Cloud or Fog?

Cloud computing is a foggy concept these days.  As its popularity grows, many misconceptions arise.  Let's take a look at the fundamental elements defining the cloud.

There are three main categories of cloud services: Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS).  These three types make up cloud computing as we know it today.  There are many degrees within these and many confusions around how best to categorize certain services.  It’s more or less a continuum so it becomes difficult to determine what is truly a “cloud service” and what is foggy smoke and mirrors.

Thankfully, there are key markers across all three categories to provide perspective, which include:

1.    Subscription-based licensing
2.    Accessible from anywhere via the internet
3.    Multi-tenant architecture
4.    On demand (pay for what you use) model

Subscription Licensing: Across all categories, payment for cloud services is handled on a subscription basis, making it incrementally more affordable than traditional licensing or brick and mortar options.  For a SaaS example, consider the Webex Meeting Center.  I can subscribe to use this solution for a reasonable monthly rate, month-to-month as I need it, or reduce the rate by committing to a longer 12-month term.

Accessibility: A key component of cloud computing is that because the service “lives” on the Internet, it is available from anywhere in the world where the Internet is accessible.  Consider Quicken Online, whether I am at home, at work or on the train with my cell phone, I can access accounting information online. 

Multi-Tenant Architecture:  When we all log into Google’s Gmail service, the private space for our messages is automatically partitioned and provisioned for us, so no-one else can see our messages. The same is true for IaaS services, such as renting server space on Amazon's EC2 service.  An application could be on one or several boxes with one or more other applications depending on the demand for storage and bandwidth.  This capacity sharing and provisioning is one of the main benefits of the cloud.

On Demand:  Cloud-based services tend to scale very well and can be ideal for organizations who wish their IT budgets to grow with the demands of doing business.  It’s very similar to a common household utilities model.  When you use a little, you pay a little, and when you use more, you pay more.  SaaS subscriptions are often priced on features needed and a per-user basis, meaning it can scale nicely with staff growth and the needs of the organization.  Same is true with IaaS which scales with the need for space and bandwidth.  For you finance junkies out there, this turns what would normally be CAPEX (or capital expenditure – expenses on physical things) into OPEX (or operating expenditure – expenses on operating your business), a definite advantage to the financial model in many organizations.

Turning capital expenditures into operational expenditures is only one of the key benefits for cloud services.  They are highly scalable, widely available and a great way to outsource the extraneous so that you may focus on your core business.  With new services popping up almost daily, the marketplace for cloud services will soon become both more enriched and better defined.  Go forth and follow the key markers to part the fog and find the services that meet your needs.