The generally accepted definition of cloud computing comes from the US National Institute of Standards and Technology (NIST), which says it should enable convenient, on-demand access to a shared pool of computing resources - like networks, servers, storage, applications and services.
This HP whitepaper looks at how, when working to this model, the cloud allows organisations to efficiently grow.
Under the NIST definition, cloud services can be rapidly provisioned and released with minimal management effort or service provider interaction. Cloud computing therefore represents a fundamental change in the way computing power is generated and distributed, transforming the delivery of IT tools and products into elastic, on-demand services - characterised by flexible "pay as you go" payment models.
Such cost models, as well as the types of cloud computing described below, cut costs and aid business growth.
Types of on-demand cloud services
Cloud services are built around the on-demand software-as-a-service (SaaS), platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS) delivery models. These can benefit firms of all sizes, as they reduce fixed hardware and software costs, as well as management costs.
SaaS applications are designed for end-users and delivered over the web, and PaaS is based around a set of tools and services designed to make coding and deploying applications as quick and efficient as possible. IaaS consists of the hardware and software that powers everything, including servers, storage, networks and operating systems.
With SaaS, users can get software applications through subscriptions or a "pay-as-you-go" model. PaaS is a computing platform that supports the creation of applications without the complexity of buying and maintaining the software and infrastructure to deliver those applications. It is particularly useful when multiple developers are working on a project or where other external parties need to interact with the development process.
IaaS is a way of quickly delivering cloud computing infrastructure as an on-demand service. Rather than purchasing servers, software, data centre space or network equipment, organisations instead buy those resources as a fully outsourced and managed service. This is particularly useful in meeting volatile or big spikes or troughs in demand for computing processing capacity, and for organisations without the necessary capital to invest in hardware.
An alternative to high capital expenditure
The cloud therefore reduces fixed capital expenditure (Capex) and organisations can instead benefit from more cost-effective operational expenditure (Opex) outlays for their IT needs. It allows you to stop tying up capital expenses in IT systems that are expensive and under-used most of the time, as a result of being loaded with unwanted functionality. Through the cloud you can get the exact IT service you need, when you need it, and only for as long as you need it. This is pretty agile from a technology investment angle, but not the only such aspect of cloud computing which has an effect on the bottom line.
As well as lower costs, business agility, flexibility and ease of use are still the main attractions for using the cloud. European Commission research, which questioned almost 500 companies, showed that over 80 per cent of those who were already using the cloud, saw a reduction in IT costs of between 10 and 20 per cent. 12 per cent saw an impressive 30 per cent or more reduction.
Other business benefits included more effective mobile working (46 per cent of those questioned), higher productivity (41 per cent), more use of standard processes (35 per cent), better ability to enter new business areas (33 per cent) and the ability to open up in new locations (32 per cent).
The cloud is also driving the migration from the "IT as a cost centre" model to a more business-centric "IT as a service" model. This means IT shifts from producing services to optimise production and consumption of those services in ways consistent with business requirements. This changes the role of IT from a cost centre to a centre of strategic value - and being less of a financial drain in the process.
A cloud infrastructure using this principle leads to technology and services being delivered to corporate users and customers to enable them to do their jobs or complete transactions, for instance, rather than technologies being deployed to support IT itself.
With a cloud computing environment, all organisations can increase and decrease the number of users of computing resources instantly. They can provision new resources and stop using them when required. This provisioning is typically automated, further increasing business agility and saving money into the bargain. Organisations are discovering that the scalability and accessibility of cloud-based services is supporting new business opportunities, making it easier to open up applications, information and processes to partners, suppliers and customers.
Arming the staff
Because cloud computing is fast, easy and cost-effective to provide, companies can also explore new ideas more readily. Cloud computing can enable managers to arm their employees with tools to undertake their jobs in a much more straightforward manner than before. The resources used can be increased and decreased instantly in line with business requirements. In a cloud-centered environment, IT effectively becomes commoditised.
Cloud computing is ideal for test-and-development needs, as organisations can call on as much capacity as they need while products or services are in development. Those cloud project resources can then be scaled up if the product or service is moved to a production and delivery environment. If not, the capacity can be turned off or moved to another project.
So, as well as all the other benefits that can be attributed to the cloud, cutting costs and increasing profits to aid business growth are still very much key.