What is Cloud Computing?
Cloud computing is the delivery of IT services online. Traditionally, core services such as authentication, email and file shares have been delivered in-house via a client-server model. A cloud computing model delivers the same services but the physical hosting and support of the infrastructure is provided by a third party.
Although the concept of external providers has been around for more than a decade, a significant uptake has not been possible till recently. This has been primarily due to performance limitations accross wide area networks. But with advances in high speed Internet access around the world the concept of externally hosted business applications is now a viable business option.
Strictly speaking, cloud computing may include any business application that is delivered by infrastructure that is hosted outside of the organizations’ network. The ‘cloud’ being an abstract representation of any externally administered network infrastructure – public or private. But in most cases, the externally administered network is connected to the public Internet and therefore is represented as residing on a cloud in the Internet.
Expenditure
The premise of cloud computing is that shared data center infrastructure can be delivered at lower costs. Instead of the traditional physical infrastructure, virtual private server offerings allow providers to better utilize their compute power and energy consumption.
The major cloud vendors today include the usual suspects: Google, IBM, Microsoft and HP. The major advantages of cloud computing includes cost and reliability. Cost benefits are usually associated with CapEx savings because large sums of capital expenditure are not required in order to implement server infrastructure in order to support applications. Recurrent costs (OpEx), on the other hand, usually increase with ongoing subscription costs to the cloud services.
Service Levels
Many cloud services also offer Service Level Agreements (SLA) that define business critical levels of service such as availability and response times with financial penalties for SLA breaches.
By subscribing to cloud computing, organizations offload a number of associated responsibilities such as in-house infrastructure support expertise. But in doing so increase their reliance on third party networks. This is a risk that is variable depending on the business model of the individual organization.
Security
Security has also been a contentious issue which may be delaying a more widespread adoption. Intellectual property is highly valued and the storage of this property outside of the company network is a great paradigm shift to many organizations. Offshore hosting may also present inconsistencies in legal requirements.
Figure 1. Cloud Computing - Services are offered online
Cloud computing is a relatively new concept that has gained momentum largely as a result of increased Internet speed and reliability. Moving forward, it will be interesting to see whether the bulk of large businesses will ultimately be prepared to adopt this new service model.
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