7 Things You Should Know About Cloud Computing and Cloud Services

Here’s a fog-free look at what cloud computing is, and why it’s even more relevant to smaller businesses than to enterprises.

26th January 2009 at 10:01 am

1. What is cloud computing anyway?
There’s a huge number of opinions on this point, but I think the industry analyst IDC has one of the clearest definitions.  IDC says: “Cloud computing is the IT development, deployment and delivery model enabling real-time delivery of products, services and solutions over the Internet.”

In other words, it’s using the resources of the Internet – the huge amounts of processing power and storage space – to host and deliver software applications to users, and to store their data.

2. How is cloud computing different from Software as a Service (SaaS)?
Once again, IDC has a good definition of the differences between the two. It says that cloud computing enables the delivery of cloud services, which includes SaaS.

Or to express it in even simpler terms: cloud computing describes where it happens;  cloud services (which include SaaS) describes what is being delivered to the user.

3. So how does it work?
Instead of purchasing business software applications, having to install them on your own computers (with all the associated upfront costs), and maintain them, applications are hosted on secure servers that you access over the Internet – that is, in the cloud. You use the applications, and input or extract data and files, via your web browser.

This works in the same way as web-based services such as Hotmail, Google Mail and Amazon. These are all methods of storing and accessing data via a web browser, making them classical cloud applications.

4. What cloud applications are available?
There’s a wide range of business applications available – from basic office software (word processing, spreadsheets etc) to sophisticated accounting and financial software, e-commerce, CRM, stock management, and much more. Cloud application families are often grouped together so they can be accessed and used in a single ‘dashboard’ display in your web browser.

5. Isn’t it just for big companies?
One of the key benefits of cloud computing is that it has minimal upfront costs, freeing up capital that would otherwise be swallowed up in buying computer hardware and software. Also, it minimises ongoing maintenance and support costs, as someone else is taking care of all the awkward, costly parts of business computing.

While these savings are important to enterprises, they’re a godsend for smaller businesses that often don’t have dedicated IT resources. This all means that applications that only the big firms could once afford – like CRM, ERP, stock control software – are now in the reach of any company, from a one-person business to a £20M turnover organisation. It puts the big kids’ toys in the hands of all businesses.

6. What’s the cost?
A typical cost for cloud applications is £25 per user, per month, with a small incremental cost for additional modules as required. Users pay for the applications they use, and can add or remove users and functions flexibly, as they need to. You pay for cloud computing services just like you pay for electricity or water – as you use them.

7. What do I need to get started?
You need a computer – which can be either a desktop or portable machine – and a broadband Internet connection, which can be fixed-line or wireless. The computer doesn’t need to be a high-powered, high-specification machine, as the application runs on the Internet, not on the computer. Nor do you need a lot of disk space or storage, as your data is also stored securely in the cloud. With these basics, you’re ready to start with the cloud applications you want to use.

All cloud applications offer password access security as a minimum, and here you should apply the same rules that you would with any sensitive data. Use a complex password that has a combination of upper and lower-case letters, and numbers too. This, together with the far greater resilience that the cloud offers compared with individual PCs or servers, will keep your data safe.

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Dean Miles


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