Cloud Computing and its Benefit to Businesses

Written by Graham on December 18 2008

In the technology world, major players such as Google and IBM are maximising their use of Cloud Computing – but what is it? and more importantly, how can it help businesses?

So what is the definition? According to Gartner, cloud computing is “a style of computing where massively scalable IT-related capabilities are provided ‘as a service’ across the Internet to multiple external customers.”

In English, that definition means the cloud should just deliver a service on a subscription basis, allow access from anywhere and provide economies of scale.

Keeping things simple – Cloud Computing is putting software and data on computer equipment in a safe and secure location “somewhere” on the Internet, the location doesn’t matter as it is “well connected” meaning access to this data or software from anywhere in the world is possible.

The background is nothing special – it has always been technically possible to provide this “cloud computing” service but typically going back a few years most users only had dial up modems running at 56k so only the cash rich businesses could afford high speed connectivity needed to run or access remote data. With the advent and massive growth of broadband and cheap connectivity to Internet the ability to deliver this service to the masses is now a reality.

Problems solved by Cloud Computing

One area it addresses for the business is investment in equipment. For instance a small business in the near future will be able to “rent” the services they require without any capital upfront costs, no hardware maintenance, no office space requirements, no hardware or software going out of date, no backup issues – the list goes on and on. It is easy to see the appeal – pay a monthly cost and have all your IT requirements sorted – no hassles!

Impact on the future working patterns of SME’s

It will mean a fundamental change in our working patterns, as we’ll be able to set up shop anywhere, plug in to the Internet and go, accessing all your data and business applications anytime, any place. There is one caveat – Internet connectivity. Without it you are very exposed in a business sense. So connectivity is critical & key.

Cost saving opportunities that might arise

Any cost savings are short or medium term as you don’t need the entire infrastructure associated with a typical server/desktop deployment. No air conditioning in your server room, no IT staff required, no hardware maintenance, no backup issues. In the long term if the lease/rental model is adopted then you will undoubtedly have paid over the odds compared to owning equipment outright, but you’ve almost certainly had less problems along the way – can you put a cost on hassle free computing?

What can and can’t go in the cloud

It’s hard to imagine anything that can’t work in the cloud in terms of data or applications but that doesn’t mean everything will or needs to be. For example some data might need to be stored electronically but must be 100% secure, therefore the last place to put that data will be on the world biggest public network! So it’s horses for courses.

Opportunities for businesses to update their product offering

I foresee updates and improvement to their product offering will come from the cost savings and the subsequent reinvestment into a business that cloud computing could bring a business. This means businesses that are IT dependant and wish to utilise the latest technology has to offer will have the best solutions/equipment at their disposal to implement ideas very quickly.

Can small businesses adopt it now?

I believe probably the biggest offering cloud computing has to offer is aimed right at the SME. It is ready now, the only caveat is connectivity - all business must have reliable fault-tolerant Internet connectivity, without it they will cease to function in an IT sense.

Potential security risks associated with having data ‘in the cloud’

If anything security couldn’t be better. All your data is on the best hardware, in the most secure physical environment, power protected, continually monitored, continually updated, run by the best IT staff. You couldn’t ask for more! There is no such thing as 100% safe but it is the next best thing.

What UK entrepreneurs are doing with the cloud

There are many business already offering (and have done for some time) services that are “cloud computing” such as SPAM filtering, Email hosting, Corporate Intranets, Line of Business (LoB) applications etc, but the biggest future impact will be Software as a Service (SaaS) where we will rent software like Microsoft Office or even just a single application.

Published in The Business Telegraph Business Club.

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