Whether you are an executive of a global enterprise or a business owner with a small IT team of at least 2 people, the pressure is on. Your organization needs to cut costs and boost service levels. You want to be a champion for your team -- to be a leader in maximizing rewards and minimizing risks.
To do so, you must be thoughtful about focusing your internal resources on core competencies - the key drivers that most greatly differentiate your organization from others in your industry. And, you must be honest about when and where it makes sense to apply leverage using outside resources and/or new technologies or processes to give your organization the greatest advantages - the best foundation for supporting your core competencies.
Once you accept this mission, how do you execute it successfully?
The following brief presumes you have already identified suspect activities that merit further scrutiny regarding considering internal and/or external service providers. After this shortlist is identified, it is time to consider alternatives for the scope of services that you may want from service providers.
Preparing services scope alternatives
The extent of services and their comprising activities that are to be included in providers' proposals are called the scope of work, or scope. Consider that there are many alternatives, ranging from all-encompassing holistic scope down to scope which is highly sub-divided into key activities and/or augmentations. Key variables to consider are:
o Who is Responsible? Which provider has primary, secondary and/or tertiary responsibilities for each activity, depending on the degree of contribution and/or impact of their actions?
o Support Frequencies? How often will services be required? For example: One-time, Periodic (Weekly, Monthly, Quarterly, Annually), and/or Stream (on-going)
o Where Operated? At which site(s) will services be provided? Internal Site(s); Vendor Site(s); 3rd party Site(s)
o Key Service Levels? What are the key performance and/or timeliness metrics that will govern the services? Are remedies (including penalties) expected if actual results fall below agreed levels? Are incentives available for over-achieving targets? Remember to keep a good balance -- as few and as simple metrics as possible to allow assuring performance and enabling flexibility.
o Burdened adders? External service providers must effectively include costs in their proposals that may have been missed by internal service providers in their proposals. Due to such oversights, significant benefits have been lost in leveraging external resources. For successful comparisons, you must look beyond only employee salaries.
Be complete in considering all burdened cost adders that will impact your organization, such as: overtime, benefits, management, training, support, facilities, furniture, computers, communications, administration, corporate allocations and other important operating and/or capital costs. Consider where to 'move' burdens when thinking about services scope alternatives, to place these to maximize your organization's advantages.
Read more..
Wednesday, September 29, 2010
Monday, September 27, 2010
The Pros & Cons of Cloud Computing, and is it Secure?
Remember, our simplified definition of cloud computing consists of shared computing resources that are virtualized and accessed as a service through an APL.
The Pros
1- Costs/capital expenditures
If cloud computing is right for your company, then major cost savings can be seen in buying and maintaining the needed infrastructure, support equipment, and communication costs. The vendors and/or service provider, who charge the users a utility or user type fee, own these costs.
2- Scalability
One of IT's biggest problem is the constant need to add more equipment to keep up with the growing demand of accessing, storing and analyzing information by both internal and external users. One example is in the data center where adding servers is a major cost issue (actually power for the data center is the number one issue, but it is related to the growing need for items like servers). Since cloud computing is virtual, one can expand or contract equipment/infrastructure as demands change.
3- Start - up
Since the cloud (theoretically) contains the infrastructure and applications, all one just needs to do is "dial" in to the cloud. One can start using applications immediately versus a customary installation, testing and then providing access to the appropriate user community. (Training is assumed to a constant.)
4- Business Applications
Again, the cloud (actually the vendors and/or service providers) through contracts (Service Level Agreements -SLAs) provides numerous business applications for any user who is their client. Again like scale, enterprises only need to know which applications they need to run their business and understand what is actually provided to have access to various business applications. (Training is assumed to be a constant.)
5- Flexibility
Since cloud computing is a virtual offering, a user has the flexibility to choose, on a regular basis, the applications, amount of bandwidth or the number of users by basically modifying his user contract and increasing or decreasing costs at a known rate or factor.
The Cons
1-SLA Agreements
This is the tricky and most important one. SLAs can be very involved and it really leaves the onus on the user to understand and define all requirements in specific detail, and more importantly understand what one is getting in the terms of support, performance, security, etc. A good example is quality of service; one should understand what is offered and what the recourses are if the specified quality is not maintained.
2-Performance
Performance guarantees are usually part of the SLA document, but I have singled this one out because it is critical to maintain the performance (uptime) one needs both for internal AND external users. Understand if the performance guarantee is defined as an average or just during peak times versus a "uniform" performance. If performance is compromised, it can impact many things including revenue and your company's goodwill.
3-Vendors
Not all vendors are created equally! Many vendors are claiming to provide cloud computing, but in reality, they are just providing a specific service, or a specific application or worst they are a middleman and provide no value-add at all. As I sated in my previous posting, one needs to understand the difference between cloud computing and hosted services or managed services or seemingly some form of virtualization. My best advice is to definitely get with reference customers and see if they model what you would like from the cloud.
4-Security
We all know that the internet has some security issues and since the cloud utilizes the internet coupled with applications infrastructure and support, users should be aware of the potential for new threats and increased risk exposure. It is important to include your firm's risk tolerance in any decision to move to cloud computing, as not all the security issues are understood, and new ones will arise.
5-IT Staffing
If one does utilize the cloud, then make sure one understands the vendor staffing that is available to support your needs and hundreds of others using their cloud. A number of vendors out-source staffing and some of the personnel may not be as good as your own internal organization. Ask the potential service provider if they have trained personnel to support the applications you request.
Read more..
The Pros
1- Costs/capital expenditures
If cloud computing is right for your company, then major cost savings can be seen in buying and maintaining the needed infrastructure, support equipment, and communication costs. The vendors and/or service provider, who charge the users a utility or user type fee, own these costs.
2- Scalability
One of IT's biggest problem is the constant need to add more equipment to keep up with the growing demand of accessing, storing and analyzing information by both internal and external users. One example is in the data center where adding servers is a major cost issue (actually power for the data center is the number one issue, but it is related to the growing need for items like servers). Since cloud computing is virtual, one can expand or contract equipment/infrastructure as demands change.
3- Start - up
Since the cloud (theoretically) contains the infrastructure and applications, all one just needs to do is "dial" in to the cloud. One can start using applications immediately versus a customary installation, testing and then providing access to the appropriate user community. (Training is assumed to a constant.)
4- Business Applications
Again, the cloud (actually the vendors and/or service providers) through contracts (Service Level Agreements -SLAs) provides numerous business applications for any user who is their client. Again like scale, enterprises only need to know which applications they need to run their business and understand what is actually provided to have access to various business applications. (Training is assumed to be a constant.)
5- Flexibility
Since cloud computing is a virtual offering, a user has the flexibility to choose, on a regular basis, the applications, amount of bandwidth or the number of users by basically modifying his user contract and increasing or decreasing costs at a known rate or factor.
The Cons
1-SLA Agreements
This is the tricky and most important one. SLAs can be very involved and it really leaves the onus on the user to understand and define all requirements in specific detail, and more importantly understand what one is getting in the terms of support, performance, security, etc. A good example is quality of service; one should understand what is offered and what the recourses are if the specified quality is not maintained.
2-Performance
Performance guarantees are usually part of the SLA document, but I have singled this one out because it is critical to maintain the performance (uptime) one needs both for internal AND external users. Understand if the performance guarantee is defined as an average or just during peak times versus a "uniform" performance. If performance is compromised, it can impact many things including revenue and your company's goodwill.
3-Vendors
Not all vendors are created equally! Many vendors are claiming to provide cloud computing, but in reality, they are just providing a specific service, or a specific application or worst they are a middleman and provide no value-add at all. As I sated in my previous posting, one needs to understand the difference between cloud computing and hosted services or managed services or seemingly some form of virtualization. My best advice is to definitely get with reference customers and see if they model what you would like from the cloud.
4-Security
We all know that the internet has some security issues and since the cloud utilizes the internet coupled with applications infrastructure and support, users should be aware of the potential for new threats and increased risk exposure. It is important to include your firm's risk tolerance in any decision to move to cloud computing, as not all the security issues are understood, and new ones will arise.
5-IT Staffing
If one does utilize the cloud, then make sure one understands the vendor staffing that is available to support your needs and hundreds of others using their cloud. A number of vendors out-source staffing and some of the personnel may not be as good as your own internal organization. Ask the potential service provider if they have trained personnel to support the applications you request.
Read more..
Saturday, September 25, 2010
How Do Vendors Charge For Cloud Services?
According to cloud computing advice the reports vary on the exact level of demand for cloud computing by businesses and enterprises, it is quite evident that there is a reasonably broad general interest if the features and costs are right and the risks involved are acceptable to the business or individual.
Many organizations find the low cost set up costs for cloud computing a very attractive package. Cloud computing services save you the money which would otherwise be spent upon buying software and applications and also the expenses that go with their implementation and management.
Vendors charge the users for cloud computing services. Different service providers have different rates for different services. Normally, the money is paid on monthly basis. Some however, charge weekly or daily basis.
Most vendors make long term commitments with their customers especially business owners. This is done by offering users discounts and good price packages. You are then required to pre-pay for your cloud computing service in order to get the best of price options. If you pay in advance, you will get some great packages but it would bind you to one particular service provider.
You will indefinitely find yourself stuck with that vendor even if you are dissatisfied with the services you are paying for. However, many vendors now provide guarantees or warranties to the users to ensure service availability and the ongoing existence of the service.
Some service providers now offer cloud services in which you just pay for what you actually use. This means you would be charged for exactly the time you spend for your computing consumption within the cloud and for the space you occupy on a cloud storage system. You do not need to buy packages. You use what you need and you pay the vendors for what you actually are using, as you would for a utility such as electricity.
It is to be noted, that the majority of current cloud computing advice that no single vendor offers specialized service that many users are willing to pay for. Usually vendors provide the same services for all their users and they charge them for whatever service they use accordingly. No enterprise or organization so far has been successful in buying specialized services from vendors. This is also a reason why so few large enterprises have not not made the shift to the public cloud. They make their own clouds, often referred to as private clouds if they need specialized services.
Amazon is at present the lowest cost cloud computing option overall especially for production applications that require more than 6.5 hours of CPU per day. The current pricing advantage of Amazon is utterly due to its reserved instances model. Also, it is the service provider with the most experience right now and this makes it the one to beat with low prices and maturity. For their S3 service, there is even no minimum fee required. The Amazon vendors charge you only for what you use.
On the other hand, Microsoft offers their pay-as-you-go Windows based Azure cloud computing service. Microsoft also offers companies the option to pay per use "consumption" pricing plan or a "commitment" option whereby, the companies can get discounts for a six month commitment. Microsoft also provide special calculators to help potential customers estimate their costs and compare programs with other services and vendors. Microsoft declares that it will make a healthy return on the new cloud services since the company will acquire higher percentage of IT spending on larger targeted accounts.
Read more..
Many organizations find the low cost set up costs for cloud computing a very attractive package. Cloud computing services save you the money which would otherwise be spent upon buying software and applications and also the expenses that go with their implementation and management.
Vendors charge the users for cloud computing services. Different service providers have different rates for different services. Normally, the money is paid on monthly basis. Some however, charge weekly or daily basis.
Most vendors make long term commitments with their customers especially business owners. This is done by offering users discounts and good price packages. You are then required to pre-pay for your cloud computing service in order to get the best of price options. If you pay in advance, you will get some great packages but it would bind you to one particular service provider.
You will indefinitely find yourself stuck with that vendor even if you are dissatisfied with the services you are paying for. However, many vendors now provide guarantees or warranties to the users to ensure service availability and the ongoing existence of the service.
Some service providers now offer cloud services in which you just pay for what you actually use. This means you would be charged for exactly the time you spend for your computing consumption within the cloud and for the space you occupy on a cloud storage system. You do not need to buy packages. You use what you need and you pay the vendors for what you actually are using, as you would for a utility such as electricity.
It is to be noted, that the majority of current cloud computing advice that no single vendor offers specialized service that many users are willing to pay for. Usually vendors provide the same services for all their users and they charge them for whatever service they use accordingly. No enterprise or organization so far has been successful in buying specialized services from vendors. This is also a reason why so few large enterprises have not not made the shift to the public cloud. They make their own clouds, often referred to as private clouds if they need specialized services.
Amazon is at present the lowest cost cloud computing option overall especially for production applications that require more than 6.5 hours of CPU per day. The current pricing advantage of Amazon is utterly due to its reserved instances model. Also, it is the service provider with the most experience right now and this makes it the one to beat with low prices and maturity. For their S3 service, there is even no minimum fee required. The Amazon vendors charge you only for what you use.
On the other hand, Microsoft offers their pay-as-you-go Windows based Azure cloud computing service. Microsoft also offers companies the option to pay per use "consumption" pricing plan or a "commitment" option whereby, the companies can get discounts for a six month commitment. Microsoft also provide special calculators to help potential customers estimate their costs and compare programs with other services and vendors. Microsoft declares that it will make a healthy return on the new cloud services since the company will acquire higher percentage of IT spending on larger targeted accounts.
Read more..
Thursday, September 16, 2010
What is Cloud Computing? 10 Defining Points
This seems like an odd question to ask since you probably already have some concept of "the cloud." However, given some of the conversations I have been having recently, I think there's a good deal of cloudy thinking about cloud computing.
So here is the gist of what the cloud is (imho) summed up for you in a set of bullet points:
So here is the gist of what the cloud is (imho) summed up for you in a set of bullet points:
- "Cloud Computing" is currently a marketing term. And that's why I'm writing this; to divorce the use of Cloud Computing, the marketing term, from the use of Cloud Computing as an architectural idea. Marketing terms don't have to conform to precise definition. They get used, then abused, then severely exploited and finally, as their bandwagon grinds to a halt, they get pitched onto the sorry stack of broken buzz words. That's what happened to "eBusiness", "Web Services", "On Demand" and so on. Until the recession began in earnest Cloud Computing was a reasonably sane marketing term. That's now changing because, in the minds of the IT audience, the cost of cloud computing is lower. That makes cloud the hype-word du jour.
- Cloud Computing is NOT SaaS (Software As A Service). I'm making this point because some commentators have been equating these two ideas as if they were identical. SaaS is healthy terminology. SaaS is out-hosted software that you can access directly. Although you might not think of it as such, your electronic banking capability is SaaS - you just don't pay for it directly. As such electronic banking is no different to Zoho or Google Apps. However, electronic banking is definitely not Cloud Computing, no matter how much you stretch the definition.
- Cloud Computing Is Not About Emulating Google It looks suspiciously like the initial enthusiasm for cloud computing as a technology strategy was prompted by Google envy. Google was doing something unprecedented in building huge data centers to support its business. It was clearly a fact that Google's operation was highly efficient and some CIOs mused about whether they could emulate Google. Actually there was no chance, because Google's business was defined by just two uncommon transactions: searching the web and placing adverts. Google designed a huge massively parallel operation using computer servers and switches they built themselves within an architecture that was optimized for precisely that workload. You can't emulate that unless, like some social networking sites, you have a small variety but very large numbers of transactions. As you might expect, some social networking sites have emulated Google.
- Cloud Computing Is About Technology Stacks Cloud computing is about technology stacks in the same way that the ISP business is about technology stacks. In general ISP deliver a consistent service to the myriads of web sites they host by employing a standard technology stack, most commonly, the LAMP (Linux Apache, MySQL, PHP) stack. This means that management effort is minimal because everyone is running the same application (a web site) with the same technolgy (LAMP) and, where customers do have problems, they will normally be the same issues cropping up time and again.
- Cloud Computing Is About Economies of Scale The only thing that everyone seems to agree upon about Cloud Computing is that it is constructed for scale and that it is hosted on a set of resources that are distinct from the typical IT network. In other words within "the cloud" there is an architectural attempt to build for scale. Most cloud offerings are going to be based upon scalability. The truth is that if you plan to have a very large data center and you organize its use so that most of the workloads are very similar, or better, identical, then you will achieve significant economies of scale. You will then be able to offer the service at prices that undercut the customer's costs of running the application in-house. The more customers you achieve the better the cost advantage.
- Cloud Computing Is Not Outsourcing The typical corporate data center is not a cloud and will never become one. Its workloads are mixed the platforms they run on are mixed - the whole technology stack is mixed. That means you cannot transform the whole data center into a cloud operation. However, you can outsource it.
- Are There Any Clouds Computing Standards? Not really, or perhaps better to say "not yet." In general cloud computing infrastructure is built on servers that employ virtualization technology to deliver efficient resource utilization and typically, abide by open standards and, for the sake of economy, use open source software extensively. There is an organization formed by a group of universities, called the Open Cloud Consortium (OCC), which is promoting open frameworks that will let clouds operated by different organizations work together seamlessly.
- Is there Such A Thing As An Internal Cloud? Again, not really, or perhaps better said "not yet." There is sense in organizations creating "domains" within their own networks that are built on cloud-type architectures, especially if they have applications that may need to scale over time. If cloud standards existed then such domains could be thought of as Internal Clouds. They would become staging areas for possibly moving internal applications into the cloud, or if the organization has its own software that it intends to offer as a service, then such a domain could become the platform for providing that service.
- Is Cloud Computing Anything To Do With Web 2.0? No nothing at all. But you can make the connection if you want to. Many web sites that are said to be Web 2.0, primarily because they are social networking sites, have had to scale up dramatically when their user population shot into the millions. Because of that they have had to adopt highly scalable architectures (or die). Because they have such architectures they may be in a good position to offer some services to users in the manner of cloud computing.
- Do Clouds Offer Guaranteed Service Levels? The answer to this is "yes" or at least it should be, and in the future it surely will be. We have to exclude free services, like Yahoo Mail and many of Google's services, which can be described as Cloud Computing from most perspectives, because a free service is never going to offer guarantees (even if it makes an excellent living from adverts.) But Cloud Computing will ultimately be defined, from the user's perspective, by service levels and the nature of the service itself. If Cloud Computing Services are well defined in that way, then it becomes possible to compare such services with the cost of providing a similar capability from your own data center - as long as the Cloud Computing provider is transparent in providing details of the technology that it deploys.
Monday, September 13, 2010
An Explanation of Cloud Computing For the Unenlightened
Another decade, another buzzword. If you are involved in IT it is likely that you will have seen terms like Software-as-a-Service (SaaS), Application Service Provider (ASP) and Utility Computing appear in technology and business media more frequently. Whatever you care to refer to it as they all essentially mean the same thing. In the US it is known as Cloud Computing.
What exactly is Cloud Computing?
The Cloud Computing concept is one based on the outsourcing of computing resources. Rather than purchasing certain hardware or software at relatively high capital expenditure, companies instead rent applications from service providers and access them over the Internet. An alternative to managing traditional IT resources - a host company takes care of the background technicalities and you simply connect to your services through a secure Web-browser, using them whenever needed.
These services are hosted online on secure servers - a network of computers collectively referred to as 'the cloud'. If you have ever had a free MSN Hotmail or Google Mail account you will have used a Cloud Computing service in the form of hosted email.
Nicholas Carr, technology writer and former chief editor of the Harvard Business Review, recently claimed that cloud computing is "a paradigm shift similar to the displacement of electricity generators by electricity grids in the early 20th Century". The idea is that in the future a company's IT infrastructure will be viewed as a utility expense not dissimilar to that of a water or electricity bill. It might seem far fetched, but it is quickly becoming a reality.
What does Cloud Computing mean to the small-medium sized business?
Firstly, a utility based delivery of IT services can have a huge cost advantage for the SME. By avoiding the initial expenditure of hardware and software licences, companies can save money and utilise resources. Their system infrastructure now becomes only an operational expense - since there is no hardware to purchase or maintain.
IT staff no longer need to spend time on maintenance jobs and can set about improving efficiency in other areas of the company. The Cloud model can also help companies avoid return on investment (ROI) risk and uncertainty. Should their cloud service not work for them they can easily cancel their subscription and switch to an alternative provider - avoiding the nightmare of fixed asset failure six months down the line.
This 'pay-as-you-go' model also offers improved scalability. Businesses can allocate more or less funds to their cloud provider depending on how many licenses they need - increasing or decreasing over time. Cloud computing is a great advantage to start-up companies. By avoiding upfront capital expenditure, small firms can get up off the ground and running much quicker. This can be a massive benefit - with no initial cost barrier holding them back they can drastically decrease time to market.
The advantage of location independence is another key benefit of cloud services. Advances in 3G and Wireless Broadband technology have made accessing the Internet on the move easier. Users can connect to their software applications and store data and information instantly over the net. The result is freedom from the office. For companies with multiple users in the field, applications no longer need to be installed directly onto the user's machine making them run more efficiently and securely.
Read more..
What exactly is Cloud Computing?
The Cloud Computing concept is one based on the outsourcing of computing resources. Rather than purchasing certain hardware or software at relatively high capital expenditure, companies instead rent applications from service providers and access them over the Internet. An alternative to managing traditional IT resources - a host company takes care of the background technicalities and you simply connect to your services through a secure Web-browser, using them whenever needed.
These services are hosted online on secure servers - a network of computers collectively referred to as 'the cloud'. If you have ever had a free MSN Hotmail or Google Mail account you will have used a Cloud Computing service in the form of hosted email.
Nicholas Carr, technology writer and former chief editor of the Harvard Business Review, recently claimed that cloud computing is "a paradigm shift similar to the displacement of electricity generators by electricity grids in the early 20th Century". The idea is that in the future a company's IT infrastructure will be viewed as a utility expense not dissimilar to that of a water or electricity bill. It might seem far fetched, but it is quickly becoming a reality.
What does Cloud Computing mean to the small-medium sized business?
Firstly, a utility based delivery of IT services can have a huge cost advantage for the SME. By avoiding the initial expenditure of hardware and software licences, companies can save money and utilise resources. Their system infrastructure now becomes only an operational expense - since there is no hardware to purchase or maintain.
IT staff no longer need to spend time on maintenance jobs and can set about improving efficiency in other areas of the company. The Cloud model can also help companies avoid return on investment (ROI) risk and uncertainty. Should their cloud service not work for them they can easily cancel their subscription and switch to an alternative provider - avoiding the nightmare of fixed asset failure six months down the line.
This 'pay-as-you-go' model also offers improved scalability. Businesses can allocate more or less funds to their cloud provider depending on how many licenses they need - increasing or decreasing over time. Cloud computing is a great advantage to start-up companies. By avoiding upfront capital expenditure, small firms can get up off the ground and running much quicker. This can be a massive benefit - with no initial cost barrier holding them back they can drastically decrease time to market.
The advantage of location independence is another key benefit of cloud services. Advances in 3G and Wireless Broadband technology have made accessing the Internet on the move easier. Users can connect to their software applications and store data and information instantly over the net. The result is freedom from the office. For companies with multiple users in the field, applications no longer need to be installed directly onto the user's machine making them run more efficiently and securely.
Read more..
Thursday, September 2, 2010
Cloud Computing - A Win For Everyone
Cloud Computing is a form of computing in which all applications, information and resources are managed in a virtual environment. The term cloud computing, specifically the use of the word "cloud", it meant to represent the nature and structure of cloud computing. Cloud computing involves virtual hosted environments allowing users to connect to the services being hosted over the internet.
Google Apps is a great example of cloud computing as companies to no longer require the need for installed word processing software, in house email servers, multiple IT personnel and many more cost saving advantages. Google Apps allows companies to access all services including email, website hosting, calendar, document editing/creation and much more directly through a web browser.
The advantage to using Google Apps is increased productivity, security, lower IT costs and data backup. Microsoft has also entered the cloud computing realm by integrating its current software such as Word and outlook with online storage and easy accessibility.
Many hosting companies and even a few internet retailers are beginning to offer cloud hosting services. Rackspace, an internet hosting company, has begun to offer cloud hosting for clients who wish to have personal cloud applications in an environment controlled by them. Amazon.com is also offering cloud hosting services due to its large infrastructure and internet bandwidth capabilities.
Most cloud hosting companies offer easy setup and creation of private cloud hosting with simple user interfaces. Most cloud hosting companies have per usage pricing instead of flat rate pricing. Users simply pay for the amount of processing, bandwidth and storage that they use. This pricing method benefits both cloud hosting companies and end users.
There are three main variations of cloud computing:
A company only pays for what they use from the cloud infrastructure thus eliminating the capital lost due to lack of usage from in house network equipment, bandwidth, etc. As IaaS gains more popularity and more cloud hosting companies emerge, costs can potentially drop even more due to oversupply and increased cloud hosting competition.
PaaS, Platform as a Service, is second to IaaS in terms of popularity and consumer adoption. A small company selling cloud applications and/or cloud services does not have to host the applications but can instead have them hosted elsewhere. Platform as a Service saves the company selling the applications/services as expensive network equipment, bandwidth and the need for additional IT personnel are instead outsourced to a cloud hosting company.
This allows cloud application companies and even small developers the ability to enter the cloud application market without the need for considerable startup capital. PaaS has the potential to overtake IaaS in terms of consumer adoption and overall use.
SaaS, Software as a Service, is the least used cloud hosting service. It is a win-win for both consumers and the software companies. Consumers save money as heavily priced software licenses are no longer necessary due to the fact that consumers are only paying when the software is used. The need to purchase software in bulk is removed and every consumers' software needs are custom suited based on usage.
This is also a win for cloud software companies as it will attract more consumers due to the custom pricing model. Consumers who could not afford the high cost of bulk software licenses will now be able to purchase based directly on their software usage needs. SaaS has the potential to completely revolutionize the software industry and may even curb software piracy.
The customized nature of cloud computing is what makes it such a popular and newly adopted internet technology. It will revolutionize the way that networking and everyday computing is run. It is a great win-win situation for both cloud companies and consumers.
Read more..
Google Apps is a great example of cloud computing as companies to no longer require the need for installed word processing software, in house email servers, multiple IT personnel and many more cost saving advantages. Google Apps allows companies to access all services including email, website hosting, calendar, document editing/creation and much more directly through a web browser.
The advantage to using Google Apps is increased productivity, security, lower IT costs and data backup. Microsoft has also entered the cloud computing realm by integrating its current software such as Word and outlook with online storage and easy accessibility.
Many hosting companies and even a few internet retailers are beginning to offer cloud hosting services. Rackspace, an internet hosting company, has begun to offer cloud hosting for clients who wish to have personal cloud applications in an environment controlled by them. Amazon.com is also offering cloud hosting services due to its large infrastructure and internet bandwidth capabilities.
Most cloud hosting companies offer easy setup and creation of private cloud hosting with simple user interfaces. Most cloud hosting companies have per usage pricing instead of flat rate pricing. Users simply pay for the amount of processing, bandwidth and storage that they use. This pricing method benefits both cloud hosting companies and end users.
There are three main variations of cloud computing:
- IaaS (Infrastructure as a Service): The need for expensive equipment is outsourced. Instead of companies purchasing expensive equipment including servers, hard drives and networking equipment, they would instead be used over the Cloud and hosted by a cloud computing company. The business entity would use the virtual equipment on a cost usage basis.
- PaaS (Platform as a Service): Applications are run off of cloud servers hosted virtually. A small company selling cloud applications to businesses will use PaaS to "host" the sold cloud applications and have them run off of the cloud servers instead of having them run off of in-house servers. The company selling the applications pays for the services based on a processor/bandwidth basis.
- SaaS (Software as a Service): Cloud applications are paid for on a per use basis and not sold in bulk licenses. This allows small companies to purchase a la carte licensing for applications they may use infrequently. Instead of purchasing 15 licenses a company can instead only pay when the software is used and removing the limits on how many machines the software can be installed on.
A company only pays for what they use from the cloud infrastructure thus eliminating the capital lost due to lack of usage from in house network equipment, bandwidth, etc. As IaaS gains more popularity and more cloud hosting companies emerge, costs can potentially drop even more due to oversupply and increased cloud hosting competition.
PaaS, Platform as a Service, is second to IaaS in terms of popularity and consumer adoption. A small company selling cloud applications and/or cloud services does not have to host the applications but can instead have them hosted elsewhere. Platform as a Service saves the company selling the applications/services as expensive network equipment, bandwidth and the need for additional IT personnel are instead outsourced to a cloud hosting company.
This allows cloud application companies and even small developers the ability to enter the cloud application market without the need for considerable startup capital. PaaS has the potential to overtake IaaS in terms of consumer adoption and overall use.
SaaS, Software as a Service, is the least used cloud hosting service. It is a win-win for both consumers and the software companies. Consumers save money as heavily priced software licenses are no longer necessary due to the fact that consumers are only paying when the software is used. The need to purchase software in bulk is removed and every consumers' software needs are custom suited based on usage.
This is also a win for cloud software companies as it will attract more consumers due to the custom pricing model. Consumers who could not afford the high cost of bulk software licenses will now be able to purchase based directly on their software usage needs. SaaS has the potential to completely revolutionize the software industry and may even curb software piracy.
The customized nature of cloud computing is what makes it such a popular and newly adopted internet technology. It will revolutionize the way that networking and everyday computing is run. It is a great win-win situation for both cloud companies and consumers.
Read more..
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