Cloud Computing ABCs

By Mal Postings  |  Posted 04-14-2011 Print


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This report breaks down the ABCs of cloud computing: architecture, business benefits, and costs. The goal? to give you some guidance as you grapple with the rapidly evolving cloud computing environment and the market confusion that still exists around these offerings.

As the widespread acceptance of cloud computing grows, so too does the pace at which companies, suppliers, customers and consumers are adopting cloud computing and associated services -- public, private, community and hybrid.

According to Ernst & Young's 2010 Global Information Security Survey, 23% of respondents are currently using cloud computing services, 7% are evaluating its use and 15% are planning to use within the next 12 months. These are surprisingly high numbers, especially given the evolving nature of cloud computing and the market confusion that still exists around the "ABCs" of cloud computing:

  • Architecture
  • Business benefits (and risks)
  • Costs (and new financial models, as well as any effects on related corporate accounting)

Cloud computing services use Internet technologies, deploy multitenancy, achieve scalability and meter by use. Service-oriented architecture (SOA) has reached technical maturity and now needs to be applied throughout the business architecture. Business service thinking needs to focus on what it is that cloud services providers are delivering and not on how they are delivering it.

The benefits and risks of cloud services are becoming well understood (and improved) on a daily basis. And the change from an OpEx to a CapEx utility cost-based approach is gaining traction, with certain services taking a lead position. The new IT strategy focuses on finding the balance between using third-party commoditized IT cloud-based services and retaining innovative IT that internally supports market differentiation.


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