Cloud Computing and What It Means to Businesses

I was recently asked "what is cloud technology. Isn't that like Google Docs?" and the simple answer is yes. Although we're seeing new cloud computing initiatives and offering appearing everyday (such as Google Docs, iCloud, Azure, and Office 365), cloud computing is nothing new.

So why now you may ask?

Cloud computing has been around for quite some time, and has been a long time in the making. There have been a variety of catalysts over the past few years which have encouraged the momentum of cloud computing.

• The first and most prevalent one is Internet Access. Access to the web is ubiquitous and high speed Internet access is becoming more and more accessible as time progresses.
• As Moore's law predicted, processing speed has continued to double every 18 months which has resulted in higher density storage and process speeds continue to increase.
• The cost of bandwidth is continuing to decrease. As the cost of Internet access and utilisation continue to decrease the Total Cost of Ownership (TCO) of cloud services decreases.
• As IT technologies mature, service reliability continues to increase; meaning that large IT systems now have various levels of redundancy built-in which reduces or eliminates services outages in the event of a failure.

So what's the big deal?

Cloud computing introduces a significant paradigm shift in the way IT solutions are designed. IT solutions which live in the cloud no longer rely heavily on infrastructure back in your server room. This infrastructure is now offloaded to the service provider. You will now have the ability to roll out and modify applications faster, at a lower cost, with less training, and less effort is required to support these applications than traditional in-house / on-premises applications.

My blog is currently focusing on one such on-premises system, Exchange. For many years my role was as a systems administrator, looking after the IT Infrastructure for a variety of organisations, ranging from small businesses and educational institutes, to remote mining operations and off-shore oil and gas providers. And during that time I always looked at the Exchange box as a ticking time bomb. Every time something went wrong, it cost thousands and everybody yelled!

Exchange typically requires a high-end server that consumed a lot of resources, electricity, licensing costs. Not to mention antivirus and spam filter maintenance, complicated backup and recovery operations, monitoring staff mailbox utilisation, plus all the security headaches. It cost thousands per year in cash to keep the system working well, and a portion of my time every week monitoring and tweaking to keep things healthy.

This makes Exchange an excellent candidate for organisations to "hand-ball" off to someone else to look after - "hand-ball" it out into the cloud. With cloud services, organisations only need to pay for what they use, and in the case of Exchange costs are typically based on a per user per month basis.

Is it worth it?

One way of thinking about cloud computing is to consider it as the Walmart of IT service delivery. In the same way as bulk purchasing and large logistical operations drive down per-item costs, by purchasing huge amount of IT infrastructure and providing services to large numbers of users / companies, the per user / per service cost of these solutions are also driven down. For IT Managers and CIO's the benefits are three fold:

1. Lower capital expenditure due to less need to invest in high-end server hardware.
2. Decreased risk because someone else is looking after their IT services.
3. Lower day-to-day operating costs as typically a lower IT department head count is required.