Cloud computing is the delivery of on-demand computing services — from applications to storage and processing power — typically over the internet and on a pay-as-you-go basis.
Simply put, cloud computing is the delivery of computing services—including servers, storage, databases, networking, software, analytics, and intelligence—over the Internet (“the cloud”) to offer faster innovation, flexible resources, and economies of scale. You typically pay only for cloud services you use, helping lower your operating costs, run your infrastructure more efficiently and scale as your business needs change.
History of cloud computing?
Cloud computing as a term has been around since the early 2000s, but the concept of computing-as-a-service has been around for much, much longer — as far back as the 1960s, when computer bureaus would allow companies to rent time on a mainframe, rather than have to buy one themselves.
These ‘time-sharing’ services were largely overtaken by the rise of the PC which made owning a computer much more affordable, and then in turn by the rise of corporate data centers where companies would store vast amounts of data.
But the concept of renting access to computing power has resurfaced again and again — in the application service providers, utility computing, and grid computing of the late 1990s and early 2000s. This was followed by cloud computing, which really took hold with the emergence of software as a service and hyperscale cloud computing providers such as Amazon Web Services.
How Does Cloud Computing Work
Rather than owning their own computing infrastructure or data centers, companies can rent access to anything from applications to storage from a cloud service provider.
One benefit of using cloud computing services is that firms can avoid the upfront cost and complexity of owning and maintaining their own IT infrastructure, and instead simply pay for what they use, when they use it.
In turn, providers of cloud computing services can benefit from significant economies of scale by delivering the same services to a wide range of customers.
What are the cloud computing services that are available?
Cloud computing services in the IT industry are numerous cover, from the basics of storage, networking, and processing power through to natural language processing and artificial intelligence as well as standard office applications. Pretty much any service that doesn’t require you to be physically close to the computer hardware that you are using can now be delivered via the cloud.
Why is it called cloud computing?
A fundamental concept behind cloud computing is that the location of the service, and many of the details such as the hardware or operating system on which it is running, are largely irrelevant to the user. It’s with this in mind that the metaphor of the cloud was borrowed from old telecoms network schematics, in which the public telephone network (and later the internet) was often represented as a cloud to denote that the just didn’t matter — it was just a cloud of stuff. This is an over-simplification of course; for many customers location of their services and data remains a key issue.
Examples of cloud computing?
Cloud computing underpins a vast number of services. That includes consumer services like Gmail or the cloud back-up of the photos on your smartphone, though to the services which allow large enterprises to host all their data and run all of their applications in the cloud. Netflix relies on cloud computing services to run its video streaming service and its other business systems too, and have a number of other organisations.
Cloud computing is becoming the default option for many apps: software vendors are increasingly offering their applications as services over the internet rather than standalone products as they try to switch to a subscription model. However, there is a potential downside to cloud computing, in that it can also introduce new costs and new risks for companies using it.
Companies are experiencing an unprecedented burden on their IT infrastructure as they struggle to meet growing customer expectations for fast, reliable, and secure services. As they try to increase the processing power and storage capabilities of their IT systems, often these companies find that the development and maintenance of a robust, scalable, and secure IT infrastructure is prohibitively expensive.
Luckily, there is another option; instead of acquiring extra hardware, your company can embrace cloud computing. Cloud computing is a rapidly-growing industry which allows companies to move beyond on-premise IT infrastructure and, instead, rely on internet-based services. Cloud-based providers often offer services such as software, storage, and processing at affordable prices. In fact, your company can save up to 30% by implementing a cloud-based solution.
Cloud computing is offered in three different service models which each satisfy a unique set of business requirements. These three models are known as Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS).
Software as a Service offers applications that are accessed over the web and are not managed by your company, but by the software provider. This relieves your organization from the constant pressure of software maintenance, infrastructure management, network security, data availability, and all the other operational issues involved with keeping applications up and running. SaaS billing is typically based on factors such as number of users, usage time, amount of data stored, and number of transactions processed. This service model has the largest market share in cloud computing; according to Gartner, its sales will reach 117 billion USD by the year 2021 Current applications for SaaS include Field Service solutions, system monitoring solutions, schedulers and more.
Platform as a Service is halfway between Infrastructure as a Service (IaaS) and Software as a Service (SaaS). It offers access to a cloud-based environment in which users can build and deliver applications without the need of installing and working with IDEs (Integrated Development Environments, which are often very expensive. Additionally, users can often customize the features they want included with their subscription. According to Gartner, PaaS has the smallest market share of the three service models, with a projected revenue of 27 billion USD by the year 2021. In today’s market, PaaS providers offer applications such as Microsoft Azure (also IaaS), Google App Engine, and Apache Stratos.
Infrastructure as a service offers a standardized way of acquiring computing capabilities on demand and over the web. Such resources include storage facilities, networks, processing power, and virtual private servers. These are charged under a “pay as you go” model where you are billed by factors such as how much storage you use or the amount of processing power you consume over a certain timespan. In this service model, customers do not need to manage infrastructure, it is up to the provider to guarantee the contracted amount of resources and availability. According to Gartner, this service model is forecasted to grow by 35.9% in 2018. IaaS services offered today, include Google Cloud Platform and Amazon EC2.
Cloud computing has been around for quite some time now; however, it will continue to evolve as faster and more reliable networks offer increased benefits to service providers and consumers alike. With these advancements, there are growing opportunities to develop business models in an increasingly-connected economy.
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Benefits Of Cloud Computing
The exact benefits will vary according to the type of cloud service being used but, fundamentally, using cloud services means companies not having to buy or maintain their own computing infrastructure.
No more buying servers, updating applications or operating systems, or decommissioning and disposing of hardware or software when it is out of date, as it is all taken care of by the supplier. For commodity applications, such as email, it can make sense to switch to a cloud provider, rather than rely on in-house skills. A company that specializes in running and securing these services is likely to have better skills and more experienced staff than a small business could afford to hire, so cloud services may be able to deliver a more secure and efficient service to end users.
Using cloud services means companies can move faster on projects and test out concepts without lengthy procurement and big upfront costs, because firms only pay for the resources they consume. This concept of business agility is often mentioned by cloud advocates as a key benefit. The ability to spin up new services without the time and effort associated with traditional IT procurement should mean that is easier to get going with new applications faster. And if a new application turns out to be a wildly popular the elastic nature of the cloud means it is easier to scale it up fast.
For a company with an application that has big peaks in usage, for example that is only used at a particular time of the week or year, it may make financial sense to have it hosted in the cloud, rather than have dedicated hardware and software laying idle for much of the time. Moving to a cloud hosted application for services like email or CRM could remove a burden on internal IT staff, and if such applications don’t generate much competitive advantage, there will be little other impact. Moving to a services model also moves spending from capex to opex, which may be useful for some companies.
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