New computing technologies have shown the potential to transform enterprises. From established brands to startups, the rise of cloud technology has made it possible to deliver shareable internet solutions with greater ease and accessibility. But a question remains unclear to many companies: what is the actual meaning of cloud computing?

There are more than 20 published definitions of cloud computing. This makes it difficult for enterprises to understand the real benefits, leaving them with inflated expectations when deciding to sign up for a cloud service.

VansonBourne’s report on “The Business Impact of the Cloud” had 460 senior financial decision-makers evaluated from all over Europe. It was stated that 88% of the decision-makers were familiar with cloud computing to some extent — but only 17% were completely familiar with the term.

Why and when should I migrate?

Most companies will eventually migrate some of their data, including applications, to the cloud. The tricky part is knowing when and for what reasons to migrate. Every business has unique needs, so any incurred costs plus benefits when migrating to cloud computing can only be valued on provider-by-provider an application-by-application basis.

What does my business stand to gain from cloud technology?

To clearly understand how your business will benefit from the cloud, it would be appropriate to first comprehend its basic principles:

  • Broad network access — anywhere, on any device
  • Rapid elasticity on computing power and storage
  • Resource sharing
  • Measured service — metered billing
  • On-demand self-service

Very few cloud services fully integrate all of these characteristics. This has resulted in the deployment of “private clouds” — partial cloud computing models where resource sharing is practiced across a single enterprise. Private clouds have so far reduced the complexity and risk of engaging cloud technology in business.

But this does not mean there are no viable service models that have already been deployed to cater to the public. The few that exist have displayed the capacity to securely handle data and applications of all sizes and complexity:

  • Microsoft and Salesforce offer on-demand Software-as-a-Service (SaaS) applications
  • Microsoft, Google and Amazon offer Platform-as-a-Service (PaaS) applications
  • Amazon, IBM and Joynet offer Infrastructure-as-a-Service (IaaS)

PaaS technology provides developers a platform to build, host and even scale applications in the available cloud-based data centers, whereas IaaS technology provides a scalable and affordable platform in form of physical infrastructure. It is expected that in the near future both PaaS and IaaS will be merged into a single cohesive cloud solution.

So how is cloud computing deployed?

This is currently done in four models:

  • Public cloud service — multiple users working from the same cloud space
  • Private cloud service — a dedicated cloud space assigned to a single customer
  • Hybrid cloud service — a combination of public and private clouds
  • Community clouds — select stakeholders have access to semi-public clouds

Apart from the high cost of deployment, private and hybrid services are the most popular cloud solutions, primarily due to concerns of privacy and security. However, we cannot assume the benefits of public and community clouds, as each provider, application, platform, and deployment model comes with its own unique benefits.

Is cloud computing cost-effective?

It is impossible to decide whether or not cloud computing is universally cost-effective. Instead, cost-effectiveness can be determined by the needs of each individual business by conducting a cost-benefit analysis for each application to be migrated to the cloud. This will vary based on necessary security measures, providers, software updates and other cloud service operations.

As cloud technology continues to develop, it is important that senior decision makers outside of IT departments fully understand cloud computing. This will help companies adopt cloud service intelligently and successfully compete in the market.