At the I/O conference in June, Google (GOOG) announced Compute Engine - an Infrastructure as a Service (IaaS) product that will provide companies with raw computing power by way of the internet.
Infrastructure as a Service has been one of the largest growth areas in technology. Companies are forgoing maintaining their own servers, and instead, paying firms like Amazon (AMZN) and Rackspace (RAX) to provide that server power.
By outsourcing their server technology, companies receive several benefits. For starters, companies can "scale" very quickly by renting server power. Because companies are renting the IaaS they can simply rent more servers to add capacity very quickly. If companies were not renting IaaS, they would have to physically buy and implement their own technology -- a slow and cumbersome process. Also, when companies physically buy servers, they must buy enough servers to maintain service during peak hours, meaning that the server power is wasted for most of the day. By having a flexible amount of server power, companies are able to pay only for the amount of server power they need...