The term has evolved to encompass a mix of many technologies and methods that have existed for years, even decades, as well as more recent developments, that enable computing to be hosted remotely from the user. The main driver for cloud computing though is the increase in speed and reliability of the internet and one of the major characterising features is that services are usually paid for on a pay-as-you-go basis.

Webmail – A Simple Cloud Computing Example

A simple example of cloud computing is webmail. Anyone can access their webmail from anywhere in the world simply by knowing the web address of the webmail service, there's no need to know the name of the server or an ip address or anything else.

The webmail provider takes on the job of making sure that there's enough disk space and processing power to allow all their customers to store and retrieve their mail on demand. The user doesn't have to worry about maintaining web clients on their PC or, in the case of companies, local email servers.

More Complex Software as a Service Applications

Take this example a little further and you can see how different services can be provided to individuals and small companies at a fraction of the cost of setting up and IT infrastructure, servers and applications. Salesforce.com is perhaps the best known example of a customer relationship management (CRM) system that uses cloud computing to provide a fully-fledged software application that can be used by one user or hundreds.

By paying an amount per user per month (although there are volume discounts) very small companies can get access to professional CRM functions for a very low initial cost compared to buying, installing and maintaining their own CRM software. Of course the offering form the application provider is

Different Cloud Computing Variations

This is an example of a cloud computing variant known as software as a Service (SaaS) where an application and your data are hosted in the cloud. There are two other major variants, infrastructure as a service (IaaS) and platform as a service (PaaS).

As the names suggest, these variants offer infrastructure or platforms on the web that companies pay to use as and when they need them. Companies can buy time on servers as disk space (IaaS) and deploy their own software and applications on that rented infrastructure. This was initially know as hardware as a service (HaaS) but IaaS appears to have displaced that term.


PaaS describes buying something more than IaaS in that software is included in the offering. A typical PaaS deployment would be workflow or development platforms which teams use over the internet or a private network to collaborate on projects. There is often little or no dividing line between PaaS and SaaS.

Supporting Technology for Cloud Computing

The idea of cloud computing has been around for a while, with application software providers (ASP) first appearing at the beginning of this century. But it is in recent years that a number of technologies have been developed that make cloud computing more accessible and workable that it might otherwise be.

Virtualisation is one of those technologies. It allows many instances of an operating system, or many different operating systems, to run on one server. This allows providers of cloud computing services to make the best use of their hardware and tailor it to customer demand, taking virtual servers up and down and even moving them between physical servers as required. .

Stronger Communications Links Inside and Outside the Cloud

Infiniband is another cloud computing enabling technology, a standard for connecting high-powered servers and storage arrays. This has allowed the building of larger server 'farms' in which individual computers can talk to each other and pass computations between them. Infiniband has enable the spread of grid computing which has fuelled the spread of cloud computing.

Cloud computing operators need to have strong networks that are laid over the ordinary internet to be able to provide guarantees of service. This technique is known as optimised internet overlay and improve the reliability of communications over the internet.

Business Benefits from Using Cloud Computing

There's no doubt that cloud computing offers significant advantages to businesses, particularly small businesses and startups. Precious startup capital can be eked out of the initial years by paying low monthly charges for just the software and services that a company needs, when they need them. This offers a startup the same software that multinationals use without having to invest in an IT infrastructure and IT personnel from the word go.

Users also only need low-power, low-cost PCs because the power and space that they need for heavyweight applications can be provided by the cloud. Only high intensity applications like heavy database crunching or video processing need be done locally.

Possible Disadvantages of Cloud Computing

Many people have concerns about the hosting of company and personal data on remote servers and there's no way that cloud computing can operate without strict data privacy agreements and adherence to them. Companies are also unwilling to have their data on the internet where it may be at risk from corruption or theft.

There are impacts on company growth and overheads too. Once a company has a significant number of users on a cloud computing platform they are at risk from price rises from the hosting companies. Companies may then find that moving away from a hosted service to their own infrastructure and data is technically and managerial a significant challenge.

Support from the Big Boys

Whether or not cloud computing is considered to bring benefits or disadvantages all of the major technology companies in computing have thrown their weight behind it including Microsoft, IBM, Google, and Amazon.