What is Cloud Computing?

We've developed the Cloud Computing Maturity Model to help determine the overall acceptance of Cloud Computing. Cloud Computing is no longer considered a fad or marketing hype. It's here to stay. What stage is your company? We at Cloud Commerce firmly believe that Cloud Computing will soon be the standard for how small and mid-sized company use business technology.

The illustration above shows how companies evolve towards full adoption of Cloud Computing as a strategic advantage. To find out more, please visit our CLOUDNow Services area to see how we can help your company move towards Stage 5.

Before we explain Cloud Computing, lets first review how IT solutions are typically delivered to businesses. Today, there are basically 3 different approaches to providing computing services for business.  We call this the 3 Stages of Computing. The sections below highlights the 3 stages and  we will then compare the benefits and disadvantages of each.

STAGE 1: Traditional On-Premises IT

Traditional On-Premises IT is where the business purchases, installs and maintains all servers, software licenses, backup devices and telephony equipment which are housed on-site in the business office.  Of course, technology is complicated so IT Experts are needed to do this work for your company. Companies either hire on-staff ITemployees or hire local IT services firms to perform this work. Maintaining the variety of systems needed to run a business is no easy task and very often the IT staff is overworked and subsequently the business has to wait for IT.

STAGE 2: Managed Data Center (Co-Located)

The Co-Located option is very often confused with cloud computing.  IT IS NOT.  While this option does allow companies to move their systems to a dedicated managed data center.  This option has many advantages over traditional on-premises installations but it does still require the company to purchase servers (sometimes), licenses and often pay the provider specifically for the maintenance of their system or still employ an internal IT staff.

STAGE 3: Cloud Computing

Cloud Computing is a model of software deployment where the software application is hosted, as a service provided to customers across the Internet. Cloud Computing" Shorthand for centralized computing services that are delivered over the Internet (a.k.a. the "cloud").

By eliminating the need to install and run the application on the customer's own server, the burden of software maintenance, ongoing operation and support has been removed. Software is pay thru a subscription instead of a license. Businesses no longer need to purchase and maintain either software or hardware assets on their books. Computing becomes a predictable operating expense.

Economies of Scale
One of the biggest advantages of Cloud Computing is that customers are able to leverage the economies of scale created by the cloud service providers ability to purchase and manage repeatable processes and technologies. Providers typically focus on commonservices so they dont need to support (and pay for) a very diverse set of technologies and expensive labor force to maintain it. These costs are passed on to the subscriber.

Business Technology Stack

The diagram below illustrates how cloud computing solutions are available for all layers (or stacks) of technology to operate today's business. Companies are no longer limited to a small group of specialized solutions in the cloud. Today, there are solutions to manage all facets of your business.

The table below highlights some of the key pros and cons of each business computing approach.

Disadvantages	Benefits
Requires IT staff. Capital cost intensive Difficult to upgrade and patch. Unpredictable costs. Difficult to maintain compliancy. Data center may not provide high availability (power, HVAC, etc)	Higher level of internal control. Ability to customize services. Data is on-site. Can operate without Internet.

Disadvantages	Benefits
Requires IT staff. Capital cost intensive Difficult to upgrade and patch. Unpredictable costs. High costs for managed services. Redundant cost if some systems are still on premises.	Higher level of internal control. Ability to customize services. Leverages facilities of professionally managed data center.

Disadvantages	Benefits
Requires reliable internet connection.	Employees Work Anywhere. Lower Capital Expenditures. Focus on business not technology. No Worry Upgrades. Enterprise Class Tools. Faster implementations. Lower upfront and ongoing costs. Pay only for services you need. Guaranteed service-level agreements (SLAs). PREDICTABLE SPENDING HIGH AVAILABILITY, REDUNDANT DATA CENTERS (BUILT IN DISASTER RECOVERY)