So what is the cloud?

The Cloud ThingyBy now, most of us have heard of cloud computing.  Talk about a buzzword – it’s easy to get caught up in the term and not know what it actually does.  Is there any clarity about what cloud computing is?  Google, Amazon, Microsoft, and countless others offer the cloud with lots of claims associated with it:  it saves money, it boosts efficiency, it does email, hosting, backups, and so on.

So what is cloud computing?

In short, cloud computing is the future of technology for business.  Traditionally, businesses have managed their own infrastructure and IT resources themselves.  This in-house management requires high overheads, specialized staff, capital expenditures, and honestly – going in to work some mornings wondering if IT would work that day.

Do you ever wonder if the lights will work when you wake up in the morning?  Unless you’re in the middle of a blizzard, probably not.  Further, you probably don’t manage your own generators, substations, transformers and so on.  You pay experts with the best equipment, professionals and resources to manage all this for you.  The same should be true with your information technology, and the cloud makes this happen.

History repeats itself.

In the early 1900s, few people took advantage of electricity as a utility.  The technology was young and buyers were wary of the unproven systems and infrastructure.  Energy was self-manufactured by water wheels, steam engines, and muscle.  But by 1933 buyers were more confident in mature technology, and over 90% of electricity was provided as a utility.  Now any appliance could be simply plugged into the electric grid – the network.

Companies are seeing the same thing happen with the cloud.  The IT industry saw the first PCs rollout in the 1980s, and that led to the client server computing technology of the 90s.  As computing technology has emerged, the industry is moving to a virtualized cloud infrastructure.  Gartner research indicates that “by 2012, 20 percent of businesses will own no IT assets.”

The shift to IT provided as a utility has begun.  As it continues, computing will become a service almost exclusively supplied over a network.  Today’s desktop machines will turn into simple appliances that simply plug into the wall and pull their value from the cloud.

Cloud Technology

Cloud computing is essentially the convergence of three major technological trends:

1.       Virtualization

With the traditional hosting model, businesses have needed one dedicated server per each application. Each of these servers runs the application on top of an operating system, but only utilizes around 10% of its capacity on average – wasting countless resources and dollars.  Now, virtualization and virtual hosting allows those applications to be consolidated onto one server built specifically for virtualization.  Within each box run multiple virtual servers, each with its own operating system, CPU, memory, and storage.

A virtualized hosting environment allows a few machines to do what previously would have required several dozen.

2.       Utility Computing

Also commonly referred to as grid computing, utility computing is a way to provide technology where consumers access server capacity across a grid and pay on a fixed fee, monthly basis.  Under this model, computing technologies are provided in the same way that electricity, water, and other utilities are provided.

3.       Managed Services – SaaS and HaaS

Software-as-a-Service (SaaS) is a managed service that enables worldwide, anytime access to a hosted application from any computer with internet access.  SaaS applications are generally available through subscription or membership, and allow businesses the benefits of traditional hosting minus costs and capital expenditures.  Popular SaaS platforms are Salesforce.com, Gmail and other Google Apps, and WordPress.

Hardware-as-a-Service (HaaS) is a managed service that provides hardware to customers usually on a monthly licensing agreement without their having to purchase it.  The advantage here is that most small to medium businesses undergo significant financial strain for capital expenditures to purchase their own hardware. HaaS allows businesses to use the most current hardware for one monthly cost and no capital expenditures.

By themselves, each of these technologies brings limited benefit to the end user.  But when combined to into the cloud computing model, they create a service with significant advantages for business computing:

Cloud Computing Benefits: 

  • Businesses no longer have to own their own hardware, software, and licensing.
  • The service is fully managed by the provider – the consumer needs nothing but a personal computer and Internet access.     
  • It is elastic – a user can have as much or as little of a service as they want at any given time.    
  • It is sold on demand.    
  • Stored data is available through any computer with an internet connection.    
  • Businesses no longer incur large costs to refresh hardware and software.  
  • Technology resources are used at nearly 100% efficiency – saving money and preserving resources. 
  • Resources scale infinitely with business growth. 

The data center.

For a large, Fortune 500 company, the costs and resources associated with housing a complete data center with redundant environmental controls, fire suppression, security, and backup provisions are easy.

For the average small to medium sized business, though, this kind of data center is unrealistic.

Cloud computing allows small to medium sized businesses to utilize the same technological resources that Fortune 500 companies do because of the cloud provider’s data center.  A small business with 10 employees enjoys the same network that a 500 employee company does.

What drives cloud adoption?

Businesses adopt new technology for one primary reason: money.  If the cloud were just a novel technology, businesses would be reluctant to adopt.  Considering the huge financial advantages with cloud computing, more and more businesses are moving away from traditional hosting to a cloud model.

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