It’s been awhile since I’ve seen as much discussion as I have recently about this new paradigm, cloud computing.  A couple of years ago the concept was floating on the horizon, but today you can’t really have a conversation about technology without its mention. 

A few months back I gave a speech at the EDIFICE meeting in Munich on how Microsoft is viewing cloud computing and what it might mean for businesses.  I learned then that confusion reigns: people’s concepts about it are very, shall we say, ‘cloudy’.

Maybe a few observations can shed some light.

Cloud computing and its applications to the high tech industry are still in their infancy. While the technology shows promise in some areas, it is true that new technologies are uncanny in their ability to defy early predictions.  After you first understood what the internet was, would you have guessed that it would spawn YouTube or hundreds of other sites? Who knows what the cloud will bring?

Which brings me to the next point: I don’t much care for the term ‘cloud computing.’ It’s imprecise.  Putting the several distinct technologies involved into one bucket obscures three important distinctions:

Software as a Service  (SAAS) has been around for some time now.  Any application that resides in the internet, and that you have very little control over except as a consumer, falls into this category.  Think of Microsoft Hotmail or Salesforce.com.

Infrastructure as a Service (IaaS) is different. IaaS is the hosting of virtual machines in a datacenter to run your applications.  The host provides the hardware and the virtualized instance, the customer the balance.  It’s been great because companies don’t have to buy hardware or provision the IT. IaaS allows IT to become an operating expense, not a capital expense.

Platform as a Service (PaaS) is an operating system model with its code written specifically for its platform.  PaaS makes new things possible, things that couldn’t be done in the IaaS model.

And sadly, even though I’ve broken the current cloud environment into three distinct categories, it’s really a bit messier. The point though is that it’s important to clarify which cloud model you’re talking about. Remember your science lessons? There’s stratus, cumulus and cirrus clouds. Think about how different and mixed they can be. The same is true here.

So why is there all this discussion around the cloud now?  There’s real convergence of business need with new technology trends. On the business side, high tech companies are working with increasingly distributed value networks and dynamic supply chains.  They’re selling into fragmented markets and pushing for ever lower costs.  On the technology side, advances in virtualization, security, and architecture (SOA) make the new model possible.  The application of technology to business need makes this space worth watching (and the fodder for future blogs)!

– Craig Rode