Cloud computing is an emerging paradigm computing concept that enables both information technology infrastructure and software to be delivered directly over the Internet as a service.
This arrangement, whereby companies can expand network capacity, and run applications directly on a vendor’s network, offers a host of advantages with the most primary being radically lower IT costs.
The lower budgetary requirements and commitments allow even smaller companies to piece together an IT project without spending on purchasing legacy server, and storage systems. Additionally, the burden of developing and maintaining the technological expertise required in running the network is transferred to the service provider. The pay-per-use basis of cloud computing helps transform the way IT departments create and deploy customized applications during these difficult times.
By offering a more cost-effective, less risky, and fundamentally faster alternative to on-site application developments, cloud computing is poised to transform the economics of information technology in the next few years.
With the Internet being a foundation for cloud computing, the term “cloud” is used as a metaphor for the Internet. Thanks to new and improved networks, the Internet is fast emerging into vehicle for delivering computational requirements. The ubiquity of the Internet and the widespread availability of high-speed broadband access are the primary factors driving the movement towards the cloud. Although still a small percentage of the total IT spends, cloud services are strong drivers of incremental growth.
The recent economic recession saw hordes of companies take to cloud computing as a cost saving strategy. Cloud computing came as a boon for companies during tough economic and financial climate, given that the technology can potentially slash IT costs by over 35%. The bad economy fed the global cloud computing services market as cash, and revenue starved companies prowled for IT solutions that are cost-effective, require minimum to zero investments, and low management of computing resources.
Technically, the feature of multi-tenancy, or the ability to scale up or scale down services on demand, makes fiscal sense in tough economic climate. And with cloud computing fitting the bill in every respect, the business case for the technology stands exemplified. In short, recession became the push factor, which tripped the market into the mass adoption stage.
As the world economy navigates its way through recession and towards recovery, organizations will still retain their appetite for cost effective solutions, but will however demand more value-creating productivity. Against this backdrop, cloud computing stands poised for post recession boom. Shifting priorities among limited budgetary constraints will make it critical for market participants to closely follow spending patterns to understand areas where companies will be spending their precious funds. Given the fact that cloud computing services help companies scale up or scale down their computing requirements and resources through public, private and hybrid clouds, the value proposition offered is overwhelming. Companies that will consume the most cloud services are expected to be those operating in a commoditized business
environment where constant product differentiation is a perennial need.