What is Cloud Computing?

  • "Cloud computing" is a wonderful marketing term, but it does not do justice to the reality and day-to-day advantages enjoyed by companies that move to the cloud. Cloud computing is not an ethereal cyber-reality located in hyperspace. In effect, cloud computing is what companies do when they store, manage and process data through a network of remote servers hosted on the internet, instead of on their local server (this would be called on premise computing). Cloud computing enables ubiquitous real-time network access to a shared pool of computing resources.
  • Cloud computing and cloud hosting (or "storage") solutions provide users with capabilities to store and process their data in third-party data centers. The advantages to a corporate entity are obvious, as the sharing of resources helps it achieve economies of scale, similar to a utility (like the electric grid) over a network. In addition, businesses that host their data in the cloud are more flexible and can react faster to changes in the economy or in the competitive marketplace, as they're not limited by the size and capabilities of their own servers and IT personnel.
  • Cloud computing ("the cloud") focuses on maximizing the effectiveness of the shared resources. Cloud resources are usually not only shared by multiple users but are also dynamically reallocated per demand. For example, an international business can have a "follow the sun" strategy, where they can serve European users during European business hours with a specific application, and can then reallocate the same resources to serve Latin American users during Latin America's business hours with a different application. This approach maximizes the use of computing power, and this has not only business advantages, but also environmental advantages, since the same power, space, etc. can be used for different functions. There are also multiple financial advantages to the company. For example, with cloud computing, multiple users can access a single server to retrieve and update the data without purchasing licenses for different applications.
  • Another factor that contributes to the financial advantage of "going to the cloud" is that, from an accounting perspective, the corporation moves away from a traditional CAPEX model (buying the hardware and depreciating it over a period of time) to the OPEX model (using a shared cloud infrastructure with pay-as-you-go terms). In addition, the corporation does not need to buy infrastructure for future need years in advance, but can scale up the "cloud" environment as it evolves and grows. This allows for a better allocation of financial resources, which are now untethered and can be used for other ends (for example, for R&D).

By: Moira Tamayo, Calitech™.net