microsoft and some upstarts like Dropbox. And this year they ramped up their offerings and marketed them like crazy. They'll deliver e-books, photos, music and lots of other things from your cloud-based locker. And they'll make deliveries to almost any digital gadget.

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KAUFMAN: But businesses use the cloud differently. For them the cloud can function a bit like a giant kitchen you can rent. Think of all those servers as ovens.

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KAUFMAN: In the past, companies would often build their own kitchens with enough equipment to prepare things they might only need once a month. But now, says Frank Gillett...

GILLETT: They don't have to have their own kitchen or they don't have to have as big a kitchen.

KAUFMAN: A company might need one or two ovens or servers just for an hour every week to do its payroll, or it might need 100 to manage a worldwide network of customer accounts. By using the cloud, companies pay only for the time and equipment they actually use. Businesses can also use the cloud for takeout. For example, instead of building their own accounting system, they can use a premade cloud-based one, and the results can be delivered right to their front door.

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BRYAN THOMPSON: We literally charge our customers on a per-hour basis for the resources that they're consuming.

KAUFMAN: Bryan Thompson is with a rapidly growing Seattle-area company called Tier 3. It helps companies use the cloud.

THOMPSON: So we have customers that are spending less than $100 a month and we have customers that spend close to $100,000 a month.

KAUFMAN: Whatever the figure, it's often less than a company would spend to do the task on its own and it's often more convenient. Companies can also rent time to do projects on an almost unimaginable scale. This example comes from Adam Selipsky, a senior official at the part of Amazon.com which provides cloud services.

ADAM SELIPSKY: We recently had a large pharmaceutical company who's our customer spin up 30,000 virtual servers to do mathematical modeling.

KAUFMAN: There are very few companies that could afford or even want to manage something that big. In so many ways, 2011 was a banner year for the cloud, and next year's cloud offerings are likely to be even bigger and better. Wendy Kaufman, NPR News.

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