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What is Cloud Computing and Why is it Important?

In order to understand the core principles of an open cloud, we need to first level set on some basic definitions and concepts of cloud computing itself. First, what is the cloud? The architecture and terminology of cloud computing is as clearly and precisely defined as, well, a cloud. Since cloud computing is really a culmination of many technologies such as grid computing, utility computing, SOA, Web 2.0, and other technologies, a precise definition is often debated.

While definitions, taxonomies and architectures are interesting, it is more important to understand the value propositions for cloud computing. We need to understand how suppliers of cloud technology will come together to deliver on the promise of cloud computing. The key characteristics of the cloud are the ability to scale and provision computing power dynamically in a cost efficient way and the ability of the consumer (end user, organization or IT staff) to make the most of that power without having to manage the underlying complexity of the technology. The cloud architecture itself can be private (hosted within an organization’s firewall) or public (hosted on the Internet). These characteristics lead to a set of core value propositions:

Scalability on Demand

All organizations have to deal with changes in their environments. The ability of cloud computing solutions to scale up and down is a major benefit. If an organization has periods of time in which their computing resource needs are much higher or lower than normal, cloud technologies (both private and public) can deal with those changes. The organization pays for the IT resources it actually uses; it does not have to maintain multiple sets of artificially high levels of resources to handle peak demands.

Streamlining the Data Center

An organization of any size will have a substantial investment in its data center. That includes buying and maintaining the hardware and software, providing the facilities in which the hardware is housed and hiring the personnel who keep the data center running. An organization can streamline its data center by taking advantage of cloud technologies internally or by offloading workload into the public.

Improving Business Processes

The cloud provides an infrastructure for improving business processes. An organization and its suppliers and partners can share data and applications in the cloud, allowing everyone involved to focus on the business process instead of the infrastructure that hosts it.

Minimizing Startup Costs

For companies that are just starting out, organizations in emerging markets, or even “Skunk Works” groups in larger organizations, cloud computing greatly reduces startup costs. The new organization starts with an infrastructure already in place, so the time and other resources that would be spent on building a data center are borne by the cloud provider, whether the cloud is private or public.

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