Every so often, software development goes through major disruptive changes.

The introduction of object-oriented programming was a major paradigm shift in the way a computer programmer breaks down project requirements into distinct islands of code referred to as “objects”. Properly applied, it helped to make code more modular and easier to read and maintain.

With the rise of big datasets, the introduction of functional programming helped programmers search for and manipulate data much faster and more efficient.

The introduction of XML helped to create a universal and portable data format to exchange information between completely different and architected systems.

SOAP and REST based web services have played a huge hand in easily connecting remote computer systems around the globe together.

Agile and Scrum development methodology were created to address the shortcomings of rapidly changing project requirements midway through a project.

And of course, the revolution of web application and mobile device development has pretty much completely changed the way software developers typically create applications… the concrete proof is challenging someone to find anyone who goes to a store to purchase shrink-wrapped software off the store shelf and manually installing it to their computers. Thanks to the rise of the internet and mobile smartphones and tablets, it all happens wirelessly over the internet… no fuss, no muss.

Lately, cloud computing has become the hot new thing.

The largest tech companies in the world are aggressively adopting cloud computing for different reasons.

Let’s take Apple, Microsoft, and Amazon as our case studies.

Microsoft’s Approach to Cloud Computing

Out of all these companies, I think Microsoft has the most to gain or lose, depending on the success or failure of their efforts to adopt cloud computing into their products and services.

From the early 1990s to about 2010, Microsoft reigned supreme as THE software company juggernaut of the world. Pretty much every desktop and laptop computer on the planet used some version of Microsoft’s flagship operating system Windows, in one form or another. And to this day, Microsoft Office is still the dominant commercial word processing, spreadsheet, presentation and e-mail software productivity suite used by most consumers and companies on the planet.

We’re talking MASSIVE profits on a stratospheric scale… BILLIONS of dollars of revenue. Microsoft had a near monopolistic dominance in the marketplace and there seemed to be no end in sight for their revenue gravy train.

That is until the rise of two things… the internet and the iPhone.

The internet and the rise of internet application development suddenly made the importance of the operating system not as important as it was.

It didn’t really matter if you had a Mac, a Linux or UNIX box, or a PC system. As long as you had a capable web browser installed on your computer, you could use an internet application for all your e-mail, spreadsheet, word processing and presentation needs.

And when Apple introduced their iPhone to the world, it gave millions of consumers the ability to use all those useful applications on their Apple-branded smartphone device.

And more importantly, it didn’t require one to purchase Microsoft Windows or Office to do so.

It doesn’t take a financial analyst to see how this has affected Microsoft’s bottom line in a very negative way.

The profit that Apple makes from their iPhone division alone has long dwarfed the total profits of ALL of Microsoft’s combined divisions of their company for quite a number of years, and it’s only growing faster every year.

It’s clear that Microsoft’s traditional software revenue model will no longer sustain them financially at the levels they used to enjoy before the rise of the internet and smartphones like Apple’s iPhone.

The change of CEO leadership at the top is a clear indication Microsoft knows they need to change their business and revenue model quick, or they’ll find themselves toppled by a new “top dog” company who will become the new dominant computing player of the world.

Their new CEO, Satya Nadella, has clearly indicated the new company product strategy and direction is “cloud first, mobile first”.

Everything they do nowadays revolves around developing software for mobile devices and software that either runs in the cloud or uses primarily back-end services that exist in the cloud.

They realize the reality that we are now neck deep in the “post PC” era. That is, an age where many computer consumers no longer primarily sit in front of a traditional bulky and large desktop computer for their computing needs.

The Post-PC Era

These days, the new norm is checking your e-mail, surfing the web, and running your core software on post PC devices like tablets and smartphones.

When the software application you use lives in the cloud, or stores your data in the cloud, you suddenly enjoy many beneficial advantages over the old way of running software where you would install it locally on your computer and all the data associated with that application lived locally on your computer as well.

Whenever I purchase digital music that lives in the cloud, it really doesn’t matter what physical device I’m currently using to listen to that music. I can listen to my digital music on my laptop computer via my web browser and music applications. I can also switch to my iPad tablet and listen to that same music there. Or on my iPhone. Or in my car, via Bluetooth connectivity to my iPhone. And the beauty is my digital music only lives in a single place… the cloud.

I never have to re-download any of my music collections to any of my local devices. As long as I have a reliable internet connection, I’m good to go.

This is the true power of cloud computing. And the company who hosts my digital music or is receiving my music subscriptions are making easy profits simply by making sure my digital music is safe and secure in their cloud computing systems and accessible 24/7 by me.

This is the business and revenue model Microsoft knows they must end up in, in order to stay profitable and relevant for the remainder of the twenty-first century. And we can already see they are clearly moving in that direction with their yearly subscription models for Windows and Office.

It’s actually a better revenue model than the old way they used to sell software. Back before the internet, you could purchase a copy of Windows and Office, and as long as your computer kept on running properly, you could those same versions of software for the lifetime of that computer, without needing to upgrade.

The subscription model clearly offers a recurring payment model that over time, can generate more profit than a single software payment model.

How Apple Is Embracing the Cloud

Apple is also embracing the cloud computing model in their own way.

Their preferred business model for purchasing their digital music library has moved from the single payment purchase model to a subscription model where you pay a recurring monthly or yearly subscription, for the privilege of listening to music on your Apple devices over the internet where your music library lives in the cloud.

It’s not just music data. When you purchase any Apple devices, all of your applications and the data associated with those applications live in their cloud systems.

So whenever I purchase a new Apple iPhone or iPad or any other of Apple’s hardware devices, it remembers all the previous applications and historical data I have used with those applications and automatically syncs and installs those applications down to my new device, thanks to cloud computing.

This is a clearly superior way of installing and running software in this day and age.

When anyone sends me a text message, the message is routed through their cloud computing infrastructure, so that the message gets downloaded from the central cloud location down to each of my registered apple devices, so I see that text message on my iPad, iPhone or MacBook laptop.

Amazon and The Cloud

Amazon’s AWS business has helped Amazon in a huge way. Their business model, since their early inception back in the 1990s, has always been based on volume of internet e-commerce sales and razor thin profits. But with the pure gravy, recurring revenue profits from AWS, Amazon has been able to show Wall Street they are clearly making real and substantial profit that is only growing bigger with each passing month.

AWS allows any organization to put all their enterprise data and applications in Amazon’s cloud-hosted platform.

This lifts the burden of an organization needing to worry about all the associated headaches and 24/7 support of hosting their own data on locally hosted company servers.

Many big enterprises across the globe are clearly interested in this new hosting model and are signing up in droves with Amazon, to enjoy their AWS hosting services.

The New Norm?

Cloud computing is clearly the new way for organizations to do business and run software.

But as with anything else, nothing is a silver bullet. Cloud computing isn’t perfect and there are problems and dangers that organizations need to be aware of and ready to react to.

Some massive outages occurred within Amazon’s AWS hosted servers, which caused massive problems for companies who use AWS to host their important enterprise applications and data.

Companies that run their business based on high traffic e-commerce would be massively affected by even a few minutes of downtime on AWS hosted servers. Like in the millions of dollars. Or even more.

Therein lies the danger of putting all your digital eggs in one basket.

That said, cloud computing is no fly by night operation. It’s here to stay and only getting more relevant and more important by the day.

So getting your head in the clouds isn’t necessarily a bad thing!