What looks to be new is the way high-speed Internet access and almost limitless supplies of storage and processing power can now be pulled together.
A vivid example of cloud power comes from Animoto, an 18-month-old start-up in New York that lets customers upload images and music and automatically creates customized Web-based video presentations from them; many people then share them with friends. Animoto gives a free video presentation to anyone who signs up for its service, and earlier this spring about 5,000 people a day were trying it.
Then, in mid-April, Facebook users went into a small frenzy over the application, and Animoto had nearly 750,000 people sign up in three days. At the peak, almost 25,000 people tried Animoto in a single hour.
To satisfy that leap in demand with servers, the company would have needed to multiply its server capacity nearly 100-fold, says Stevie Clifton, 30, a co-founder of Animoto and the chief technology officer. But Mr. Clifton and the other co-founders had neither the money to build significant server capacity nor the skills — and interest — to manage it.
Instead, they had already worked with RightScale, a cloud services firm in Santa Barbara, Calif., to design their application for Amazon’s cloud. That paid off during the three-day surge in growth, when Animoto did not buy or configure a single new server. It added capacity on Amazon, at the cost of about 10 cents a server per hour, as well as some marginal expenses for bandwidth, storage and some related services.
