Cloud computing is Internet-based computing that represents a new model for the supply, consumption and delivery of IT services. It typically involves over-the-Internet provision of dynamically scalable and often virtualized resources. Similar to an electricity grid, resources are shared, and software and other information are available to computers and other devices on demand.

There are other ways to define cloud computing, as well. It can be defined as computing with virtual servers that can be made available to any resource outside the firewall. Outsourcing could be considered another abstraction of cloud computing: the work is done external to the organization, and we’re not always aware of the exact location where the work is performed.

Many people wonder, “Why a cloud?” In telecommunications, the image of a cloud is often used to illustrate the interconnection of voice-based phone calls. The same imagery is now used to represent the interconnection between thousands of computers.

Virtualized and Dynamic

As the use of the Internet increases, which is happening by leaps and bounds, more and more computing and storage resources are needed. These resources can be physically anywhere on Internet, which is the reason cloud computing is called virtualized. You don’t necessarily have to be able to touch the physical units – they could be doing the work somewhere in Timbuktu.

Because any computer or software can participate in the cloud, common business applications are available online and can be accessed from another Web service or software, such as a Web browser. Again, the software and data may be stored on servers, but we don’t have to know their physical location.

These virtualized resources can be added to the network to keep response time acceptable. This expandable network capability makes cloud computing dynamic. Since IT is often short on resources, cloud computing offers a practical solution by extending IT’s existing capabilities.

And since hardware is a major expenditure, as is buying major software licenses, the ability to rent resources or pay-as-you-go with a subscription makes cloud computing more economical than traditional models.

Four Disciplines

Another way to understand cloud computing is to see it as an amalgam of the following four disciplines:

  • Grid computing: This refers to networked computers acting in concert in order to complete large, complex tasks.
  • Client/server computing: Client/server computing refers to any distributed application that distinguishes between service providers (servers) and service requesters (clients).
  • Peer-to-peer computing: This is a form of distributed architecture without central coordination. That means all servers have the same “say.” One server could play the role of a client requesting a job to be done by another server. Once that is done, the roles could be reversed. The server that performed the job becomes a client and requests the previous client to perform a job as a server. Peer-to-peer computing changes the roles of suppliers and consumers as needed by the task at hand.
  • Utility computing: This is a metered computation and storage service, such as electricity. There is a base charge, and after that, the more you use, the more you pay.

Economics of the Cloud

Cloud computing users can reduce capital expenditures on hardware, software and services because they only need to purchase some basic equipment from which to work with the cloud. Consumption is usually billed as a utility service (similar to your electricity provider): the more you use, the more you pay. Alternately, if you pay for a subscription (like you do for cable TV), you are charged a fixed amount per month regardless of how often or how much you use it.

If you are a frequent user of cloud computing, a subscription payment method would be ideal. Otherwise, a pay-per-usage plan is recommended.

As it stands now, IT must use cloud-based computing services separately for each function – such as server computing or software as a service. And, as we all know, when separate pieces are used, it is time-consuming to make them work together, because IT must hire or build resources to accomplish integration. This integration of various pieces is the expensive part of cloud computing. Over time, more and more vendors will develop integrated solutions.

Key Features

The key features of cloud computing from the sample architecture in Figure 2 include the following:

  • Expansion capability: Companies can expand their computing resources without having to make capital expenditures all at one time. And if you use less resources than what you’d have in a data center, cloud computing saves you from having “dead” equipment sitting in your data center that is bound to become obsolete over time.
  • Mobility: Since cloud is Internet based, users can access applications anywhere in the world. This proves particularly beneficial to international organizations and the mobile workforces at local companies.
  • Reliability: The service providers have become increasingly reliable, particularly as they respond to the following issues -
  1. In-memory analytics: Compared with hard drives, distributed data grids perform much more efficiently. This is because memory is shared between different data centers.
  2. Security: As data is distributed over a wider area and/or number of devices, the issue of securing stored sensitive data becomes an increasingly complex concern. Physical security, with literally a physical firewall, was one of the most secure environments for sensitive data. But as data distribution becomes more widely implemented, data security has become more and more vulnerable. And with global implementations of the Internet, data can easily fall prey to hackers.



Once data is accessible on the Internet, you can establish control of who can see it, update it and delete it, but since it is accessible via the Internet, you need a sophisticated security strategy. You have to stay at least 10 steps ahead of the hackers, which means you have to start thinking like a “master” hacker.

Secondly, keep in mind that once you dismantle your infrastructure and move over to a cloud service, it is difficult and prohibitively expensive to go back. As a caution, expand with cloud computing in small, planned increments.

A Variety of Services

Currently, the major cloud service providers are Amazon, Google, Microsoft, Rackspace and Salesforce. Some examples of cloud computing services include the following:

  • Storage as a service: Customers do not have to buy, install or maintain hardware.
  • Software as a service: This service is provided as a single application. Customers don’t have to license or install the software or hardware, so they don’t have to make an investment upfront. For the vendor as well as the customer, maintaining only one application comes at a lower cost.
  • Web services: Vendors provide application programming interfaces, which can be used by customers who don’t have to install and maintain the full-blown applications.
  • Infrastructure as a service: This is a development platform in which everything necessary, such as hardware, software, support and the network, is provided as a service.
  • Testing as a service: Customers don’t have to install all the hardware and software necessary for testing. The vendor may provide hardware and software, as well as personnel for testing software applications developed specifically for the organization.
  • Database as a service: The customer doesn’t have to install and maintain the DBMS for the internal applications developed.
  • Platform as a service: This is the delivery of a computing platform and solution stack as a service. PaaS offerings may include facilities for application design, application development, testing, deployment and hosting as well as application services such as team collaboration, Web service integration and marshalling, database integration, security, scalability, storage, persistence, state management, application versioning, application instrumentation and developer community facilitation. These services may be provisioned as an integrated solution over the Web.

With all these developments – and the economic benefits to be had – it is conceivable that a large number of enterprises will one day each be a node in the cloud. And we will be agreeing with the statement “Who in the world doesn’t want to reach for the clouds?”
Editor's note: This is the fifth in a series of articles by Shaku Atre. Click on the titles to read the other recent articles: "Who in the World Uses Only Words and Numbers in Reports?"; "Who in the World Wants to Stay Locked Up?"; "Who in the World Wouldn’t Want a Collaborative BI Architecture?"; "Who in the World Wants More Data?"; "Who in the World Needs a Data Warehouse?"; "Who in the World Wouldn’t Want to Evaluate BI Products?"; "Who in the World Needs a Hard Drive?"; and "Who in the World Wants to Just Be Structured?"

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