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In the new world, the biggest buzz word to sell products and services is the ‘cloud’. In the case of cloud computing, everybody has heard of it, but no one knows what it really means. Cloud computing as a concept and service is making inroads into businesses everywhere. This article will serve to help businesses better understand what the term ‘cloud computing’ means and how it can help improve the bottom line of any business. You will begin to understand the non-technical basics and the concept of cloud computing and why services that exist in the cloud can result in better profits for your business.

Defining the Cloud

Let’s begin with a classical definition of Cloud computing. According to Wikipedia, cloud computing is “Internet based development and use of computer technology whereby dynamically scalable virtualized resources are provided as a service over the Internet.” I’ll bet a vast majority of readers didn’t understand it. Now don’t be perturbed by the jargon, just read on. What this definition indicates is that services residing in ‘the cloud’ are based on scalable, on demand architectures that run in remote data centers with the service itself being delivered over an Internet connection. By this definition, pretty much any web site could be considered a cloud computing service. However, when it comes to actual cloud computing, there is so much more that is offered and utilized by customers worldwide. This can be best explained by using another term often used in conjunction with cloud computing: Software as a Service (SaaS). Most people in the business community are more familiar with this term and it might help as a stepping stone to understanding ‘the cloud’. SaaS is a class of software that is available on demand directly from an application service provider. Salesforce.com, a customer relationship management (CRM) application used by many businesses is a well-known SaaS application. Under this popular SaaS model, users can connect to Saleforce.com’s web-based system, buying only enough licenses for their users instead of being “per computer” as is the case with most traditional software business models. Thus the Salesforce.com SaaS runs “in the cloud” because it relies on the overall infrastructure that is called cloud computing. Services like Skype and BitTorrent are often referred to as cloud computing architectures due to their peer-to-peer and scalable natures. These two services are inherently scalable simply because that’s the way the services were created.

How does ‘the Cloud’ work?

Armed with the understanding that the purpose of cloud computing is to deliver software and services to customers, how does it all work? What makes it possible for these services to be delivered to you? There really is no single architecture that defines cloud computing. As mentioned before, Skype and BitTorrent are often considered cloud computing services even though these services are completely decentralized. Salesforce.com on the other hand, relies on servers in data centers in order to operate. As more users are added to the service, they add capacity to handle the increased load. Companies like Amazon, Google and Microsoft continue to build out massive data centers for the sole purpose of providing cloud computing services. So, even SaaS providers need not have a massive data center and can simply rely on the services of one of these cloud computing infrastructure providers. This allows companies to focus on developing the best software possible for their customers instead of tackling hardware infrastructure related issues. And that leaves the end user or the customer to connect to whatever infrastructure is put into place either by the SaaS vendor or by ‘the cloud’ infrastructure provider. The vendor may choose to build their own infrastructure or may choose to partner with a cloud service provider. By sharing infrastructure rather than building infrastructure, cloud computing helps keep overall hardware costs lower.

Benefits of Cloud Computing

Looking at the whole cloud computing gamut, there are a number of benefits to be had when using cloud computing-based services over buying individual software packages and installing them on individual workstations at various locations.

• Lesser Manpower or Human Resource: There is no need to hire IT staff to manage the services that are being delivered to you over the Internet as there is no local application to worry about. You only need a technical wizard on your payroll to help sort out technical issue of minor glitches and fine tuning the application.
• Minimal Resources or Infrastructure: With cloud services one only needs a computer and an Internet connection. Since your data resides in data centers on the Internet, there is no need to setup a local data centre and as for scalability you basically pay for what you use and you have the option of scaling up at a moment’s notice.
• Liberation from Licensing: While this is not always the case, but with cloud computing-based services one often saves money on licensing. The few caveats include a) Vendor reliance where you don’t have to base your entire business on a single primary application vendor. The cloud model allows you to continue running the application while looking for a new vendor. Under the traditional model, one is dependent on the application provider or vendor.
• Data Security: Under a cloud computing model, all of your data, including sensitive customer information is stored on servers in data centers that could be half way across the globe. So one must understand exactly how the data can be accessed by your service provider and carefully review the company’s security practices and history. At the same time, the cloud service providers take greatest pains and most stringent of measures to ensure that your data remains safe, thus your reliance on a third party security solution is also negated.

Conclusion

To conclude, cloud computing is a boon for many organizations and particularly for those without IT infrastructure and staff. SMBs and startups stand to benefit the most as they can choose a solution based on their requirements and scale exponentially if the need arises without much ado. The benefit of cloud computing allows you to focus on the business of your business without investing your energy in complex infrastructure and extensive resources.

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