What is Cloud Computing?

What is Cloud Computing?

The ‘cloud’ is the latest buzzword currently on the tip of many techies tongues. But what is it and why is it becoming so popular?

Well as a concept it is not new, for the last 10 years it has had a range of names, some of which you may have heard of; Software-as-a-Service (SaaS), Application Service Provider (ASP) or Utility Computing. Cloud computing seems to be a slightly more tangible title that people find easier to grasp and therefore has become ubiquitous over the past few years.

The Growth in Cloud

The increasing coverage of Cloud Computing as the latest model for IT, owes much to the large investment from some of the world’s most recognised enterprises; Google, Amazon and Microsoft have all been investing millions into their own Cloud service ventures. Such has been the inward investment that market research firm ‘The 451 Group’ recently estimated that cloud-services marketplace will reach $16.7B in revenue by 2013.

But what exactly is Cloud Computing and what is causing it’s rapid growth?

Nicholas Carr, technology writer and former chief editor of the Harvard Business Review, claims that cloud computing is “a paradigm shift similar to the displacement of electricity generators by electricity grids in the early 20th Century”. The idea being that an organisation’s IT will be viewed as a utility expense not dissimilar to that of a water or electricity bill. To some it might seem far-fetched, but it is quickly becoming a reality.

The Cloud Computing concept is one based on the outsourcing of computing resources. Rather than purchasing certain hardware or software at relatively high capital expenditure, companies in effect rent applications from service providers then access them over the Internet. As an alternative to managing traditional IT resources, a host company takes care of the background technicalities and you simply connect to your services whenever needed. These services are hosted online on secure servers - a network of computers collectively referred to as ‘the cloud’.

What could Cloud Computing mean for the small-medium sized company?

The delivery of IT through a utility based delivery model can have a huge cost advantage for the SME. As well as cost savings, there is a large reduction in time spent on IT maintenance.

The Cloud model can also help companies avoid return on investment risk and uncertainty, being able to switch service provider should the service not work properly – avoiding the nightmare of expensive fixed asset failure six months down the line from purchase.

Cloud Computing offers efficiency and utilisation of resources based on a ‘pay-as-you-go’ model for improved scalability. Businesses can allocate more or less funds to services depending on how much they actually need, growing or reducing over time. The avoidance of upfront capital expenditure also allows firms to get up off the ground and running much quicker than before. This can be a massive benefit to the smaller company. With no initial cost barrier holding them back they can drastically decrease time to market.

The advantage of location independence is another key benefit of cloud services. Advances in Wireless Broadband and 3G technology have made accessing the Internet whilst on the move easier. Users can wirelessly connect to their software applications and store data instantly over the internet. The result is freedom from in-office infrastructure. Some argue that Cloud Computing will never really take off because users are so reliant on the uptime of a good quality internet connection. The reality is however, that although right now Internet connectivity is not ubiquitously available, it is surely only a matter of time before technology evolves sufficiently for this never to be an issue again. The growth in Dongle sales and soon mobile 3G connections upgrading to 4G gives a clear indication of demand.

Some detractors of Cloud Computing argue that the accessing of key company applications over the internet represents security concerns. In reality it is no less secure than internet banking – in many cases more so. Using certain cloud-based applications means less critical data resides unsecured on company hardware and reputable cloud-service companies have comprehensive failover measures that guarantee uptime. As far as third party confidentially is concerned, data contained on host servers is encrypted making it unreadable to unauthorised bodies.

Is Cloud Computing the future?

Whatever your experience of Cloud Computing, it cannot be denied that it is already adding real value to small-medium businesses all over the world, improving efficiency, security and mobility. But perhaps the biggest advantage of all is that it allows companies to develop focus. With less worry over IT systems and maintenance, companies have more time to concentrate on growth.

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