Cloud computing – what does it mean for online gambling?
by Tibor Simic
Cloud computing is the buzz of the IT industry. The top players – including Microsoft, IBM, Google and the dot-com champion Amazon – compete to be associated with the term. It has already crossed paths with the online gambling business, for example, in March, when UK-based egaming operator Bet365 announced that the new version of its in-play betting will be dramatically cutting down latency, courtesy of their brand-new private cloud. This suggests opportunities for the tech-savvy gaming operation, but it does not help that there seems to be a lack of clarity about what precisely cloud computing is, how it works, and where it fits in the overall picture.

Cloud computing is one of the ways to provide computing resources, anything from storage and bandwidth, to software suites, to the entire deployment platform for your own products. The twist is that resources come from a seemingly infinite pool, on demand, everywhere within the reach of a network connection, with negligible or zero configuration on the user’s part. This is in contrast to the traditional approach, where the user must own an actual piece of hardware or a copy of software to use them. 

A cloud storage service is to a hard disk what a tap is to bottled water.
Many familiar services – which you perhaps use every day – can technically be described as “cloud computing”, such as your webmail account, an image-sharing service, or a web-based game. However, the term is not so much a technical definition as an image, used by the marketing and the media to convey the idea of a remote service replacing an on-site product, presumably by being more convenient, flexible and cheaper.
The “water supply,” to extend our tap metaphor, is typically a highly distributed system, possibly built from commodity hardware, that is very easy to scale by plugging and unplugging machines as needed. The resulting economies of scale are a major part of cloud computing’s appeal. The “supply” may provide computer capacity to sell to the public (“public cloud”), use within an organisation (“private cloud”), or share among a limited number of organisations (“hybrid cloud”.) By the process of virtualisation, “raw” computer capacity is served to the end user as a virtual piece of familiar technology – for example, a virtual server.
So, what can all this do for your business?
Perhaps you’re a startup. In that case, buying from a public cloud, such as Amazon EC2, is ideal to turn fixed hosting costs into variable expenses. You could pay for a cheap amount of service to maintain online presence, and, if your offering suddenly turns into a runaway hit, you can charge up your virtual server with a click of a mouse, for as long as the demand is high.
Or maybe you’re a large enterprise with a private cloud in the budget. 
Elasticity will work for you, too. If you can take disk and RAM away from your (virtual) .us server and add them to your .im server with a single click, you will utilize your data centre more efficiently at no additional expense.
Or, why not provide a cloud service yourself? The entertainment industry has already begun looking into ways to capitalize on this, and an answer appears to lie in bringing cloud computing to handheld devices. Optimized for network connectivity, but with limited on-board resources, smartphones, tablets and netbooks fit well in the cloud computing model. Companies such as Canonical, the makers of the Ubuntu operating system, run media shops which store the purchases in a cloud and stream them to iPhone and Android devices on demand. Cloud gaming, a fairly recent development, crunches 3D in the cloud and streams it to devices that could not create such sophisticated graphics on their own capabilities. This market is still experimental, and perhaps you can be the first to put gorgeous 3D croupiers on digital lifestyle lovers’ Chromebooks and Iconias. 
Security and stability are crucial and complex issues. Arguably, cloud computing offers some advantages in both areas, such as attendance by dedicated security teams and the ability to remove failed or compromised servers without taking the entire system offline.
However, this has not always proven true.
In April 2011, Amazon’s EC2 cloud inexplicably crashed, pulling the plug on thousands of websites, including Web 2.0 flagships Foursquare and Reddit. The same month, a successful hacking attack on Sony’s PlayStation Network put 70 million subscribers at risk of identity theft and greatly damaged Sony’s reputation. These incidents show that cloud computing tends to put all the eggs in one technological basket. While no online service is immune to hacking or crashing, the failure of a cloud is catastrophic.
Overall, despite its pitfalls, cloud computing is a new paradigm – it has been gaining momentum since 2006 – that has already introduced significant changes in how computing power is delivered and used. Today, its appeal lies in variable costs, convenience and scalability. In the future, we may see these characteristics become the driving factors of innovation in delivering the next generation of attractive, immersive experiences to millions of handhelds and computers. The paths of the IT and gaming industry are bound to cross with increasing frequency in the years to come.

About GBGC:
GBGC is an independent, specialist gambling consultancy firm dedicated to providing gambling data, research, industry trends, and advice to the international gambling industry.
GBGC also produces the comprehensive Global Gambling Report, currently in its sixth edition, as well as online gambling statistics and analysis on the Interactive Gambling sector.
The gambling statistics and forecasts that are contained within the Global Gambling Report have become widely recognised within the industry, the financial community and the Media, as the industry standard for sizing both the online and offline gambling markets.