In a traditional information technology asset acquisition model, you would purchase or lease hardware for placement in your own facility, or a leased facility under your control. For software, you would purchase licenses, either for perpetual use or for a fixed term. In addition, you would pay for maintenance and support on the hardware and software on a recurring basis for the useful life of the product at a cost annually of about 20-25% of the original purchase. In this model, you typically have a large capital cost for a product that continually diminishes both in terms of a financial and technological value.
In Cloud Computing, software and hardware are offered as a service by the technology provider, and the technology is typically (not always) installed and running at the technology provider's data center, not in your local data center. Instead of purchasing or leasing the technology, you subscribe to use it. The subscription cost is typically on a monthly basis, and covers all use, hosting, maintenance and support, as well as technology upgrades. Therefore, you do not have a large upfront (or recurring) capital expense. Instead, you have a recurring operating expense which can often be more cost effective.
What has allowed Cloud Computing to become more prevalent over the past few years is a result of an improved and more readily available high speed, high bandwidth internet. Internet Service Providers now offer high bandwidth internet connections at very reasonable costs. Many organizations need the high bandwidth internet connections to support the large amount of data transferred between the technology provider and their organization.
Cloud Service Models
Infrastructure as a Service (IaaS) - The service provider hosts servers, storage and other hardware, mostly virtually, with all hardware supporting services. The provided servers will host and run user applications and the service provider will handle all tasks related to system management, monitoring, maintenance, backup and resiliency planning for the subscribed infrastructure.Platform as a Service (PaaS) - The service provider delivers hardware and software tools needed for application development. A PaaS provider hosts the hardware and software on its own infrastructure. As a result, PaaS frees users from having to install in-house hardware and software to develop or run a new application.Software as a Service (SaaS) - The service provider distributes software (programs/apps) via their own hosted environment and makes the software available to clients over a network, typically the Internet. In addition, they include all support and upgrades for the subscribed software.
How Cloud Computing is Offered
Public Cloud - The service provider makes the technology, such as software applications and hardware, available to their clients over the Internet. The clients connect to the service provider's system to access the subscribed technology.
Private Cloud - Typically found in larger companies and organizations, the organization itself becomes the service provider. The organization's facility hosts and manages the technology and offers the services to their business groups. User costs are typically incurred and managed via internal budgeting practices.
Cloud Computing provides a simple way to access servers, storage, databases and a broad set of application services over the Internet. You would be wise to consider a Cloud Computing model when you need to replace or upgrade your technology. While there are many advantages to using or implementing a Cloud Computing methodology, I will address that in a future post.
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