A simple example of cloud computing is Yahoo email or Gmail etc. You dont need a software or a server to use them. All a consumer would need is just an internet connection and you can start sending emails. The server and email management software is all on the cloud ( internet) and is totally managed by the cloud service provider Yahoo , Google etc. The consumer gets to use the software alone and enjoy the benefits. The analogy is , 'If you only need milk , would you buy a cow ?' All the users or consumers need is to get the benefits of using the software or hardware of the computer like sending emails etc. Just to get this benefit (milk) why should a consumer buy a (cow) software /hardware ?
Cloud computing is broken down into three segments: "applications," "platforms," and "infrastructure." Each segment serves a different purpose and offers different products for businesses and individuals around the world. In June 2009, a study conducted by VersionOne found that 41% of senior IT professionals actually don't know what cloud computing is and two-thirds of senior finance professionals are confused by the concept,highlighting the young nature of the technology. In Sept 2009, an Aberdeen Group study found that disciplined companies achieved on average an 18% reduction in their IT budget from cloud computing and a 16% reduction in data center power costs.
Applications: It's all On Demand
So far the applications segment of cloud computing is the only segment that has proven useful as a business model.The Cloud Wars: $100 Billion at Stake, Published by Merrill Lynch, May 7, 2008.By running business applications over the internet from centralized servers rather than from on-site servers, companys can cut some serious costs. Furthermore, while avoiding maintenance costs, licensing costs and the costs of the hardware required to run servers on-site, companies are able to run applications much more efficiently from a computing standpoint.
On Demand software services come in a few different varieties which vary in their pricing scheme and how the software is delivered to the end users. In the past, the end-user would generally purchase a servers and is accessed by the end user over the internet. While this is the most common platform for On Demand software services, there are also some slightly different offerings which can be described as a hybrid of these two platforms. For instance, a program through which the end user pays a license fee, but then accesses the software over the internet from centralized servers is considered a hybrid service.
- Salesforce.com (CRM)
- Google (GOOG)
- NetSuite (N)
- Taleo (TLEO)
- Concur Technologies (CNQR)
- Info Technologies (IT)
- Canadasoftware.net (nexgen)
- SAP AG (SAP)
- Oracle (ORCL)
- Blackbaud (BLKB)
- Lawson Software (LWSN)
- Blackboard (BBBB)
The final segment in cloud computing, known as the infrastructure, is very much the backbone of the entire concept. Infrastructure vendors environments (such as Google gears) that allow users to build applications. Cloud storage, such as Amazon's S3, is also considered to be part of the infrastructure segment.
Major Infrastructure Vendors - Below are companies that provide infrastructure services:
- Google (GOOG) - Managed hosting, development environment
- International Business Machines (IBM) - Managed hosting
- SAVVIS (SVVS) - Managed hosting
- Terremark Worldwide (TMRK) - Managed hosting
- Amazon.com (AMZN) - Cloud storage
- Rackspace Hosting (RAX) - Managed hosting & cloud computing
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