Cloud Computing: What it Means For Your Business

The Business Software Advisor

You ask the questions, and our resident software guru shares her wisdom.

This week’s question: I’ve been hearing a lot about “cloud computing”. What is it and what does it mean for my business?

A: This year, Gartner estimated that, “by 2012, 80 percent of Fortune 1000 companies will pay for some cloud computing service, and 30 percent of them will pay for cloud computing infrastructure.” Cloud computing is a term that’s being thrown around quite a bit these days and one that’s clearly important to businesses… but what is it?

Cloud computing, according to Wikipedia, is “Internet-based development and use of computer technology.” The idea of a cloud comes from the shape typically used in computer network diagrams and represents the idea of an abstraction concealing the complex infrastructure underneath: in simple terms, the “cloud”, in today’s terms, means the Internet, by which data is transferred.

More specifically, when companies provide IT-related functions as services, users can access these technology-enabled services through the Internet (“in the cloud”). Cloud computing is a virtualization concept; it means a single point of data access for all consumers. In representing technological trends, cloud computing refers to concepts like SaaS (software as a service), DaaS (data as a service), and Web 2.0 technologies. Google Apps is a simple example of cloud computing.

Many customers don’t own an substantial enough infrastructure to host their data, so they utilize Web hosting, they purchase subscription services instead of on-premise solutions, and they pay to outsource data storage. Only a few major companies have the technological resources to host mass amounts of data and can make the kind of massive investment in hardware that doing so requires: Microsoft, Google, and Amazon.com are three examples.

The IT services provided by technology behemoths essentially save user companies from having to make huge investments in IT infrastructure right off the bat. Using services like Amazon’s EC2, smaller businesses can get all the computing power they need, and they can always add servers as they grow to increase their computing muscle.

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