Posted by: Vala Shahabi | November 20, 2009

Cloud Computing….Explained!

It seems like everywhere we look nowadays we hear the term “Cloud Computing”.  You don’t have to be a techie anymore to be exposed to this new buzzword that is storming the Internet. IBM has a commercial on TV that tries to explain what cloud computing is and unless you already know what it is, I believe it will leave you more confused then ever. I want to dedicate this blog entry to explaining what cloud computing is and talk through some of it’s benefits and how it will affect the future.

The simplest definition of cloud computing is an application that runs on another machine in the Internet. The simplest example would be your webmail program such as Yahoo Mail.  If you think about it, webmail has become very complete in the last 10 years. You can now be working on multiple emails in the same browser and the same tab. You can even browse your inbox and other folders while composing or reading emails. Something that previously was only available on stand-alone applications. In a sense, it has become a complete application that runs through your browser. However, it is not running on your machine, it is being accessed by your machine through the internet from Yahoo’s datacenter where all your data is also stored.  The internet part is the cloud and the computing is done in the cloud (or Yahoo’s datacenter).  Other examples are Facebook, Google Docs, and CRM tools like  Under the umbrella of cloud computing we have two other technologies that make this possible: Virtualization and Software as a Service (SaaS). In VERY short – virtualization allows you to make better utilization of your hardware by allowing you to run multiple operating systems on a single machine and SaaS is the migration of traditional one time cost of software to a subscription model.

So why is this suddenly so awesome? Didn’t we have dummy terminals and applications running on mainframes 30 years ago? Yes, but because of the development of technology and the speed of the internet, we are there again. But this time around we’re delivering very rich applications. Today, you can sit down on any computer in the world that is connected to the internet and have complete access to almost everything you use on a daily basis; email, social life, etc. This is on-demand anytime, anywhere access. As web technology and HTML 5.0 advances, you will start to see more and more of your favorite applications accessible from the cloud via a web browser, regardless if it’s a computer or hand held smart phone that is accessing it.  The possibilities are endless.

Larry Ellison, CEO of Oracle,  says  cloud computing is nothing new. Nothing is going to change. You will still need an operating system, you will still need a database, you will still need servers to store all of this on. Yes Larry, this is true. Cloud computing may not change your business much because you’re primarily B2B and sell into enterprises. In my opinion, cloud computing isn’t so much what it is, it is what it will affect.

How cloud computing affects the…

  • End User – Never have to worry about downloading, installing, configuring, upgrading, patching, and mucking with software on your personal machine.  Have access to all your applications, all your data, anywhere in the world. Bad news – no more pirating.
  • Software companies – Moving to a SaaS model will affect their bottom line for the interim but revenue will increase further than before as adaption increases and piracy is eliminated.  Support costs will decrease significantly as ISVs no longer will have to troubleshoot their software running on different PC configurations.  Profits will increase as margins increase due to lower operational costs.
  • IT Personnel – As with any new and improved technology, jobs are at risk. With less support issues to troubleshoot, less software to setup and manage, IT people are at risk.
  • Datacenters – Will continue to increase in size. Cooling and power will continue to be the biggest challenges to keep up with the high demand of cloud computing. Perhaps the IT jobs will spill over to maintaining the datacenters.
  • Enterprise/Corporations – Large corporations will take advantage of private clouds that will give them all the benefits of cloud computing but behind the security of their firewall and VPN.
  • SMBs – Small and medium business benefit the most from cloud computing.  Cloud computing and SaaS offer multi-tenant solutions, lowering the cost of delivering enterprise type solutions for small business.   For example, to setup MS Exchange for a company of 40 employees will be far more costly to purchase the licenses and manage the server it is running on than to use a SaaS type solution such as Gmail.  Cloud computing will drive the cost of using enterprise type applications into the ground, making technology affordable for anybody to use.

Applications will finally be like an appliance, you just plug it in and it works, regardless of where and what it’s running on.



  1. Great, concise explanation! Thanks!

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