Did you know the federal government spends over $75B annually on IT? With that number in mind, you can imagine the enormous amount of manpower it takes to choose, customize, build, deploy, and maintain separate instances of applications to run the government’s operations. I cannot imagine a more perfect environment to deploy cloud computing, and it is apparent that the President “gets it” too.

In keeping with his initiative for lowering the costs of running government, the White House this year launched apps.gov, an online repository for federal agencies to explore and purchase cloud-based IT services. So instead of having to individually seek out vendors, government agencies now have a one-stop shop to get most of what they’re looking for. And guess what – salesforce.com and Google are featured vendors.  

In a year of giant bailouts, it’s about time the taxpayer got a break from politicians, except this time it’s technology that’s doing all the heavy lifting.

You know the cloud computing model has hit it big when the second-largest city in the United States makes the switch. Los Angeles had previously been running Novell’s Groupwise (ouch!) and one can imagine that with the economic downturn drastic cost-cutting measures had to be made. This year they made the move to use Gmail for 30,000 city employees along with Google Docs. So instead of wasting IT resources to maintain an email server, they can now deploy those resources to initiatives that provide more value for the city.

The case for cloud computing was so clear that the LA City Council voted unanimously. Microsoft sent their big guns in to try and derail the Google move, but to no avail. Cloud computing has arrived in major fashion, and it’s become quite clear that vendors must either compete in that arena or they are in trouble.

In February, Google made the news somewhat ignominiously when it’s Gmail service was unavailable for several hours, and then again in September. Our own Reid Carlberg’s response to the issue garnered much interest on sites like Reddit and Stumbleupon: “I don’t care.” 

While his subject line was obviously written for effect, his reasoning is absolutely sound:

• Outages of Gmail are extremely rare
• Their support teams often know about a problem before you do
• You don’t need to buy additional maintenance to fix the problem
• Nobody lost any data

We’re pretty sure you’ve heard these themes before from marketing departments espousing the benefits of cloud computing (guilty!), but this is a prime example of why it works so well.

Anyone who has worked in an enterprise email environment managed by Microsoft Exchange, Novell, Lotus or any of the other major players has seen their work email unavailable but at a much higher frequency than Google. The odds of getting information about those outages from your IT was like pulling teeth, because they don’t want egg on their face.

Switching our corporate email to Gmail not only saved us a large amount of money each year, it has provided rock-solid reliability and a level of support that can’t be found anywhere else. Gmail rocks, plain and simple. 

If ever there was a ringing endorsement for the cloud computing model, it’s when the two 800-lb gorillas of computing join the game. What was considered a joke to most just 10 years ago became a very serious battle for cloud supremacy when Microsoft and IBM announced their entrance.

Microsoft is well known in business circles for its Office and server applications, but hasn’t done much in cloud computing. After a few secretive years of development under the code name Red Dog, Microsoft pulled the covers off of the finished product, “Windows Azure.” 

Much of the same can be said of IBM. Big Blue has been historically known for providing mainframes, servers, and data centers for large enterprises to run their businesses on, but didn’t have much in the way of a platform as a service. That’s now changed with IBM’s large push into cloud computing.

Amazon’s Web Services have been getting better and better, but typically by incremental amounts. Up until now, it’s been a slow trickle of improvements to a solid suite of offerings. Cheap storage, cheap computing power, cheap access to PCI compliance, etc.

This new offering however, may truly be a game-changer for their web services division. Amazon’s Virtual Private Cloud lets companies create their own isolated set of EC2 instances and connect them to their own existing IT infrastructure through a VPN connection.

What does all that mumbo-jumbo mean to the business management people? Simple. Now you can augment your IT’s infrastructure without huge capital expenditures. EC2 already runs Windows Server 2008, SQL Server, Oracle Database 11g, IBM DB2, IBM Websphere and many more.

Amazon’s immensely powerful infrastructure is available as a service at prices that will make you wonder if you should bother with your own hardware anymore.

The fastest growing social media site in 2009 was without question Twitter. The notoriety seemed to explode with the Iranian election and ensuing chaos, where reporters were unable to provide accurate, timely information. With the government lockdown, the citizenry got information out to the world through Twitter on their mobile phones. A new dawn of media became legit overnight.

Twitter users rely on the service for more than just timely information, it has become a platform for open conversations around any topic. Company’s products and services have become fair game for both interested prospects and disappointed customers. Instead of calling a sales or customer service line, people are turning to other users for answers on Twitter - leaving companies in the dark. Anyone who has tried to navigate a customer service "dial 1 for X" menu understands why so many are reticent to use them.

Salesforce.com recognized this growing trend and created a truly elegant application that’s easy to use. Salesforce for Twitter allows companies to participate in conversations actively, and track those conversations within salesforce.com, providing a more complete view of their prospects and customers. This added information gives companies an opportunity to better serve these people, and in the channel of their constituent’s choosing.

With this application, if someone expresses interest in your company, you can respond to them on Twitter through salesforce.com. Likewise for customer service situations. I don’t believe there’s such a thing as a 360˚ view of a customer, but having more information on hand certainly allows companies to provide more relevant service.

Check the video demo out below:

In late 2008, Google surprised the tech community by launching their own browser. Rumors swirled about the direction of the company, since this was Google’s first significant foray into building applications that run locally. What could they do in 2009 to top that? How about an entire operating system.

Google Chrome OS is built on the idea that other operating systems were designed in an era where most computing was done offline (Microsoft, Apple, are you listening?). Everybody knows the common complaints of those systems: expensive, heavy resource hogs that get slower and slower the more they’re used. Since many (if not most) common computing situations are now performed online, having a bloated operating system doesn’t always make the most sense.

The implications are clear. Google wants you running their operating system, using their browser, and accessing their online office applications (Google Docs). In keeping with their mantra "don’t be evil," Google claims there are multiple options from competitors to keep the DoJ from getting too keen on anti-trust issues. Google has clearly learned from Microsoft’s example.

Judging by the video below - this major undertaking is well under way, and if history is any indicator it will be highly polished upon full release.

Each business morning until the end of the year we’ll be highlighting what we think are the top 9 cloud computing stories that either took place or became more significant in 2009. Be sure to either check back here on the blog or follow us on Twitter @ModelMetricsInc for each update.

At number 9 on our list, cloud computing itself makes it as a top story of 2009. The year that has seen businesses and consumers alike continually stifled by the credit crunch has also seen the dramatic rise and growing acceptance of cloud computing as a legitimate enterprise alternative to more costly on-premise applications.

What was once viewed as pure marketing hype (and famously lampooned by Oracle’s Larry Ellison) is now the fastest growing sector in enterprise technology. In 2009 cloud computing pioneer salesforce.com became a billion dollar company, with no signs of slowing down despite significant economic headwinds.

Independent research firm IDC projects that from 2009 – 2012 the market for cloud computing will triple in size, exploding to US$42B. Their research supports the notion that companies are continually looking to lower their technology costs, and finding those cost reductions with cloud computing technology from salesforce.com, Google, and Amazon Web Services.