Definition

Cloud computing is the ability to draw IT resources from an internal or external, third-party source using either Internet-based or local-area infrastructure. The cloud is essentially the Software-as-a-Service (SaaS) model expanded to include hardware-driven functions like storage and  processing.

While the concept dates to the late 1960s, the modern cloud movement  began in 2002 with the launch of Amazon.com’s Amazon Web Services.  The company followed up with the Elastic Computer Cloud (EC2) in 2008, and has since been joined by Google, Microsoft and others.

Business Applications

Applications range from server and storage services to application development/testing to the applications themselves, like ERP and CRM. In fact, it is conceivable that enterprises will soon be able to out-source virtually all  their IT needs to the cloud, avoiding the cost and complexity of building an IT network from the ground up.

Likewise, established enterprises could use their existing  networks to provide cloud services “behind the firewall,” that is, a private cloud for strictly internal purposes. This would improve management capabilities and allow resources  to be dynamically shifted to meet rising and falling data loads, at once  eliminating current silo architectures and the need to over-provision resources  to meet peak demand. Internal clouds can also be leased to third parties, turning IT from a cost center to a revenue generator.

Deployment Concerns

Security and reliability are the two major issues. Cloud-based storage is  a particular concern, considering it places institutional knowledge under the  control of someone else.

On the security front, the main issue is the fact that users are not passing  through the standard sign-on and Web access protocols before hitting the  cloud. Mobile and remote users in particular can often bypass enterprise  network security entirely.

As for reliability, cloud access is only as good as the  Internet service it’s carried on

Technical details

The cloud is essentially an abstraction of the existing  Internet infrastructure. As such, it requires client-side hardware and software tied to legacy computing infrastructures and ever-shifting  application, virtualization and middleware software layers.

Many cloud providers have adopted the “utility computing”  model of delivery in which IT resources are distributed to users much as  electricity and telephone service.

Key enabling technologies include high-speed networking bolstered by 10 GbE in the enterprise, and advanced Application Programming Interfaces (APIs).