How Cloud Computing Is Changing the World

At first, just a handful of employees at Sanmina-SCI (SANM) began using Google Apps (GOOG) for tasks like e-mail, document creation, and appointment scheduling. Now, just six months later, almost 1,000 employees of the electronics manufacturing company go online to use Google Apps in place of the comparable Microsoft (MSFT) tools. "We have project teams working on a global basis and to help them collaborate effectively, we use Google Apps," says Manesh Patel, chief information officer of Sanmina-SCI, a company with $10.7 billion in annual revenue. In the next three years, the number of Google Apps users may rise to 10,000, or about 25% of the total, Patel estimates.

San Jose (Calif.)-based Sanmina and Google are at the forefront of a fundamental shift in the way companies obtain software and computing capacity. A host of providers including Amazon (AMZN), Salesforce.com (CRM), IBM (IBM), Oracle (ORCL), and Microsoft are helping corporate clients use the Internet to tap into everything from extra server space to software that helps manage customer relationships. Assigning these computing tasks to some remote location—rather than, say, a desktop computer, handheld machine, or a company's own servers—is referred to collectively as cloud computing (, 4/24/08), and it's catching on across Corporate America.