Is Seattle the Cloud Capital of the World?

umbrella dog

But of course,” you say, “doesn’t it rain all the time up there?” Well, sort of; that’s more of an unfortunate misconception than a reality. Local precipitation apologists abound in response —  “If you look at actual rainfall,” the line goes, “New York and Miami actually have it worse.” And so the precision interlocutor contrasts “Rainy Days” with “Annual Rainfall,” all along unaware that, in most cases, this distinction is about as good a conversation topic as is someone’s Math/Verbal breakdown on the SAT — absolutely nobody cares. At best, we’re left with: “Seattle: Not-the-‘Rainiest’-City-Depending-on-How-You-Measure-It.”

Leaving historical weather data for another day, let’s instead focus on the future. I’d like to propose a new moniker for Seattle, one that reflects its emergence as an innovation heavyweight and pioneer in technology. If you’ll indulge me, I dub Seattle: Cloud Capital of the World.

Take that, Sumner.

This Is the Dawning of the Age of a-a-S

Cloud capital, you say? No, not that kind of cloud. The cloud. The one that lets you stream Netflix and upload pictures to Instagram.

For the uninitiated, “cloud computing” — courtesy of The Financial Times — “means someone else runs your computers…while you use what they deliver [via the Internet] and focus on delivering value” to your customers (but if you ask five people, you’ll get five different definitions…chalk it up to newness). The early Instagram, for example, needed to utilize cloud computing when its own servers were outmatched by the service’s viral growth; by renting computing power from someone else who had capacity to spare (Amazon), it was able to scale as it grew, without needing to anticipate that extra capacity beforehand. Cloud computing basically gives businesses the benefits of unlimited computing power, minus the large time and monetary costs of building and mainlining their own data centers.

Most of the forms cloud computing takes sound foreign to the average person, and that’s sort of the idea. If you have heard of Software-as-a-Service, Platform-as-a-Service, or Infrastructure-as-a-Service, odds are you work in tech. These, and other, “as-a-Service” offerings are all examples of cloud computing, and for the most part, they’re used to improve business operations, not so much something that consumers “use,” like iPhones or Crocs. I’m one of the many happy Netflix customers, but the fact that Netflix uses the cloud when I stream a movie is actually somewhat invisible to me. This B2B focus of the cloud accounts for the disconnect between its size and the general public’s awareness of it: according to Forrester Research, the cloud computing industry was worth roughly $40 billion in 2011, and it’s posed to hit $120 billion over the next two years.

Companies like Pandora, Netflix, and Dropbox rely on cloud computing to lower their upfront infrastructure investments, instead using those resources to focus on providing great end-user experiences, which in turn helps catalyze the rapid growth we’re now accustomed to seeing from Internet companies. It turns out, investing in the user experience (by hiring great developers, designers, etc.) rather than investing in hardware and rent, yields better products and services for the end user.

My company, CloudOpt, offers a patented Speed-as-a-Service (Sp-a-a-S?) solution that helps businesses accelerate data movement from local servers into the cloud and between clouds. While some people might look at “accelerating data movement” as an extremely niche problem to be solving, we believe there are mountains of current and future cloud-users who we can serve. If we’re right, and if we do a good job, then that means these companies will spend less time transporting business-critical data, and more time shipping their particular brands of awesomeness.

Call us crazy, but we’re not the only Fools who think the future of cloud is already upon us: “The simple truth is that cloud computing is becoming as big a part of our everyday lives as cell phones or cable television.”

The Heart of the Cloud

Despite its ubiquity, the cloud is an elusive beast. A seemingly easy question like –“Where is the cloud?” — doesn’t have an easy answer. Instead, it’s sort of like the “rainiest city” thing: it depends on how you look at it.

When I stick my power cord into a wall socket, would we say the electricity is in the wall, or in my laptop, or wherever Puget Sound Energy was storing it before I plugged in? If you think of the cloud as electricity, then could you say the cloud is on my laptop when I stream Netflix? The answer is that, no, the cloud is not quite on your laptop (the electricity metaphor quickly crumbles), and it isn’t anywhere evocative of cotton-candy-zephyrs either.

What most people refer to as “the cloud” is in reality a series of humongous warehouses scattered across the globe, each built to hold and power thousands of servers that provide computing power to companies who’d rather rent than own them. So, where is the cloud? In the most oversimplified-but-tactile sense, it’s where the data centers are.

If we really wanted to get physical about it, we could attack the question by measuring square footage of data centers, or number of servers, or number of customers, or value of transactions, or total joules consumed. (As a fun aside, a 2011 Greenpeace report stated that: “If the Internet were a country, it would rank fifth for electricity usage.” That’s incredible.) While any one of these metrics might be helpful for specific cases, I’d argue they’re all probably missing the sun for the shadows.

Alternatively, let’s consider influence. Although an admittedly nebulous measurement, understanding influence would give a more accurate description of what’s going on.

There’s wide agreement that Amazon Web Services (AWS),’s cloud business, is the single most important player in cloud computing today. Its Elastic Compute Cloud (EC2) is a dominant favorite among developers, and there are estimates that Amazon contributes 1% of all North American Internet traffic — an amazing number for a company whose website most people might visit once per week. (To put that number in perspective, Google contributes 6%, including Youtube and

Seattle-based Amazon CTO, Werner Vogels, says AWS — whose most widely-used offerings include EC2 and Simple Storage Service, or S3 — serves “hundreds of thousands of businesses in over 190 countries…from Internet banking to protein folding, from social gaming to social collaboration tools…”  This wide range of clients sheds some light on that 1% number: while the press reports on the Pinterests of the world, who famously wouldn’t have been possible without AWS, Amazon maintains a focus on quietly chaperoning the expanding Web.

While the leading challengers — Microsoft Azure,, and Google Cloud Platforms — all have some traction and sturdy corporate commitment —  or in the words of Microsoft CEO, Steve Ballmer, “For the cloud, we’re all in” — they’re still smaller than AWS. Even Rackspace Cloud, a firm number two, has a lot of ground to make up:

According to an [Amazon] executive with knowledge of Amazon’s operation…just one of the 10 data centers in Amazon’s Eastern U.S. region has more servers dedicated to cloud computing than…Rackspace, [who serves] 180,000 businesses with more than 80,000 servers.

Part of Amazon’s pole position owes to the AWS Global Startup Challenge, which is already nearing its seventh year. Each year, four winning startups are given mentorship, free cloud computing, and $50,000 in cash to help grow their businesses.

Microsoft is also hoping to hook young companies on its cloud services, partnering with TechStars to launch the Azure Accelerator, which awards ten startups placement in a 3-month immersion program, each one receiving $20,000 in cash (in exchange for equity), mentorship, access to prominent investors, office space in downtown Seattle, and of course, free Azure cloud computing.

Most cloud computing providers do not nurture startups like this, but they probably should.

If you think the emergence of cloud computing and the accompanying abundance of startups is coincidental, it’s not. Indeed, cheap, scalable computing power is the proximate cause of the rise in startups, because it removes traditional capital constraints on bringing new ideas to market. The cloud is the Great Enabler of innovation.

The Startup Genome Project’s 2012 Startup Ecosystem Report measures attributes of global startup ecosystems, then averages them for the rankings. Of the seven attributes measured — Startup Output, Funding, Performance, Talent, Support, Mindset, and Trendsetter — Seattle scores most-highly in Talent and Support, and it ranks fourth overall. Compared to the rest, those two attributes don’t seem to come by accident.

If support is contagious, then maybe the voluntary founder’s pledge to “reinvest 5 percent of any personal wealth gained from an exit into [the Seattle] startup community” is moving the needle.

Certainly, it helps that the University of Washington boasts one of the top Computer Science and Engineering departments in the country. One CSE student who declined an offer from MIT explains: “[This] feels like one big family…No one is trying to back-stab you to get ahead of you. That’s really different than other programs.” A preference for culture over prestige might be a great career choice, too: 35% of the department’s graduates find jobs with Amazon, Microsoft, or Google. Of the remaining 65%, many found or co-found companies, something that the university’s president hopes to double over the next two years:

“Over time, universities have begun to understand that…what we do at a research-based university is really designed to make the world a better place. But if it stays in the university, it doesn’t accomplish its goal.”

Finally, the University of Washington and the Pacific Northwest National Laboratory have recently established the Northwest Institute for Advanced Computing, where surely some of the 15% of these graduates who typically choose to pursue further studies will find meaningful work. Ed Lazowska, a person involved in the NIAC and also the Bill & Melinda Gates Chair of the U-Dub’s CSE department, sees Seattle as the perfect place to conduct this type of cross-institution research:

“[Think about healthcare, systems biology, climatology, or consumer electronics pricing]. It’s all driven by big data, and it’s all tied to the cloud. And the Seattle area is really kind of the owner of the cloud.”

Amen, Ed.

To me, the cloud is an ethos more than anything else. It’s a relationship-centric mindset. It means realizing that our businesses, careers, and lives are not zero-sum games, that by lending a hand when you’re on top, you’re enriching the entire universe.

And in that sense, Seattle is the epicenter — the kingdom — the capital — of the cloud.

Just don’t forget your umbrella.

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