The Cloud Journey Has Just Begun

NEW YORK ( TheStreet) -- When studying cloud computing I feel like a kid again.

Not always in a good way. Take applications, for instance. Please.

The big cloud software outfits are either offering infrastructure like Amazon.Com ( AMZN), or building platforms like Red Hat ( RHT). An infrastructure is just capacity you rent. A platform just lets you write your own application, which is something of a one-off.

This is the way computing was before IBM ( IBM) created its System 360 in the mid-1960s. The 360's big innovation was an operating system that let you write a program once and run it on multiple machines. No more fitting the machine to the software. This was a very big deal.

The System 360 was followed by the rise of the mini-computer companies, like Digital Equipment and Data General, whose refrigerator-sized boxes didn't need special rooms but which (more important) ran standard software, applications you could just load and run.

Today the leading "cloud application" company is ( CRM), but as CIO Today noted in covering some of their latest announcements, they're offering applications only within their own cloud, just as IBM offered software only on its own mainframes.

Google ( GOOG) is offering standard office applications, like word processing and spreadsheets, but, again, they only run within the Google cloud.

A start-up called Snaplogic has just gotten $20 million to help companies integrate cloud applications with their on-premise solutions, notes TechCrunch. Connecting what you have with what you have in the cloud is going to be a big business next year for companies like Dell ( DELL) and IBM as well, writes TechTarget.

The problem is that the biggest public clouds today are fundamentally incompatible with other clouds. You can't take a piece of software off an Amazon cloud and run it on a Google cloud, or on Rackspace's ( RAX) OpenStack cloud.

This is the opportunity open source has been waiting for. Systems like OpenStack, RedHat's OpenFlow platform, or VMware's ( VMW) Cloud Foundry are designed to let you write one application that will run both on your private cloud and on a public cloud, or a selection of open clouds. Both Dell and Hewlett-Packard ( HPQ) are building clouds with OpenStack for just this reason, to create application compatibility between public and private clouds.

Amazon is trying to short-stop this by offering Business Applications within its cloud offered as subscription services from companies like Adobe ( ADBE), writes TechTarget. Google is doing something of the same thing with its Cloud Apps Marketplace.

But this too has a 1960s feel to it. If I'm just renting someone else's application, to run on someone else's hardware, isn't that timesharing? That's what CompuServe was doing a decade before they became a consumer service, in the 1980s. That's what GE ( GE) Information Services was about when I was in high school, notes the Computer History Museum.

We don't know, at this writing, how all this will evolve. The economics of public clouds are so far superior to those of roll-your-own private clouds that it's possible the private clouds may be strangled in their business incubators. All of which makes it hard to start a company devoted to "cloud application software" that can be sold the way Microsoft ( MSFT) Office was sold back in the day. Note that Microsoft's new pricing indicates they want you to do all that in their cloud now, as ComputerWorld reported this week.

The idea of this column isn't to confuse you, or cause you to despair. It is simply to indicate how early in its evolution cloud computing is today, and how much further it has to go. History provides a road map and clouds will evolve on their own path along the roadmap.

The journey has just begun.

At the time of publication, the author was long IBM, GOOG, MSFT, and GE.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.