What is “The Cloud?”

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(Flickr: SixRevisions)

I said, Hey! You! Get off of my cloud
Hey! You! Get off of my cloud
Hey! You! Get off of my cloud
Don’t hang around ’cause two’s a crowd
On my cloud baby
— The Rolling Stones

So many things have been written in the last few years about “The Cloud” that many people are confused. Is it something that should be used? Or avoided? What is it really?

Here is David’s definition: “The Cloud” is a term used to describe computing resources that are not tied to physical hardware or equipment. That’s it. Pretty simple, don’t you think?

So why is there so much confusion about the cloud? I think there are many reasons, but one primary reason is because it is new and we naturally don’t trust new things. Think about our hunter-gatherer ancestors sitting in their hut, and someone new comes walking up. Is the new person a friend or an enemy? Our defenses go up automatically until we learn more. In the same way, many people are suspicious of new cloud services that come along and haven’t learned whether or not those services can be trusted.

As cloud services continue to multiply, grow, and mature, they will become more familiar to us. Many of us have a Gmail, Yahoo!, Hotmail, or AOL email account, or maybe one of each. That account is a cloud service that you use. You say you don’t trust those, so you stick with the email account your ISP gave you? Guess what? That’s a cloud service as well. There is no physical piece of equipment needed for you to get your email; you don’t own the email server, any software licenses, or the people to manage them. The cloud provider takes care of all of that and you benefit from the low cost (or no cost) of that service.

The main reason the cloud is getting so much notice lately is the cost savings that can come along with the cloud. Think about 10 companies that previously would have each had an email server and someone to administer that server. That’s 10 servers, 10 server software licenses, and 10 administrators; that’s a lot of money. But now those 10 companies may use a cloud service for their email, and that cloud service may use one or two servers, with one or two administrators; that’s a lot less money. The savings gets passed along to the 10 companies in the form of lower pricing for email.

Another advantage to the cloud is it moves capital expenses into operating expense. A company may have capitalized the cost for the server and software licenses, depreciating it over 3 years. Even though a portion of that cost is amortized each month, money is still tied up for a long time, potentially impacting other aspects of the business. By turning it into an operating expense, the company only pays a small amount each month for usage. This frees up capital cash for other business purposes and helps keep the IT equipment off the balance sheet.

Admittedly, the cloud does not have a solution for every business problem. In fact, there are still quite a few questions about the cloud. Who owns the data in the cloud? How secure is the data in the cloud? What measures are being taken to protect your data? What happens if your internet connection goes out? These questions need answers for the cloud provider to earn our confidence. Most reputable cloud providers have answers for you and will share them with you, be sure to ask.

Bottom Line

You pay an electric company to provide you with electricity. You pay a telephone company to provide you with dial tone. Before long, you won’t think twice about paying a cloud provider for an IT service. It’s the slow, continued march of the reduction of IT. If you work in IT, that may be unsettling, but the reduction of IT is inevitable (more on this in a future post).

The Rolling Stones wanted you off of their cloud. Today, a lot of companies are trying to get you onto their cloud. Do your homework, ask a lot of questions, and determine the right time for you to move something to the cloud.

What are your thoughts about the cloud? Please leave them in the comments below.

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