The Cloud

The Cloud, or Cloud Computing, allows software to be operated on the internet without needing to install the software on a phone, table or computer. Cloud computing comes in three forms: public, private, and hybrid.

The Cloud is, in fact, based on the older concept of Data Centres. Traditionally, a Data Centre is a large computer facility (warehouse) with electrical, soundproofing, and climate control (air conditioning) upgrades.

Data centres are “inward facing”, that is, the computers in the Data Centre allow the business to conduct Information Technology (IT) services from a centralised location. The Data Centre is usually operated by employees or contractors of the business that owns and/or operates the Data Centre.

The Cloud, on the other hand, consists of collections of Data Centres that are “outward facing”. That is, the Cloud consists of Data Centres that are provided for the benefit of customers rather than the Data Centre owner (generally for a fee).

The real benefit of the Cloud for customers (who are often Businesses themselves) is that Cloud resources can be ‘switched’ on and off as required. Fees only accrue when the Cloud service is switched ‘on’. Unlike a Data Centre, then, the Cloud allows customers to only pay for services as and when they are required.

As such, the Cloud acts like a Rent-a-Car company. The resources (cars) are always available for anyone that wants to pay a fee to use them. However, if a car (computer & software) is not being used it waits in a central location for the next customer. The customer uses the car (resource) but never owns it.

Further, the customer does not have to purchase, register, ensure, wash, maintain or store the car, but it remains waiting for when they are ready to use it.

A Cloud facility can be operated from one warehouse, but typically, large Cloud operators maintain facilities in at least three time zones: the Americas, Europe/Africa, and the Asia/Pacific. This is true of Amazon, Google, and Microsoft Azure. Additionally, such operators maintain more than one Data Warehouse in each time zone.

When the customer purchases Cloud services, these services do not necessarily reside on a single computer. A customer with limited needs (or limited means) might purchase 10% of an actual computer’s memory (RAM), 25 % of its processing power (chip or CPU), and 50% of its hard disk drive (HDD or storage). Indeed these three components may actually be located on one, two or three different computers.

When the Cloud customer purchases cloud services, they may in fact purchase components separately. The memory (RAM) and processor/chip are often purchased together in a product known as a Virtual Machine (VM) or “Compute” in Amazon. Storage is purchased separately, network services are purchased separately, and software is purchased separately again. So calculating Cloud costs from scratch can be quite difficult.

Both Cloud Business (Providers) and Cloud customers (Users) can take advantage of a system of Shared Services. Using  Shared Services (or Boundary-Less Computing), Cloud Providers can share resources with one another and with customers (users), Cloud customers share the Providers resources, and Business users can share resources with one another.

To exemplify the use of Shared Services, take a manufacturing supply chain case study. If we consider the businesses that supply raw materials, and parts and services, in addition to the manufacturer, warehousing, transport, distribution business, each of these companies can be served by one system in one location for all their Communications and Transactional needs. SugarCRM and provide such a cloud service, known as Software as a Service (SaaS). There is not need for any of the businesses in the supply chain to purchase their own computers, networks, and software, as each is provided in the Cloud (for a fee).

Moving to Cloud Services can have a positive effect on company finances. Under a Capital Expenditure Model (CAPEX)  where business buy their own computer hardware, tax advantages accrue over a period of years. Cloud Services, on the other hand, are considered as Services rather than Capital  and so the business can exploit the Operational Expenditure Model (OPEX) where tax advantages accrue annually.

Ultimately, considered and sensible Business decision-making will determine whether the Cloud is a sound investment for your company, and Airwaves Technology can help with this.

Contact us now!


Leave a Reply

Your email address will not be published. Required fields are marked *