"Cloud computing" has always been a term that has caused people to scratch their heads, both outside and within the information technology community. Debates about what the Cloud is and is not have characterized the subject since it first was popularized in 2006 by Amazon's Elastic Compute Cloud.[1]
Lately, there are more professionals who understand that cloud computing is a type of on-demand, Internet-based computing leveraging economies of scale through shared service models.
Common Characteristics of the Cloud As-a-Service
Cloud solutions share a particular set of attributes that differentiate them from basic web or network services. These particular characteristics are what make Cloud Computing an advantage in business information technology:
Outsourced - Managed at some level by the Cloud solution provider, rather than the customer.
Internet-based - Not located on the customer premises.
Scalable - Able to be quickly and arbitrarily adjusted to meet demand.
Multi-tenant - The provider hosts multiple clients on the same platform.
Consumption-based - Billing is on the utility model, with clients charged only for actual services utilized.[2]
Why the Cloud has become the service of choice
In the past, businesses had to set up and manage IT infrastructure sufficient to meet their peak demands. Consequently, they paid the full capital and overhead costs even while service capacity remained idle most of the time--a significant waste of time and money.
With outsourced, multi-tenant services, third-party providers take on the task of setting up and managing most of the hardware and software required. The ultimate expense--in terms of hardware, software, and staffing--is amortized across hundreds or even thousands of customers, each consuming only as much of the resources as are required at a given time. They are charged only for what is used and can quickly scale it up or down as their demand requires.
This combination allows businesses to operate with more agility and efficiency. And, indeed, most businesses today have adopted some form of cloud computing service as a solution to their IT requirements, often without business leaders even fully realizing it.
Companies using Microsoft's Office365 or Google's Gmail platform for their email hosting, for example, are using a Cloud computing service. Office365 and other commonly used file hosting and sharing services are all Cloud-based.
Due to the economies of scale involved, the service providers are generally able to deliver much better services at significantly lower costs than those businesses could reasonably achieve in-house. They can afford to hire the best staff, build out data centers to accommodate the heaviest demand, and buy the best and fastest hardware.
By having these mundane, but necessary, steps taken off their plate, businesses can focus instead on their core competency, delivering their own valuable services without the distraction of diving deeply into the plumbing. Just as few companies today worry about generating their own electricity or digging their own wells, businesses are learning that they do not need to deal with the aspects of information technology that have become commodities.[3]
The elasticity of these solutions provides significant advantages to businesses in terms of risk management. A company seeking to roll out a new product line or service with heavy technology demands might pause when considering the unrecoverable capital expenses that serves as a barrier to entry with traditional IT build out processes. But deploying the same product on a metered Cloud-based platform reduces the startup costs substantially, lowering the risk of agility as well as significantly spends up your time to market (TTM).
The degree of investment is also reduced when the platform can be arbitrarily scaled to meet demand. A bare minimum of Cloud-based services can be purchased to meet startup requirements and then rapidly increased if the product finds great demand. Previously, businesses were forced to develop more precise sales estimates to justify their investments, and a heavy price was paid if those estimates were too far off in either direction.
Businesses using Cloud platforms can respond to market demands more rapidly and with more assurance than if they were using traditional IT infrastructure systems.
To sum up, cloud computing is now being a big differentiator for most industries. If you want to a competitive edge, finding the right cloud computing model is the next step. CRA has created this white paper with all the ‘Ins & Out of the Cloud Computing Stack’ where you can learn about four different As-a-Service models of the Cloud and how each one will impact your business for the best.
[1] (Mohamed, Arif. "A History of Cloud Computing." ComputerWeekly. TechTarget, Mar. 2009. Web. 23 Sept. 2016.)
[2] (Mueller, Ernest. "What Is Cloud Computing?" The Agile Admin. N.p., 13 Sept. 2011. Web. 23 Sept. 2016.)
[3] (Borwick, John. "Commodity vs. Differentiated IT Services." HEIT Management. N.p., 26 Sept. 2013. Web. 23 Sept. 2016.)
