What is the Cloud?

Cloud computing is a broadly used term and there are many definitions floating around as to what it is.

The cloud is generally meant to represent the internet: the connectivity of and access to information via the world wide web.  In terms of cloud computing for business, it refers to multiple external customers being able to access scalable IT infrastructure as a service using internet technology and paying based usage.

In short, cloud computing means a business can access not only required IT infrastructure–but also support–via the internet.  The days of having to buy and maintain network infrastructure on premise are becoming a thing of the past.

This changes the relationship between vendors and users of IT services, allowing businesses to focus on the strategic advantages of technology without having to worry about implementation, updates, and maintenance.

Utility Service

What is happening in IT today is conceptually similar to utility services like electricity.  Service has become centralized and cost is based on usage. 

In the same way your business can access electricity from a central power plant, you can now access IT from centralized data centers where conductivity and security and maintained, 24×7.

Moving From Capital Cost to Operational Expense

From the SMB budget perspective, cloud computing represents a major change.  Your organization can, for all intents and purposes, rent IT infrastructure rather than buy it.  You simply access and pay for the capacity you require with limited capital investment required.

There are several advantages to consider here.  First, this frees smaller businesses from the cycle of having to purchase new technology in short intervals in order to maintain up-to-date equipment.  The process of tech refresh can become frustrating and expensive, and return on investment (ROI) can hardly be realized before gear needs to be replaced.  When accessing a data center, this is not a concern; hardware and software are updated and maintained through a process separate from each individual consumer (again, like a utility).

In many cases, staffing costs are also changed.  Cloud computing becomes a component of IT Managed Services where infrastructure, user support, and proactive maintenance are all provided with remote technology from a data center.  As a result, IT staff becomes just another part of the combined operational expense.

In the end, cloud computing is another aspect of how the Internet is changing the way people interface with and use technology–the “cloud” can be seen as a metaphor for the world wide web.  It is ubiquitous technology, and the biggest gains will be made by those that best apply IT changes to strategic business goals and leverage new cost structures.

Rather than purchase  IT hardware and license software, businesses can access infrastructure via the internet and pay based on specific needs.  
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