Cloud computing is a style of computing and can be interpreted as the next step in the evolution of web application management. There are two pieces to this: the actual physical servers and the data that resides on them.

First was the in-house, operations based server room. In this model, a company’s servers were on-site, and one could go and actually touch them if you had the appropriate level of security. The company had ultimate control over the servers and the data. Next came a version of out-sourcing called co-location where the servers still belonged to the company, but they were housed at a hosting company. The hosting company offered 24-7 support, lots of bandwidth and other such desirable features. In this model, the company gave up some control, but the hardware was still their own. The next step came with complete outsourcing where a company trusted a service provider to supply all the hardware. Accordingly, the company gave up another level of control, but you could still go and “touch” your servers if you felt nervous about the applications and data. With the advent of cloud computing, in which the “cloud” itself is the sum of all the hardware, networks, services, storage and the user interface, there is no such accessibility, as the servers the data is stored on could be anywhere. This signifies the final relinquishing of control of the company’s physical boxes.

One barrier to even wider use of cloud computing is that companies still want to retain direct control over the security of their data and are therefore reluctant to take full advantage of cloud computing. Nowhere is this truer than in the Financial Services industry entrusted with a heavy percentage of confidential client information gathered and stored. There needs to be a guaranteed level of both service and security in order for cloud computing to be more globally accepted.

So why use cloud computing? There are specific scenarios where it makes pure business sense to adopt cloud computing. For example, if an organization is new and cannot afford hardware, cloud computing makes perfect sense as it has a relatively cheap entry point, and is fully scalable. The owner of the application does not need to be an IT specialist nor keep IT staff at hand, as maintenance and storage are all handled by the cloud. Another scenario is if the demand for computing power is not predictable, cloud computing allows just-in -time resourcing being able to adapt up or down as the needs arise: this provides solid cost containment.

Although cloud computing has been around for some time now, we are only now beginning to see real changes in business use. It will be interesting to see how this changes businesses’ computing behaviour over the next several years.

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