The word ‘cloud’ became popular in the last couple of years, but the concept isn’t new. In the year 2000, it was called “hosting.” But let’s put the buzzword aside and focus on the transformational change that underlies it.
The power plant and public cloud parallel
History provides a great analogy that will help explain the cloud definition. If you look at photos of 1890s factories, they all seem to have water wheels or windmills. That’s because water or wind was the source of energy. Every single factory had to invest in people and infrastructure to harness this power. This was a steep barrier.
Then centralized municipal power plants came online. This allowed factories to get out of the business of power generation. They transformed the cost of energy from a steep capital investment into a simple cost-per-unit charge, and reinvested their capital into growing more competitive.
Public cloud infrastructure innovation
Fast forward 120 years, and that’s what’s happening in IT. In the recent past, organizations were forced to invest in on-premise servers and expertise. But the public cloud allows them to outsource their IT and transform a capital investment into a cost-per user or monthly charge.
This is as transformational as centralized power plants. And it allows businesses to scale dramatically by leveraging cloud infrastructure services that were otherwise entirely out of reach to all but the biggest companies.
Incidentally, it also allows the public cloud provider to innovate on behalf of millions of customers. Over the decades, utilities built far better tools for energy generation and transmission than individual companies ever could, while IT providers such as Intermedia innovate on a massive scale that individual IT teams could never achieve.
Cloud data services and user management
A variety of different types of cloud services have been shown to reduce cost while simultaneously improving efficiency, explains CIO. This works to the benefit of Small to Medium Businesses (SMBs), and enables them to streamline their business model.
"The findings were pretty telling in terms of the adoption of cloud computing and the benefits of cloud computing," explains John Engates, CTO of Rackspace Hosting, in an interview with CIO. "The bottom line is cloud saves companies money and increases their profits."