A friend of mine is approaching retirement. She would like to get an overview of all her investments, both retirement assets and non-retirement assets. She would like to see how her actual asset allocation (percent is stocks, bonds, and cash) differs from her desired allocation. A spreadsheet would appear to be the best way to organize her data and make the projections.
The problem is that, while my friend has very good records and knows exactly how many shares of each stock and mutual fund she owns, she has no experience in designing spreadsheets. Since I have some experience in designing spreadsheets she asked me to help. But I don’t have access to her data. She is willing to let me see her data, but no one else.
I suggested we collaborate together using a Google Docs spreadsheet. I explained the concepts of cloud computing to her and she decided to create a Google account so she could use Google Docs. Besides the ability to collaborate on a spreadsheet in near real-time, Google Docs had an additional attraction. It contains functions that can look up the price per share of both stocks and mutual funds. So my friend only needs to enter the number of shares she owes for each investment and the spreadsheet will look up the current price per share and multiply the two to calculate the current value of each investment.
I created a spreadsheet and made my friend a collaborator. We both opened the spreadsheet. She entered the name of the first investment and I could see it on my screen a second or two later (we were talking on the telephone as well). I entered in the formulas to obtaining the share price for that investment and for calculating the dollar value. Next I replicated this row several times and she editing the stock symbols and number of shares for each of her other investments. While I watched these entries pop up on my screen I was entering in the formulas to sum each asset class. On her screen she could now see the totals and for the first time had an accurate idea of how her assets were distributed.
Next I created a place for my friend to enter her “desired” asset allocation and the formulas to compare the actual asset allocation with the desired allocation. While I was doing this she was entering in her desired allocation and we both saw how much the actual asset allocation differed from the desired allocation. The final step was for me to enter the formulas to tell her how much money to move from one category to another so that the actual asset allocation matched her desired allocation. This is called rebalancing.
The whole process took about an hour. If we had been emailing spreadsheets back and forth it would have taken days. Because we could both see what the other was doing in near real-time, if one of us did something wrong the other would notice and comment on the phone. So we never wasted a lot of time doing things that would have to be redone when the other one saw it. Real-time collaboration provides huge advantages over emailing documents back and forth. If you have more than two people collaborating, the advantages multiply.
Can you give me an example of the advantages of cloud computing over desktop computing? Why, for example, would I want to create a Google Doc file in the cloud rather than a Word Document on my computer?
Suppose you had a Word Document on your computer and, just to play around, you uploaded that document to Google Docs. If you flew from your East Coast home to Los Angeles to visit with a friend, you’d see the cloud advantage (once your flight finally left the ground). The Google Doc file is available from your friend’s computer (PC, Mac, Linux). Your Word file is still sitting on your PC at home, completely useless to you in LA.
Your friend, who is looking over your shoulder, says, “That document is pretty good, but it needs to be polished. Too much use of the passive voice, too many pronouns with indefinite antecedents”. At this point you remember your friend majored in English. “Let me have a go at it and I’ll fix it up”, says your friend. So, you tell the cloud (Google Docs) to let your friend have access to the file as an editor so he can muck around with your prose.
You fly home (after another interminable wait at the airport) and pour a glass of wine, since those airport delays always leave you frazzled. You open your browser to your Google Docs account. You notice that your document now reads like it was written by an English major and you’re delighted with the changes your friend made. The only problem is that on the flight back (or was it while you were still on the tarmac waiting those two hours to take off?) you thought of one more thing that should be in the document. So you type, “It has been established by him that the cost of raw materials for this project is much higher than it needs to be.”
You go to refill your wine glass and when you return to look at what you just wrote, you find it now says, “Professor Johnston established that the cost of raw materials for this project is much too high”. Once again your friend has polished your file.
And working in the cloud is free, right? Right!
What’s all this cloud computing hype about? Isn’t cloud computing just another name for the internet?
The answer is: NO. Cloud computing uses the internet — and in fact couldn’t exist without the internet — but cloud computing implies a lot more than just using the internet. What makes a cloud differ from an ordinary website?
Characteristics of the cloud:
- The Cloud provides storage space for your files
- The cloud provides software to process your files (wordprocessor, photo editing, email, contact management,calendar, etc.)
- The cloud automatically backs up your files; copies of your files are stored in different geographical areas
- Data can be accessed by multiple users at the discretion of the creator of the data.
Cloud computing mirrors desktop computing. On a personal computer, data files are stored on a hard disk. The software to process these files is also stored on a hard disk. You sit down at your computer and double click on a “.doc” file and Microsoft Word launches to display the data in the file and to allow you to change it.
In cloud computing you sit down in front of your computer and launch your browser (internet Explorer, Firefox, etc.). You point you browser to a file in the cloud and select it, say a Google Doc file, and the Google Doc wordprocessing software launches. Google Docs shows you the data in the file and lets you change it.