Cloud computing is an emerging computing technology that uses the internet and central remote servers to maintain data and applications. Cloud computing allows consumers and businesses to use applications without installation and access their personal files at any computer with internet access. This technology allows for much more efficient computing by centralizing storage, memory, processing and bandwidth. Cloud computing is broken down into three segments: "applications," "platforms," and "infrastructure." Each segment serves a different purpose and offers different products for businesses and individuals around the world. In June 2009, a study conducted by VersionOne found that 41% of senior IT professionals actually don't know what cloud computing is and two-thirds of senior finance professionals are confused by the concept, highlighting the young nature of the technology.
Cloud Computing Segments
Applications: It's all On Demand
So far the applications segment of cloud computing is the only segment that has proven successful as a business model.[2] By running business applications over the internet from centralized servers rather than from on-site servers, companies can cut some serious costs. Furthermore, while avoiding maintenance costs, licensing costs and the costs of the hardware required to run servers on-site, companies are able to run applications much more efficiently from a computing standpoint.
OnDemand software services come in a few different varieties which vary in their pricing scheme and how the software is delivered to the end users. In the past, the end-user would generally purchase a license from the software provider and then install and run the software directly from on-premise servers. Using an On-Demand service however, the end-user pays the software provider a subscription fee for the service. The software is hosted directly from the software providers' servers and is accessed by the end user over the internet. While this is the most common platform for On Demand software services, there are also some slightly different offerings which can be described as a hybrid of these two platforms. For instance, a program through which the end user pays a license fee, but then accesses the software over the internet from centralized servers is considered a hybrid service.
- Who is Offering On Demand Software? - The companies below are already established in the On-Demand software or SaaS business. These companies charge their customers a subscription fee and in return host software on central servers that are accessed by the end user via the internet.
- Who is Offering Traditional Software? - The following companies have established themselves as traditional software providers. These companies sell licenses to their users, who then run the software from on premise servers.
Platforms:
Many of the companies that started out providing On Demand application services have developed platform services as well. The platform segment of cloud computing refers to products that are used to deploy applications. Platforms serve as an interface for users to access applications provided by partners or in some cases the customers. Some examples included Salesforce.com's platform force.com, which allows subscribers to access their applications over the internet. NetSuite, Amazon, Google, and Microsoft have also developed platforms that allow users to access applications from centralized servers.
In July 2008, HP, Yahoo! (YHOO), and Intel (INTC) announced a joint cloud computing research project called the Cloud Computing Test Bed. The companies are jointly designing and producing the internet based testing platform to encourage further development in cloud computing technologies. The test bed is beginning at six physical locations, each hosting a cloud computing infrastructure utilizing HP hardware and Intel processors.
- Active platforms - The following companies are some that have developed platforms that allow end users to access applications from centralized servers using the internet. Next to each company is the name of their platform.
Infrastructure:
The final segment in cloud computing, known as infrastructure, is very much the backbone of the entire concept. Infrastructure vendors provide the physical storage space and processing capabilities that allow for the all the services described above. The products in this segment are slightly more varied than those in the other areas of cloud computing but include ones such as managed hosting, and development environments (such as Google gears) that allow users to build applications. Cloud storage, such as Amazon's S3, is also considered to be part of the infrastructure segment.
- Major Infrastructure Vendors - Below are companies that provide infrastructure services:
What does a Shift Towards Cloud Computing Mean?
So who is affected by a paradigm shift in the computing industry? The shift would affect companies a few different sub-industries including software companies, internet service providers and hardware manufacturers. Companies in each of these industries will face significant change if cloud computing is to be the next step for the industry. While it is relatively easy to see how the main software and internet companies will be affected by such a shift, how companies in the internet and hardware industries will be affected is slightly more difficult.
