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Intuit's cloudburst frustrates customers

April 18, 2007

Here's further evidence of why, as more computing moves onto the web, a broad, shared computing grid is both necessary and inevitable. The servers that TurboTax-maker Intuit uses to process electronically filed tax returns were swamped yesterday as Americans rushed to get their returns in at the last minute. As the Washington Post reports:

A record number of returns from both individual taxpayers and accountants started causing delays early Tuesday in customers receiving online confirmation their tax returns were submitted successfully, he said. As the midnight filing deadline approached, the problem got worse. During times of peak demand, Intuit was processing 50 to 60 returns per second, [an Intuit spokesman] said ...

Usually, it takes only a few minutes after hitting the submit button for TurboTax users to get a message indicating the transaction had gone through. By Tuesday evening, however, it was taking hours, [the spokesman] said. "If you are sitting there and just did your taxes and want to get assurance it's been filed, it has to go into the queue," he said. "We are processing as quickly as we can given the unbelievable demand and the last-minute demand. You can't increase capability quickly enough to solve the problem for every single individual hitting the OK button."

Intuit is now hoping that customers whose returns were not processed before midnight will not face IRS penalties.

To run its business with private, dedicated servers, Intuit needs to build its data centers with the capacity necessary to handle the extreme spike in traffic - the peak load - that comes on tax-filing day. Thge vast majority of that installed capacity will go unused most of the time. Multiply that low capacity-utilization rate across thousands of companies, and you get a good sense of the wastefulness inherent in the proprietary model of computing, particularly as companies have to handle rapidly fluctuating web traffic. The only way to do cloud computing efficiently is to share the cloud - to establish a broad, multitenant grid (or a number of them) that balances the loads of many different companies. Otherwise, it'll be one cloudburst after another, and a whole lot of underutilized capital assets.


This seems like a good example where Amazon's Elastic Computing Cloud (EC2) would really shine. The sort of batch processing required here would scale very well on EC2, which could turn server instances on or off as demand required.

For a great example of a business doing this right now, listen to a recent Technometria podcast with Doug Kaye of Gigavox Media and Jeff Barr of Amazon's Web Services division. Gigavox's GigaVox Audio Lite is completed based on Amazon's various web services, and is infinitely scalable because of it. I'm sure we'll see more smart companies take that route in the future.

Posted by: Jason Berberich [TypeKey Profile Page] at April 18, 2007 11:29 AM

EC2 and such simply move the issue one tier away.

Worse yet. When the utility provider is overwhelmed, it is still the service provider that takes the heat.

Posted by: Gil Freund [TypeKey Profile Page] at April 18, 2007 01:54 PM

Actually a utility provider like Amazon with EC2 would have a very large capacity spread across many different industries. So they could handle peaks from those different industries at different times during the year:

Retailing customers peak on the lead up to Xmas
Travel companies peaking during January and Feb
Accounting/Tax at the end of financial years

(These also vary by country in some cases)

Thus the peak capacity provided by the utility would see peaks of use spread over different periods, The cost could be spread in this manner to balance more effectively than any single user or industry.

Posted by: Al [TypeKey Profile Page] at April 18, 2007 05:15 PM

You know, when I hear this stuff described as "utility" computing I always find myself wondering why the electrical utilities didn't go after this market (no, I don't really wonder, I know why). Especially now, with all of the focus on the electrical supply sourcing that utility computing providers have to deal with, it seems like it would be a nice fit - get electric power at transfer pricing rates instead of retail.

Posted by: Jim Stogdill [TypeKey Profile Page] at April 18, 2007 05:32 PM

Just think of all the inefficiencies through the entire system (of government) because we file our taxes all at the same time.

Why do we do that? Why not have each individual's tax year based on their birthdate?

It would eliminate the spikes in all areas.

Posted by: Shawn Petriw [TypeKey Profile Page] at April 19, 2007 12:24 AM

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