Last time we talked about why the Cloud exists – what problems does it solve. I put them into three categories:
- Aggravation – the grief of managing a typical internal IT (Information Technology) infrastructure.
- Accounting – the mismatch between the costs and benefits in the typical IT environment.
- Agility – or rather the lack of agility, the ability to quickly react to new business conditions.
So, what is the Cloud, and more importantly how does it address these issues?
The concept is pretty simple. Instead of buying your own servers, network equipment, and storage infrastructure, and separately contracting for or paying your own employees to manage all of this, dealing with changes in need, changes in business conditions that force changes, or opportunities that require changes to beat your competition, you have someone else do it all. You outsource the support activities that aren’t your core business.
If you were running a company that ground wheat into flour in 1700s, you probably had a water wheel. You built it and maintained it, and it pretty much determined where you located your company. You needed flowing water. If you needed more power, you built another water wheel.
That same company in the 1800s probably used a steam engine. In this case you bought it, had it installed or maybe even built right in your factory, and you maintained it and keep it fueled. In some cases you even chopped your own wood or dug your coal out of your own mine. Now you placed your company where you could get the appropriate fuel inexpensively. If you needed more power, you added another steam engine to your factory or built a new factory near another fuel source.
In the 1900s your wheat mill is powered by electricity. You probably don’t know where or even how the electricity is generated or how it gets to your company. More importantly, you don’t care. No more needing someone who can run and maintain the power source. You just pay for the electricity to actually use.
If you are old enough and were part of a big company, you remember that your company had its own payroll department, including its own servers (mainframes), and often your own payroll software. Plus a team folk to deal with not only the periodic payroll cycles (and most companies had at least two payroll cycles, like weekly and monthly), but more critically deal with the changes imposed by governments. Local, State, and Federal government have thousands of people with nothing better to do than cause change. Different classifications of people had a different set of rules, and unions added additional complexity. Companies like ADP grew up to provide the expertise necessary to deal with payroll, HR, and benefits. (ADP started in 1949, and now has over a half million customers.) With Intuit Quick Books at the other end, it is now very unusual for a company of any size to really “do” their own payroll and the accompanying government reporting and tax payments. You simply get online and report how much the employee earns to your payroll provider, and poof everything happens – electronic deposits to the employees, electronic tax filing. All you need to do is make sure the money is in the right account at the right time. You don’t know, and don’t need to know, where your payroll is actually being processed.
These services aren’t free, but they are a lot less expensive than doing it yourself. Plus you have a lower risk of messing up a tax filing.
The Cloud is just like these examples, you simply let someone else own, manage and run some portion of your IT infrastructure. In its simplest form, the Cloud is the Internet. Like the discovery of electricity and the thousands of inventions and processes that it took to go from a curiosity to a critical component of human civilization, the advancement of the Internet to the omnipresent, reliable, and high performance information media provides the foundation for the new paradigm of Cloud Computing. Your IT goes into the Cloud. You don’t necessarily know where, by whom, or how and maybe you don’t care. Wherever and whatever is running your business, you connect to it through the Internet. As we said last time, the Cloud
- Eliminates much of the Aggravation inherent in running your own IT department by moving that responsibility to another organization, the Cloud Service Provider. We’ll talk a lot about Cloud Service Providers next time.
- Reduces the Accounting woes by allowing a clear correlation between costs and revenue or value, primarily by moving capital expenses to operational expenses.
- Increases your organizations Agility by allowing you to add additional resources “at the flick of a switch,” often in minutes, and potentially without any explicit direction from you. The need for additional resources causes the “appearance” of the necessary resources, automatically.
If you start talking to people about the Cloud, you suddenly realize two things. There are a lot of new terms and acronyms; and, like the three blind men trying to figure out what an elephant is, different people have different views. In reality, the Cloud is not simple. It is a lot like buying a car. All cars will get you from one place to another, but there are wide varieties in comfort, performance, capacity, and extras. The Cloud is like that, but without the standardization. If you can drive one car, you can pretty much figure out how to drive any car (standard shift a potential impediment). All Clouds don’t drive the same way. To help clear the fog, PurposeFul Clouds created the Cloud Cube. We’ll start talking about the front face of the Cloud Cube: what is actually provided.
One important distinction among Cloud solutions is what exactly you are getting from the Cloud. This is usually identified as XaaS for something “as a service.” The most common “something”s are Infrastructure as a Service (IaaS) and Software as a Service (SaaS).
Infrastructure as a Service is a provisioning model where you outsource the equipment used to support some or all of your IT operations, including storage, hardware, servers and networking components. Your service provider owns the equipment and is responsible for housing, running and maintaining it, and you typically pay on a per-use basis. You are still responsible for all of the software that runs on that infrastructure. The flour mill scenario described above is an example of IaaS. You outsource the means to spin the grind stone, but you still own and manage the grindstone, the wheat and the flour. You pay for use on an IT basis, paying for the use of physical things like the number and size of servers actually used, the amount of storage used, and perhaps even the amount of network data to support your organization.
Software as a Service is a provisioning model where you outsource not only the infrastructure but also the actual application. The payroll scenario described above is an example of SaaS. You not only don’t have the IT infrastructure, you also don’t control the application. You simply use it, and pay on a more business oriented measure, like the number of payroll checks or direct deposits generated.
Platform as a Service is infrastructure as a service plus the operating system and other components to support the end-to-end life cycle of developing, testing, deploying and hosting web applications to fully leverage existing services within the Cloud. The actual applications are still yours, but you aren’t worried about the things like the operating system “patch of the month club.”
Is the Cloud something new, or just a logical extension of managed services? Yes, and yes. The Cloud is clearly an extension of managed services, but it also offers some very interesting new opportunities to address aggravation, accounting and agility issues.
Is it just the latest IT fad? No. It will evolve, but the Cloud is here to stay. As one data point from a respected IT research and advisory company, Gartner says that “Cloud Computing will help 20% of businesses eliminate hardware infrastructure by 2012.”
The last word:
Hopefully we now know why and what, and maybe a little of how. Next time we’ll talk more about the “how” and start talking about some factors that can cause a bumpy ride. If you want a quick reference to the Cloud acronyms, check out the PurposeFul Clouds™ Cloud Glossary.
Keep your sense of humor.