New York - Lots of good vibes at the Cloud Computing Conference & Expo here at the Roosevelt Hotel. I’m not sure what kind of crowd was expected but maybe 400 people certainly overflowed the tidy ballroom Monday where keynotes were taking place, which I won’t call weak turnout in the current climate.

Given the sporadic customer cases at hand and amid hopes that this would be a humble kind of breakout year for cloud computing I was interested to hear Dr. Werner Vogels of Amazon describe the traction. Vogels had some interesting stories to tell about clients including Nasdaq, The New York Times, The Washington Post, who are using Amazon’s simple storage service (S3) and Elastic Computing Cloud (EC2) for projects largely around archival storage and access for customers. A couple of clients are dedicated to Amazon for all their data and infrastructure, including home video creation service Animoto, (which is getting a lot of Facebook traction) and photo sharing site SmugMug, which is storing 600 terabytes of data on S3 according to Vogels.

As Vogels put it, SmugMug found it getting deeper than it wanted into the storage business. “Seventy percent of their time was spent on storing instead of building better apps.”

Vogels says about 490,000 developers are working with downloads of Amazon Web Services. He said the company had learned a great deal from internal Web service development, where there is not direct database access and instead uses app servers to carve out segments of data for between 200 and 300 Web services that go into any typical Amazon page, according to Vogels.

“This has also driven our organizational structure. Each service has a team associated for development and operation.” Each service is also responsible for its own data store’s scalability and reliability. Like Smugmug, Vogels said, Amazon engineers were spending 70 percent of time on infrastructure matters like load balance, high availability etc. and little time on value creation.

Switching to a shared services model of infrastructure, and a EC2 virtual model that could be stopped and started at any time, Vogels said he still saw engineers hoarding servers, even if they didn’t need them. The behavior change that eventually came at Amazon was the result of requiring users to release unneeded servers with a guarantee that they could be reacquired in minutes.

For all the advances in hand, Vogels was careful not to extend consumer-facding successes to frontline business applications – yet. The requirements are going to be security, scalability, availability, cost effectiveness, reliability and performance, he said, and pointed to enterprise partners including IBM, Oracle, Microsoft, Red Hat, Sun, Salesforce, Capgemini as flexible providers of in house or outsourced infrastructure.

IBM’s Turn

Jim Rymarczk of IBM delivered the second keynote, replete with fair warning that “IT is at a breaking point and infrastructure will have to be delivered differently in the future.”

It was unfortunate that Rymarczk’s laptop PowerPoint presentation failed (isn’t it always the way at IT conferences?) and he was unable to deliver all the details he had in mind. He did talk about future benefits of virtualization, solid state drives etc. innovation.

But perhaps the main takeaway was that he feels these advances will make IT execution more difficult, not less, going forward. “The number of systems deployed will continue to increase, even with the financial crisis … the appetite for more information will increase ... IT environments will continue to be heterogeneous and diverse ... even cloud computing will be different kinds of clouds interacting ... today’s apps are highly multi-tiered … management software that doesn’t yet exist will be key … There should be no confusion that virtualization introduces considerable complexity, requires people and impacts every IT planning regimen.”

All these caveats and then some (“We’re in the first inning,” said Rymarczk) couldn’t contain the curiosity and optimism we are witnessing at something that has already been born and seems likely to grow up to be something pretty impactful. In the meantime, everyone is whispering, knowing already the obstacles that remain in the market and that some folks will have fun with an easy targtet.

One fellow in the audience from Pegasystems seemed intent to work this line, and, raised the usual fair questions (that were too many and far too long in length) on what most folks here already seemed to know.Everybody seems aware the hype is already in the market and there will be plenty more opportunities to shoot down cloud computing as it works through the kinks before it's ready for wider use.

Instead, it was nice to enjoy the moment and hear some substantive stories being told. Let’s just say the Roosevelt Hotel, where Guy Lombardo is said to have played “Auld Lang Syne” for the first time, might be the perfect venue to follow this story in years to come.

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