Technology buzzwords that depict recent innovations and popular trends are often misunderstood and/or misrepresented, which can hinder a general understanding of how the new technology could potentially enhance businesses.
Cloud computing is one of the latest buzzwords that falls into this category. What exactly is cloud computing? How can it help meet business needs? Are businesses ready to adopt this new paradigm?
A quick Google search on this buzzword resulted in over 47 million hits. Intimidating, to say the least. A typical business owner or executive may find it difficult to comprehend cloud computing and how it can help their business.
A basic understanding of cloud computing and the potential impact for businesses is a good place to start. Education is key, and trusted IT advisors can help business owners and executives sort through the confusion and determine if it is right for their business.
In simple terms, cloud computing is Internet-based computing, where access to servers, applications and storage is available for pay-as-you-go services. It doesn't matter where the devices or software services are located in the cloud, only that businesses can access, manage and share the information on a secure basis.
Cloud computing is an umbrella term that includes hardware hosting, software hosting and services, storage services, spam filtering, application development services, web services and other elements. These services are available on a utility or subscription basis.
Software-as-a-Service (SaaS), a component of cloud computing, is a business software application that is delivered from a provider to the desktop browser via the Internet for a fee. Salesforce.com is a popular Customer Resource Management (CRM) application that is considered a SaaS.
Google Gmail is another example of SaaS. Businesses can use Gmail with their domain name through the Internet on a per-user fee, and requires minimal management and administration.
Many SaaS vendors are emerging to meet business demands, including Accounting/Finance, operations and ERP applications. SaaS vendors offer specialized vertical market solutions that offer businesses a complete suite of applications to run the business.
The strategic decision to move to this new IT delivery strategy should include a business justification and cost analysis. Potential options should be well understood, discussed and analyzed when developing an IT Strategy to meet business goals, and included if it makes sense for the business.
Business drivers to consider during an evaluation to move to cloud computing may include:
• Large mobile workforce
• Rapidly expanding business
• Limited IT resources with increased business needs
• Total cost of ownership.
Cloud computing is a transition from capital intensive investments to operational-based IT expenditures, and offers an attractive option for businesses. Instead of purchasing, implementing, managing and supporting servers and business applications, cloud computing allows businesses to pay-as-you-go with minimal initial investment.
Cloud computing is a means to efficiently deliver IT services to the business and can provide many benefits:
• Reduced IT costs - capital and operational resource requirements
• Increased reliability - high availability with Service Level Agreements
• Increased agility - scalable and flexible to meet changing business requirements
• Increased mobility - applications are available anywhere through the Internet.
On the downside, there are some concerns with cloud computing. Security and privacy are at the top of this list, as some businesses are apprehensive about storing critical business information outside of the data center. Standards are virtually nonexistent, and vary with each provider.
With all the buzz about this new paradigm, one would think many businesses are quickly jumping on the bandwagon. However, a Gartner analyst predicted only about 20 percent of businesses will migrate to the cloud by 2012, and concluded it may take 10 - 15 years for most businesses to make the transition.
A recent study by Microsoft Corporation revealed that many Small and Medium-sized Businesses are finding that cloud computing is a cost-effective means to access Enterprise-class applications to run the business. The report indicated that benefits included low cost entry, reduced IT management and support, increased business value and competitiveness.
Cloud computing is still in its infancy, but gaining popularity. Businesses should perform the appropriate due diligence to determine if this IT delivery strategy is right for them. Perhaps it is time for your business to reach for the cloud.