What is Cloud Computing5 min read

Cloud Computing is a term used to describe the way many businesses access their operational systems. A large and growing number of businesses no longer install software on a server in their own building (known as ‘on-premise’). Instead, they choose to subscribe to access the same software over the Internet.

This method of accessing services via the Internet has been in existence for more than a decade now but only really been referenced as ‘Cloud Computing’ in the last couple of years. Other terms include ‘hosted solution’, ‘on-demand’ and ‘software as a service’ (SaaS).

Cloud Computing is an umbrella term used to describe a variety of services, including:

Infrastructure as a Service (IaaS)
IaaS provides business with the opportunity to place their infrastructure, such as servers ‘in the Cloud’. Key vendors such as Amazon EC2 provide a variety of IaaS solutions including co-location, shared and multi-tenancy.

Platform as a Service (PaaS)
PaaS vendors provide access to a development platform that allows products and services to be developed ‘in the Cloud’. Salesforce provides a platform, Force.com that allows third parties to develop applications.

Software as a Service (SaaS)
SaaS is an application or service that is delivered directly over the Internet. Popular examples include the CRM system, Salesforce or Google Apps.

Let’s look more closely at SaaS and how it works.

SaaS solutions are delivered to business via the Internet – as a service. This is radically different from the alternative, on-premise option where a business needs to maintain their own server, software upgrades, etc – and associated human resources to manage everything.

Rather than requiring you to install and maintain software on your computer or network, SaaS solutions provide you access to key business applications ‘in the Cloud’. A key benefit of Cloud Computing is knowing you have access to the most relevant version of the application – at all times.

Five Benefits of Cloud Computing

Cloud Computing is becoming increasingly popular within business, large and small, due to the range of benefits it offers over the traditional method of installing hardware and software on-site. Let’s review some of these key benefits:

Reduced Cost

Cloud services require no hardware or software licensing costs and no expensive integration costs. With no technology to maintain, Total Cost of Ownership (TCO) is up to 10 times less than the traditional on-site appliance model.

Furthermore, as these services are paid for on a ‘per user per month’ basis, they are funded by OpEx rather than CapEx. All costs associated with accessing the service are included in the monthly subscription fee. Therefore, you know exactly how much it will cost to provide each staff member access and have no concerns around unexpected or hidden costs.

Speed of Implementation

The traditional, on-site model typically involved a lengthy implementation process. If a business needed a new database, it first needed to ensure it had the required hardware to support the system. Very often, existing hardware would need to be upgraded or new hardware would need to be installed before being able to achieve the initial objective.

As you simply pay to access the services of a SaaS provider, via the Internet, there is no drawn-out implementation period. More often than not, it’s a case of signing up to the service and it will be switched on. As soon as you have your account activated, you have immediate access.

Reallocating IT Resources

Cloud Computing removes the need for on-site hardware and software, and this means your IT resources no longer need to spend time applying upgrades or managing backups. Instead, their resources can be re-directed to work on revenue-generating, core business issues.

Business Agility

A key requirement for any organisation is to be able to react to market and economic conditions. With traditional, on-site systems, a business must master the art of forecasting. Identifying and providing for potential requirements in capacity growth – should the business be successful. But, what would happen if the business or the wider economy was retracting? The business would be left paying for a system far more powerful than that required.

With SaaS, services are accessed on a monthly subscription, per-user basis. This provides business with the benefit of scalability, allowing the system to grow with your business by simply subscribing additional users to the service. Likewise, it enables you to downscale giving your business greater agility to match market conditions.

Increased Productivity

Business has traditionally held its data within its own premises, installed on servers typically maintained by in-house IT resources. To keep pace with the mobility demands of the business, staff need to be able to access this data from various locations via a range of devices including desktops, laptops and mobile devices. For in-house solutions, this often proves difficult to achieve.

Based ‘in the Cloud’, SaaS solutions provide greater access to business critical information, being accessible anywhere in the world via any device where a connection to the Internet is present. This ‘always on’ access enables business to keep pace with the demands of increasing employee mobility.

Is it just the latest craze?

In a word, No. Business is moving to the cloud every day. Salesforce is leading the way and many traditional on-premise vendors are now working to introduce SaaS products to keep pace. Expect to see far more providers of SaaS offerings and more businesses, in search of better performance at reduced cost, moving their infrastructure to ‘the Cloud’.

Still unsure? Dr Bruce McCabe from KPMG sums it up very nicely…

The Cloud Computing “SaaS” phenomenon is real, accelerating and to be taken seriously.