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In words of Larry Ellison, Oracle’s CEO - ”Computer industry is the only industry which is more fashion driven than women’s fashion”. Do little tweak here and there, valla, it sells like a new big thing in today’s buzzword-prone IT landscape. There’s a whole lot of buzz around Cloud Computing. Commentators talking about Software as a Service (SaaS) have generated loads of hype.

So what does Cloud Computing means?

Cloud Computing represents a different way to architect and remotely manage computing resources. One has only to establish an account with Microsoft or Amazon or Google to begin building and deploying application systems into a cloud. These systems can be, but certainly are not restricted to being, simplistic. These systems can be web applications that require only http services and relational database. There might be need of just web service infrastructure and message queues. Or it could simply be a requirement to interoperate with CRM or e-commerce application services. Additionally, it might require the use of new types of persistent and reliable storage that does not have to be replicated. There could be a need for remote hosting and use of custom or 3rd party software systems. And at times require the capability to programmatically increase or decrease computing resources as a function of business intelligence using virtualization. While not all of these capabilities exist in today’s clouds, nor are all that do exist fully automated, a good portion of them can be provisioned.

 “Cloud Computing” in other words refer to the bigger picture, basically the broad concept of using the internet to allow people to access technology-enabled services. In general, Cloud Computing customers do not own the physical infrastructure, instead avoiding capital expenditure by renting usage from a third-party provider. They consume resources as a service and pay only for resources that they use. Many Cloud Computing offerings employ the utility computing model, which is analogous to how traditional utility services are consumed, whereas others bill on a subscription basis.

Sharing “perishable and intangible” computing power among multiple tenants can improve utilization rates, as servers are not unnecessarily left idle (which can reduce costs significantly while increasing the speed of application development). Other benefits of this time sharing-style approach are shared infrastructure and costs, low management overhead, and immediate access to a broad range of applications. In general, users can terminate the contract at any time (thereby avoiding return on investment risk and uncertainty), and the services are often covered by service level agreements (SLAs) with financial penalties.

A lot of vendors talk about “Cloud Computing” in their marketing materials. In many cases they’re referring to solutions that were called Software-as-a-Service (SaaS), which begs the question – what is the difference between these two terms, anyway? Is Cloud Computing just a renaming of SaaS? Understanding that is much more important than getting caught up in the terms marketers use to try to get customers’ attention. What do you think? Are they the same or different?

Watch out for our next post. We will explore on this subject in the next edition of this series..

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