May 10, 2010

What is “cloud computing”? And why should you care?

I know you’ve heard about it. Pundits talk about it. Companies promote it. But what is, exactly, “cloud computing”? It’s really not that complicated (unless if you talk to industry analysts throwing around industry jargon). How about if we start with some examples: Yahoo! email, Flickr photo sharing, Facebook. These are applications that are accessible through a web browser, and as a user, you have no idea where the data is stored, what kind of computing infrastructure is used to run the applications, how many servers are running to ensure up time, or where all this computing technology resides. This is cloud computing in a nutshell.

So what is the big deal? The big deal is that with cheaper infrastructure costs, and faster and more accessible broadband access, a lot of technology vendors are now offering their sophisticated technologies “in the cloud” – meaning, instead of the user purchasing the software and running it in their own data centers, or on their own desktops, the application runs somewhere on the internet and is accessible through a browser. All the examples I used are for free applications, but for paid technologies, the implications of this are huge.

Business model. While a regular technology purchase is typically a straight purchase or lease, with cloud computing the business model switches from a capital expense to a subscription model with monthly or annual fees for access (the term Software-as-a-Service, or SaaS, is another term for cloud computing, in case you hadn’t connected the dots).

IT implications. As a user organization, with the cloud business model, you will have very little use for software or hardware purchases, IT staff for technology rollout, management, and maintenance, and general IT know-how about the new technologies your organization will use. All you need is an internet connection to use the technologies you’ve subscribed to.

Accessibility. The cloud-based systems can be accessible through PCs, but also on less robust notebooks, and even handheld devices such as smart-phones because the requirement for computing power moves from the user’s location to the “cloud”. The downside of accessibility is that if your internet connection is weak or cut off, you can’t access the technologies you’ve subscribed to.

Security. The biggest pushback against cloud computing is data security both at transmission time, and for storage. While this is a valid concern, the security aspect of cloud computing has improved significantly over the past couple of years and will continue to improve as the business model gains further traction.

Opacity and control. While you won’t have a need to purchase or manage technologies, as a user, your organization will also give up control of how these technologies are managed, where the storage devices reside, or what type of hardware is used to run these technologies. You’re not the technology owner, you’re the subscriber.

Elasticity. Cloud-based applications are, by definition, scalable. Whether your organization has 100 employees or 3000 employees, the subscription based model should be able to handle the company size and any changes in the number of staff using the system. Also, technology upgrades and updates are scalable across the entire user base without the need for a desktop-by-desktop rollout.

You might hear about “managed cloud computing” or “hybrid cloud computing”. Managed cloud computing is when all the technology is based in-house but available to the individual users within the company intranet. This is really the old centralized computing model before PCs became powerful and ubiquitous. Hybrid cloud computing means parts of the technology runs in the clouds, and other parts run in-house.

If it sounds like I’m a big fan of cloud computing, it’s because I am. As a user, I would love to move the headaches of technology purchase and maintenance to experts and become a subscriber. As a technology enthusiast (and I’m not one of those early adopter types), I see the wave coming, and it’s real. And as a business strategist, I see that companies have better things to do with their IT staff than have them spend 80% of their time on technology maintenance., a company with revenues exceeding $1.3B, is the poster child for cloud computing, and offers its software exclusively through subscriptions. Microsoft claims it will make its entire Office suite available in the clouds. Google is providing a myriad of free and paid services – all in the clouds. And you will see more and more major technology vendors either supporting cloud computing or switching their business models to cloud computing.

Of course caution shouldn’t be thrown into the wind using cloud-based services. Security IS a major concern. The viability of the company you’ll use to provide the services is also another major concern (what if they fold in a few months?). And customer service is another area to consider. But cloud computing is here to stay, and you’ll be hearing more about it in time (including from me).

Let me know if your organization is already using any cloud computing services and what is your experience with it.


  1. Nice post simple as A,B,C. To mem i see it as an emerging market i.e. been a cloud platform service provider.

    Thanks kata

  2. Excellent post, Kat. In fact, outstanding!

    Thank you.