Today’s businesses turn to the cloud for everything. With more companies than ever making the move to adopt software, infrastructure, and platforms as a service, approximately 80% of enterprises have turned their attention to the cloud for their business processes.

Following our recent blog on the different deployment options—public, private, and hybrid—we would today like to take a second to look back to how we got to the world we live in today. 

From an “Intergalactic Computer Network” to a Market Force

While many think that the cloud is a new market phenomenon, the concepts discussed today have been built on decades of development and theorizing dating back to the 1960s. While market-defining enterprise applications like NetSuite started the push towards cloud computing in the late 1990s, the theories of the cloud date back time-sharing of the 1950s and clarified in the 1960’s when JCR Licklider envisioned an “intergalactic computer network.” 

1950s: Time-Sharing

In the 1950s, computers were massive pieces of equipment costing millions of dollars at the time, and John McCarthy introduced a concept believed to be the great-grandfather of the cloud—time-sharing. 

In a 1983 article reminiscing on the introduction of time-sharing, McCarthy described initial tests applying time-sharing of an IBM computer, described as “an operating system that permits each user of a computer to behave as though he were in sole control of a computer, not necessarily identical with the machine on which the operating system is running.” 

While limited to operators within a building, and very slow on the uptake, time-sharing did introduce the premise of multiple computers using the same central machine independently. This concept was expanded upon by JCR Licklider, who headed up the Information Processing Techniques Office at the Pentagon’s Advanced Research Projects Agency (ARPA).

The 1960s: Licklider and McCarthy Envision the Cloud

Licklider started the push toward making it a reality by inspiring the packet-switching and TCP/IP protocol used by ARPANET.

While ARPANET was filled with its own set of innovations, Licklider’s vision of a global network connecting governments, institutions, corporations and individuals in which programs and data could be accessed from anywhere was still long off. 

From here, this vision inspired grid computing—connecting geographically disbursed computers—and in turn led to the development of service bureaus and utility computing, expanding on the time-sharing concept.

1960s-1980s: The Rise and Fall of Service Bureaus

In the 1960s and ’70s, the idea of service bureaus emerged, which allowed users to share computers. Users had their own terminals that ran hosted applications using a protocol that would essentially send information from the service bureau to the remote terminal and take requests from that terminal and send it back to the service bureau, which would then be routed to the right application.

The concept of the service bureau fell out of favor in the 1980s with the advent of the “mini computer,” allowing everyone to have direct access to computing power.

1990s: The Cloud as We Know It

In the late 80s and early 90s, bandwidth was still limited, processing power was still weak, and the internet was a niche. However, by the mid- and late-1990s, the cloud was becoming a reality. In 1997, Professor Ramnath Chellapa of Emory University and the University of South California defined cloud computing as the new “computing paradigm where the boundaries of computing will be determined by economic rationale rather than technical limits alone.”

In 1999, the cloud as we know it became a reality with the launch of, allowing users to access applications for their business with no physical software by simply logging into a website. 

2000s: Cloud becomes a Reality

NetSuite, founded as NetLedger, quickly became a key player in the cloud ERP market, delivering a wide range of innovations and starting a conversation about launching mission-critical financial applications through the internet. 

By 2002, most ERP systems were “internet enabled,” allowing on-premises applications to access data from the internet to accomplish basic tasks. Technology continued to improve, allowing more organizations to deploy cloud applications during the 2000s.

New competitors continued to enter the market, providing cloud options with new features and better functionality, but it was still “untested” and many IT professionals balked at the idea of trusting the Internet to deliver ‘mission critical’ applications.

2010s: Cloud Becomes the Reality

Time passed and the cloud continued to gain momentum, resulting in the cloud vs. on-premises debates of the early 2010s. Today, however, the debate is no longer. Companies—both growing and global—have found that the reduced strain on internal resources, increased reliability, enhanced security, and unmatched flexibility are only a few of the reasons they made the jump.

However, while the cloud has become a driver of business decisions and a core focus of many businesses, it begs the question—how do you know it’s really “cloud”?

Free Guide: True Cloud vs. Fake Cloud: How to Identify and Understand the Differences in Cloud Software

True Cloud vs. Fake Cloud: How to Identify and Understand the Differences in Cloud Software was written to provide the answers that you need about the difference between “True Cloud” solutions and “Fake Cloud” products, giving readers a framework for making an informed decision. By reading this guide, decision makers will gain deeper understanding of the multiple deployment options, learn to decipher what it means to be a ‘true cloud’ solution, and read about the benefits of avoiding fake cloud options. The guide explores the following:

  • The history of business management software and the rise of fake cloud solutions
  • Issues and shortcomings of fake cloud applications
  • Benefits and reasons to choose a true cloud solution
  • A brief guide to the available options when selecting a true cloud solution

Those interested in receiving the True Cloud vs. Fake Cloud guide can learn more by previewing it below on SlideShare and downloading the entire whitepaper here.