Cloud computing will add 1 trillion in productivity over the next five years and cloud services enable streaming of games like world of warcraft to smartphones

1. Cloud computing will boost job creation in the European union, and add 763 billion euros ($1,019 billion) in productivity to the top economies over the next five years, according to a study from the Centre of Economics and Business Research (CEBR).

“We believe cloud computing will impact to tune of 177 billion euros (a year) by 2015,” said Andrew Moloney, a director at U.S.-based IT firm EMC Corp. (EMC.N), which commissioned the study.

70 percent of the time in IT departments is spent on keeping the lights on as opposed to innovating and driving new business models. “Cloud computing is unlocking that capability, whether it’s large enterprises using private cloud infrastructures or SMEs using more public cloud infrastructures.”

The study found that while cloud computing would result in cost savings, it would lead to the creation of 446,000 net new jobs a year by 2015 from the creation of new small businesses.

Researchers based the analysis on the assumption that 100 percent of business workloads would move to the cloud by 2014 from about 20 percent today

2. MIT Technology Review reports that cloud services let gadgets punch above their weight

Smartphones and tablets have never been more popular, but they pack puny computing power compared to the average desktop computer. Two companies hope to change this by connecting modestly powered portable devices to powerful Internet servers that perform intensive tasks on their behalf. This week, both these companies–OnLive, based in Palo Alto, California, and GameString, in Seattle, Washington–demonstrated handheld gadgets running high-end games and other complex software.

Since launching last year, OnLive has used powerful servers to stream computer games to its subscribers’ PCs. It recently released a lightweight “microconsole” that brings the service to television sets, and it also has its sights set on portable devices. Yesterday it released an iPad app that uses the same technology to bring those PC games to Apple’s tablet. The action is relayed from the server to the app using compression algorithms that ensure quick transmission of data over a wireless connection and the Internet.

GameString released its own demo video yesterday, of an Android smartphone being used to play the multiplayer game World of Warcraft. The Android app was made using Adobe’s Air platform for web apps and a software toolkit created by Gamestring to help game developers make powerful games that run partly on a mobile device and partly on a cloud server.

Streaming a game is much more complex than streaming video or music, though. Video software typically “buffers” several seconds of footage ahead of what the viewer sees at any time, in case of connection problems. This can’t be done with games, because what happens in the next few seconds depends on the player’s present actions. Instead, compression has to be good enough to ensure that the data stream never falls behind long enough to affect gameplay.

OnLive’s engineers have developed algorithms that are tuned to a particular game, and even a particular user’s Internet connection. “The compression algorithm that we use can even vary from scene to scene,” says Perlman. “Darkness, detail, and the pattern of the 3-D motion in the frames all make a difference.” If data is lost in transmission, then OnLive’s software attempts to conceal the error by extrapolating from what is known, he says. All of that work is done by software running on remote servers-in the cloud. The software installed on a user’s device is very simple, sending little more than the coordinates of the user’s mouse and the timing of keyboard or button clicks.

The technology has applications outside gaming, says Perlman, who yesterday demonstrated a still-unfinished app that brings a full Windows 7 desktop to the iPad. “Everything works as if it was local,” says Perlman, “even high-end applications like professional video editing or computer-aided-design applications typically used on a workstation.”

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