What Is Cloud Computing?

Wikipedia defines cloud computing as “the use and access of multiple server-based computational resources via a digital network (WAN, Internet connection using the World Wide Web, etc.).” 

But what the heck does that mean? 

The easiest way to not only understand what cloud computing is but also gain insight into why it’s gaining in popularity is to compare it to the evolution of public utilities. For example, let’s look at the evolution of electricity. 

Back in the industrial age, factories had to produce their own power to run machines that produced the hard goods they manufactured. Be it textiles or railroad spikes, using machines gave these companies enormous competitive advantages by producing more goods with fewer workers and in less time. For many years, the production of power was every bit as important to their company’s success as the skill of their workers and quality of their products. 

Unfortunately, this put factories into TWO businesses: the business of producing their goods and the business of producing power. Then the concept of delivering power (electricity) as a utility was introduced by Thomas Edison when he developed a commercial-grade replacement for gas lighting and heating using centrally generated and distributed electricity. From there, as they say, the rest was history. 

The concept of electric current being generated in central power plants and delivered to factories as a utility caught on fast. This meant manufacturers no longer had to be in the business of producing their own power with enormous and expensive water wheels. In fact, in a very short period of time, it became a competitive necessity for factories to take advantage of the lower-cost option being offered by public utilities. Almost overnight, thousands of steam engines and electric generators were rendered obsolete and left to rust next to the factories they used to power. 

What made this possible was a series of inventions and scientific breakthroughs – but what drove the demand was pure economics. Utility companies could leverage economies of scale that single manufacturing plants simply couldn’t match in output or in price. In fact, the price of power dropped so significantly that it quickly became affordable for not only factories but every single household in the country. 

Today, we are in a similar transformation following a similar course. The only difference is that instead of cheap and plentiful electricity, advancements in technology and Internet connectivity are driving down the costs of computing power. With cloud computing, businesses can pay for “computing power” like a utility without having the exorbitant costs of installing, hosting and supporting it on premise. 

In fact, you are probably already experiencing the benefits of cloud computing in some way but hadn’t realized it. Below are a handful of cloud computing applications, also called SaaS or “software as a service” you might be using: 

•  Gmail, Hotmail or other free e-mail accounts 
•  Facebook 
•  NetSuite, Salesforce 
•  Constant Contact, Exact Target, AWeber or other e-mail broadcasting services 
•  Zoomerang, SurveyMonkey and other survey tools 
•  LinkedIn 
•  Twitter 
•  All things Google (search, AdWords, maps, etc.) 

If you think about it, almost every single application you use today can be (or already is) put “in the cloud” where you can access it and pay for it via your browser for a monthly fee or utility pricing. You don’t purchase and install software but instead access it via an Internet browser. 

The concept of electric current being generated in central power plants and delivered to factories as a utility caught on fast. This meant manufacturers no longer had to be in the business of producing their own power with enormous and expensive water wheels. In fact, in a very short period of time, it became a competitive necessity for factories to take advantage of the lower-cost option being offered by public utilities. Almost overnight, thousands of steam engines and electric generators were rendered obsolete and left to rust next to the factories they used to power. 

What made this possible was a series of inventions and scientific breakthroughs – but what drove the demand was pure economics. Utility companies could leverage economies of scale that single manufacturing plants simply couldn’t match in output or in price. In fact, the price of power dropped so significantly that it quickly became affordable for not only factories but every single household in the country. 

Today, we are in a similar transformation following a similar course. The only difference is that instead of cheap and plentiful electricity, advancements in technology and Internet connectivity are driving down the costs of computing power. With cloud computing, businesses can pay for “computing power” like a utility without having the exorbitant costs of installing, hosting and supporting it on premise. 

In fact, you are probably already experiencing the benefits of cloud computing in some way but hadn’t realized it. Below are a handful of cloud computing applications, also called SaaS or “software as a service” you might be using: 

•  Gmail, Hotmail or other free e-mail accounts 
•  Facebook 
•  NetSuite, Salesforce 
•  Constant Contact, Exact Target, AWeber or other e-mail broadcasting services 
•  Zoomerang, SurveyMonkey and other survey tools 
•  LinkedIn 
•  Twitter 
•  All things Google (search, AdWords, maps, etc.) 

If you think about it, almost every single application you use today can be (or already is) put “in the cloud” where you can access it and pay for it via your browser for a monthly fee or utility pricing. You don’t purchase and install software but instead access it via an Internet browser. 

What About Office 365 And Google Apps? 

Office 365 and Google Apps are perfect examples of the cloud computing trend; for an inexpensive monthly fee, you can get full access and use of Office applications that used to cost a few hundred dollars to purchase. Because these apps being powered by the cloud provider, you don’t need an expensive desktop with lots of power to use them – just a simple Internet connection on a laptop, desktop or tablet.