Although there are concerns regarding standards, privacy and security, the benefits of cloud computing are propelling its development and implementation, and it is poised to become a major architectural shift in the industry of information technology.
To understand cloud computing, we must first define it. The term “cloud” came from the original topology diagrams of networks where the internet was illustrated as a cloud. The cloud represented that empty space in between hardware connections and an internet service provider. In the diagram below, all of the peripherals are hard wired except the remote client, which is connected to the cloud. Cloud computing has the potential to eliminate most, if not all, of the peripherals in the above diagram, except the workstations, wireless devices, and possibly the scanner and printer.
In a recent interview with Eric Schmidt, CEO of Google, he defined cloud computing as follows: “With this new architecture you're always online; every device can see every application; and the applications are stored in the cloud.”(Wired.com, 2007) The cloud has also been defined as on-demand network access to networks, servers, storage, applications, and services. Although the concept of the cloud has been around for years, development was hindered by several factors: (1) the old model for marketing software, (2) computer processing speed, (3) limited bandwidth links, and (4) the high cost of data storage. But within the past five years, the cost of data storage has reduced significantly, and processing speeds and bandwidth are improving exponentially every year. (Kurzweil, 2007) In addition, as technology resistant baby boomers retire, and younger more techno-savvy consumers enter the work force, the demand for corporate IT departments to provide applications and data accessible on devices such as iPhones and iPads is becoming a growing trend. (Costello, 2011)
Types of Clouds The ultimate vision for cloud computing is the ability to access applications and files through any device with internet access. This broad concept has spawned several business opportunities within the cloud computing industry:
“[I]nfrastructure as a service (IaaS) focuses on hardware and IT infrastructure management, platform as a service (PaaS) concentrates on middleware and design tools as a service, software as a service (SaaS) deals with traditional software applications such as customer relationship management or social networking as a service, and business process as a service (also known as the business cloud).”
Slowly, cloud-based computing has integrated into many of our day-to-day activities. In fact, many people are unaware they are utilizing cloud-based applications such as Facebook and Twitter, or Google Docs, the web-based productivity suite similar to Microsoft Office. The business community has vigorously supported SalesForce.com, the leading public cloud-based customer relationship management application. The U.S. Government recently awarded Salesforce.com’s services with a “GSA moderate level Authority to operate,” allowing organizations within the federal government to safely enter the arena of cloud computing without the costly expense of hardware and software.
The Marketing Model of Cloud-Based Services
Cloud computing has also changed the marketing model for software. Previously, enterprise software was multi-million dollar transactions that took months to negotiate, and only available to large enterprises. Today, the cloud-based model offers software/applications for free or for a minimal monthly subscription fee, while a significant portion of the earnings are generated by internet display ads. Consequently, cloud computing services have experienced a steady growth. According to the research firm Gartner, global sales of cloud services totaled $68.3 billion in 2010, a 17 percent increase from $58.6 billion in 2009; and half of these earnings were