10 Cloud Computing Concepts Small Businesses Should Be Aware Of

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Cloud Computing has become the standard model for how personal, business, and enterprise users consume IT resources. Though firms of all sizes stand to benefit greatly from this new computing paradigms, startups and small businesses in particular are using the cloud to gain a competitive advantage.

By keeping IT costs down and reducing infrastructure maintenance requirements, smaller firms challenged with limited budget and manpower can focus time and money on growing their core business. Furthermore, by moving their IT infrastructure into the cloud, small businesses are empowered with access to best-in-breed hardware and software, unprecedented quality of service, and lower cost of ownership.

The following are 10 concepts that small businesses and startups should be aware of when it comes to cloud computing.

1. There are many definitions of cloud computing but NIST’s is the best.

The National Institute of Standards and Technology (NIST), founded in 1901 and now part of the U.S. Department of Commerce, is one of the oldest and most respected physical science laboratories and standards bodies. They’ve created perhaps the most accurate and concise description for cloud computing, defining it as

a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.

Fundamentally, cloud computing is an idea or a concept on which technologies are built. Or per NIST’s definition, the cloud is a model for consuming IT servicesas opposed to any one particular technology.

2. Unprecedented cost savings and quality of service can be achieved through the cloud’s time-sharing of IT resources.

Source: Mark Turnauckas / Flickr Creative Commons.
Source: Mark Turnauckas / Flickr Creative Commons.

It’s a little bit like that vacation property timeshare you went in on with the family: everyone gets a piece of that Maui condo for a fraction of the cost. Cloud computing gives the general public access to powerful computing resources on a metered, per use basis—you only pay for what you use, and the service is robust and reliable as quality is maintained and guaranteed by the provider.

3. End-users are not responsible for the configuration of the system that delivers the services.

Source: Tom Taker / Flickr Creative Commons.
Source: Tom Taker / Flickr Creative Commons.

In this sense, cloud computing services are analogous to a public utility electricity grid: you “plug-in” for your services, then “unplug” when no longer needed. Computation, software, data access, and storage services do not require end-user knowledge of the physical location of the resources.

4. Cloud Computing consists of 3 service models.

Source: pbxl.co.jp.

These are Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS).

5. SaaS is primarily used to describe end-user applications accessible via the cloud through a web browser or mobile device.

Source: Christiaan Colen / Flickr Creative Commons.
Source: Christiaan Colen / Flickr Creative Commons.

Email is the SaaS most widely used by the general public, though a wide variety of SaaS business and consumer applications are available these days.

6. PaaS provides an environment for software developers to build their applications and usually includes a suite of tools and libraries for doing so.

Source: Trev Grant / Flickr Creative Commons.
Source: Trev Grant / Flickr Creative Commons.

Application hosting and deployment is provided via PaaS, giving developers a foundation upon which to build their own SaaS.

7. IaaS represents the most basic service model of cloud computing, where server, storage, and network resources are delivered as a virtualized, horizontally-scaled resource.

Source: andrechinn / Flickr Creative Commons.
Source: andrechinn / Flickr Creative Commons.

Subsequent services at the PaaS and SaaS levels are built upon the underlying IaaS.

8. Cloud Computing consists of 4 deployment models.

Source: Kiran Kumar / Slideshare.com.
Source: Kiran Kumar / Slideshare.net.

These are public cloud, private cloud, hybrid cloud, and community cloud. As a small business, you will primarily be concerned with the public cloud—whether it be SaaS apps or cloud hosting services.

9. Cloud computing services can be scaled up or down based on your needs.

Source: S. Faric / Flickr Creative Commons.
Source: S. Faric / Flickr Creative Commons.

Computing resources in the cloud can scale up or scale down based on the user and organisational needs. Sudden peaks and bursts of activity will not compromise end-user experience—and as your business grows and expands, your cloud infrastructure can scale accordingly with ease. With this elasticity, your IT infrastructure can not only scale up, but also down, turning fixed costs into variable costs.

10. The cloud gives small firms unprecedented business agility by transforming CapEx into OpEx.

Source: 401(K) 2012 / Flickr Creative Commons.
Source: 401(K) 2012 / Flickr Creative Commons.

Small businesses using cloud computing technologies can reduce their capital expenditures (CapEx) and use operational expenditures (OpEx) for increasing their computing capabilities. With horizontal scaling and on-demand metered services that are “pay-as-you-go,” traditional infrastructure costs are effectively replaced with a flexible, dynamic variable cost model.

This ultimately translates to a lower barrier to entry due to the reduced cost of maintaining on-site hardware and software—a startup or small business can now compete on a level playing ground with larger firms with perhaps more capital for IT resources at their disposal.

In short, cloud computing saves small businesses time and money by reducing capital expenditures related to traditional IT infrastructure acquisition and maintenance. Lower technology expenses and increased scalability translates to freed-up resources that can be reallocated to building up a firm’s core competency or business.

 

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