CLOUD COMPUTING: NO INFRASTRUCTURE AT ALL

 

LEARNING OUTCOMEPerhaps the hottest topic right now in all of technology is cloud computing. Cloud computing is a technology model in which any and all resources—application software, processing power, data storage, backup facilities, development tools … literally everything—are delivered as a set of services via the Internet (see Figure 7.7 on the next page). Think of cloud computing as you would utilizing the services of a taxi cab:

Figure 7.7 Cloud Computing: The “Kitchen Sink” of Technology Charged on a Credit Card

• Page 204

• Utility, pay-as-you-go, metered model—You pay for only what you use when you use it; the taxi cab ride across town costs $40; 10 Gb of storage in the cloud for a month costs $1.50 (really … just 150 pennies).
• Enables near real-time scalability (growing or shrinking)—Get how much or how little you need; if you have 6 people in your group on a certain trip, hail two taxis for only that trip; pay on a monthly basis for what you rent in the cloud and easily adjust your monthly requirements up or down.

The goal of taking advantage of cloud computing is to have your computing costs (for example, infrastructure like ERP and SCM software and associated hardware) align with the activity level of your organization. As sales grow and you add more employees, perhaps sales representatives, customers, and the like, you pay for more computing resources in the cloud. If your business slows and so does your business activity, then the cost of cloud-based resources would decline.

Now, before we dive into the details of the cloud, we need to provide a disclaimer of sorts. Cloud computing is very new, growing rapidly, and changing every day. So, while many experts agree on the concepts associated with the cloud, definitions and even terminologies are in a state of flux. What we present here is the “status quo” for mid-2011; things will have undoubtedly changed by the time you read this book.

 

THE BENEFITS OF CLOUD COMPUTING   As you can see, cloud computing holds great promise for both established organizations and also start-up businesses. For the latter, cloud computing enables a start-up business to minimize investments in technology while still being able to take advantage of large-scale, fully-robust application software such as CRM and SCM. In summary, some of the many advantages of cloud computing include:

• Lower capital expenditures—You don’t buy what you need in terms of hardware and software, which can be very expensive. Instead, you take advantage of the pay-as-you-go cloud computing model and pay for only what you need and use.
• Lower barriers to entry—Cloud computing lowers barriers to entry in markets that require a significant investment in technology. Since you don’t have to buy the technology, you can enter a market without the expense of the technology. In doing so, you can spend your money in other areas like customer relationship management initiatives.
• Page 209
• Immediate access to a broad range of application software—On a moment’s notice, you can begin to use almost any application software you need—ERP, SCM, CRM, BI and analytics tools, etc. Again, you pay only for how much you use them.
• Real-time scalability— This goes either way, up or down. You can scale down and your costs move in like manner. You can scale up just as easily also.