A Complete History of Cloud Computing


By 2020 the cloud computing market is forecast to exceed $241 billion - but how did we get here? Where did it all start?

Though the actual history of cloud computing is not that old (the first business and consumer cloud computing services websites – salesforce.com and Google, were launched in 1999), its story is tied directly to the development of the Internet and business technology, since cloud computing is the solution to the problem of how the Internet can help improve business technology.

Business technology has a long and fascinating history, one that is almost as long as business itself, but the developments that most directly influenced the history of cloud computing start with the emergence of computers as providers of real business solutions.


The internets "infancy"

Where business technology first became feasible and dreams of a global network where theories could be debated?"

Though computers had been around for some time, the state of the technology and the culture of the 1950s created the perfect environment for innovation to be made quickly. Computers were basically large calculators that used punch cards to work on calculations, so although they were useful, improvements could clearly be made. The cultural environment was shaped by Cold War fascination with the utopia that could be created using technology, as well as newfound prosperity to pay for it. These two factors meant people were both willing and able to invest in advancements.

The first practical microchip was developed in the late 1950s, and once computers could do more complex calculations, people started developing programs for business applications. The first routine office computer job is done in 1951 by the LEO computer, which was designed to deal with the overnight production requirements, payroll, inventory and other administrative tasks for J. Lyons & Co., a catering and food manufacturing company. This could be considered the first integrated management information system.

Did You Know Fun Fact:
The first practical microchip was developed in the late 1950s, and once computers could do more complex calculations, people started developing programs for business applications.

Almost as soon as computers were demonstrating their usefulness in business, companies started thinking about how to serve smaller businesses. In 1959, IBM introduced the 1401 model , which gave smaller businesses access to data processing computers. The 1401 was so popular that by the mid-60s, almost half of the world’s computer systems were 1401-type systems.

The 60s saw the world thinking internationally - and concept of delivering computing services internationally came into its own. In 1964, Douglas Engelbart and his colleagues invented a graphical user interface the used both windows and a mouse, which would be invaluable several decades later as the personal computer and the Internet became commonplace.

J.C.R. Licklider might be the biggest contributor to the history of cloud computing in this era. He spent the 1960s developing ARPANET – the forerunner to Internet. He also suggested there could be an “intergalactic computer network” in 1969, clearly anticipating the global domination of the Internet and, in a way, cloud computing. He was not the only person to have that idea, though. Before him, John McCarthy introduced the idea of “computation being delivered as a public utility” back in 1961. These visions of a global network and a utilities-based business model are, of course, two of the driving principles behind cloud computing and Internet access in general.

The internet’s "childhood"

Where it became clear that ARPANET was a pretty big deal and some big computer companies were founded

In the 1970s, the concepts and elements that were suggested in the 50s and 60s were being developed in earnest. Additionally, many of the world’s biggest computer companies were founded, and the internet was born. In 1971, Intel, founded in the previous decade, introduced the world to the first microprocessor, and Intel engineer Ray Tomlinson wrote a program that allowed users to send messages from one computer to another, subsequently sending the very first message that most people would recognise as email.

Did You Know Fun Fact:
In 1971 Intel engineer Ray Tomlinson wrote a program that allowed users to send messages from one computer to another, subsequently sending the very first message that most people would recognise as email

Meanwhile, Bill Gates and Paul Allen founded Microsoft in 1974, while Steve Wozniak and Steve Jobs founded Apple Computers in 1976 and introduced the Apple II in the same year. All the while, the US Department of Defence had been developing ARPANET into Internet, and in 1976, Xerox’s Robert Metcalfe presented the concept of the Ethernet.


Later in the decade, CompuServe Information Services and The Source both went online in 1979, foreshadowing the point when the internet would be hosted by and accessed through commercial service providers.

The 80s ushered in the first major, worldwide boom in computers. By 1980, there were more than 5 million computers in use worldwide, but generally these were built for business or government use. So in 1981, IBM put the first personal computer on the market, and in 1982, Microsoft began licensing MS-DOS, the operating system that, because of large-scale marketing efforts by Microsoft, most personal computers would run on. Then, instead of a global dystopia, 1984 brought the first Macintosh computer, the founding of Dell computer by Michael Dell and William Gibson’s coining of the term ‘cyberspace’.

The seeds were being sown for the rise of the internet.

The internet’s international debut

Where the Internet as a place for both commerce and communication came into its own.

The 1990s connected the world in an unprecedented way, starting with CERN’s release of the World Wide Web for general (that is, non-commercial) use in 1991. In 1993, a browser called Mosaic allowed graphics to be shown on Internet, and private companies were allowed to use Internet for the first time, too. 

Did You Know Fun Fact:
Netscape was founded in 1994, with internet traffic handed over to commercial enterprises like Netscape in 1995, with Amazon & Ebay founded in the same year.

Once companies were online, they began to think of the commercial possibilities that came with being able to reach the world in an instant, and some of the biggest players online were founded. Marc Andreessen and Jim Clark founded Netscape in 1994, and none too soon, since 1995 saw internet traffic handed over to commercial enterprises like Netscape. At the same time, stalwarts of the internet Amazon.com and eBay were founded by Jeff Bezos and Pierre Omidyan, respectively.

The internet’s "adulthood" and cloud computing’s rise

Where the dot-com bubble bursts like a pimple and cloud computing comes to the fore

The end of the 90s and beginning of the 2000s were a great time to find or invest in an internet-based company. Cloud computing had the right environment to take off, as multi-tenant architectures, highly prevalent high-speed bandwidth and universal software interoperability standards were developed in this time. Salesforce.com debuted in 1999 and was the first site to deliver business applications from a ‘normal’ website – what is now called cloud computing.

The unadulterated optimism of this time led to the dot-com boom, where internet-based companies, backed by seemingly endless venture capital and overly confident projections, grew rapidly. Many of these companies hoped they could run at a loss for a while, then charge for services later, which meant they were running on investment capital and earning no income at all. Amazon and Google both failed to operate at a profit in their first years, though this was because they were spending money on marketing efforts or improving their technology.

The dot-com bubble hit its peak on 10th March 2000, and then burst over the following weekend as major high-tech stockholders like Dell and Cisco sold off a lot of their stock. Several things could have contributed to the collapse of the bubble, including the anti-monopoly ruling against Microsoft (which, although not revealed until the beginning of April, had been widely anticipated). Other reasons include poor online takings from the 1999 Christmas season and Y2K – though not in the world-ending way many people predicted. Instead, businesses spent a lot of money updating systems and equipment, so when the day passed without event, businesses stopped spending money to cover the expense of updating so much. This meant that they stopped trading, put on hiring freezes and generally found ways to stop spending money.

Nonetheless, research shows that 50% of dot-coms survived until 2004, so instead of being driven out of business by the bursting of the bubble, businesses either thrived or were simply not viable.

Still, to continue to survive, businesses had to rethink or refine their business models and what they offered to customers. Many newer companies decided to offer services that saw the internet as a crucial part of the service, rather than as a medium to place orders or communicate with customers.

Amazon.com introduced Amazon Web Services in 2002. This gave users the ability to store data and put a gigantic number of humans to work on very small tasks (such as Mechanical Turk), amongst other services. Facebook was founded in 2004, revolutionising the way users communicate and the way they store their own data (their photos and video), inadvertently making the cloud a personal service.

In 2006, Amazon expanded its cloud services. First was its Elastic Compute cloud (EC2), which allowed people to access computers and run their own applications on them, all on the cloud. Then they brought out Simple Storage Service (S3). This introduced the pay-as-you-go model to both users and the industry as a whole, and it has basically become standard practice now.

Salesforce.com then launched force.com in 2007. This platform as a service (PaaS) let companies’ developers build, store and run all of the apps and websites they needed to run their business in the cloud. Google Apps launched in 2009, allowing people to create and store documents entirely in the cloud.

Most recently, cloud computing companies have been thinking about how they can make their products even more integrated. In 2010 Salesforce.com introduced the cloud-based database at Database.com for developers, marking the development of could computing services that can be used on any device, run on any platform and written in any programming language. 

Did You Know Fun Fact:
It's predicted that US tablet sales will reach 44 million in 2015 eclipsing laptop sales.

Of course, the future of the internet and cloud computing have in the past proved hard to predict, but so long as companies strive to connect the world and serve that connected world in new ways, there will always be a need for both the internet and cloud computing. Don't forget to read up on the benefits of cloud computing10 great cloud applications and services for SME's and our new guide explaining what is cloud computing.

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