This seems like an odd question to ask since you probably already have some concept of "the cloud." However, given some of the conversations I have been having recently, I think there's a good deal of cloudy thinking about cloud computing.
So here is the gist of what the cloud is (imho) summed up for you in a set of bullet points:
"Cloud Computing" is currently a marketing term. And that's why I'm writing this; to divorce the use of Cloud Computing, the marketing term, from the use of Cloud Computing as an architectural idea. Marketing terms don't have to conform to precise definition. They get used, then abused, then severely exploited and finally, as their bandwagon grinds to a halt, they get pitched onto the sorry stack of broken buzz words. That's what happened to "eBusiness", "Web Services", "On Demand" and so on. Until the recession began in earnest Cloud Computing was a reasonably sane marketing term. That's now changing because, in the minds of the IT audience, the cost of cloud computing is lower. That makes cloud the hype-word du jour.
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Cloud Computing is NOT SaaS (Software As A Service). I'm making this point because some commentators have been equating these two ideas as if they were identical. SaaS is healthy terminology. SaaS is out-hosted software that you can access directly. Although you might not think of it as such, your electronic banking capability is SaaS - you just don't pay for it directly. As such electronic banking is no different to Zoho or Google Apps. However, electronic banking is definitely not Cloud Computing, no matter how much you stretch the definition.
Cloud Computing Is Not About Emulating Google It looks suspiciously like the initial enthusiasm for cloud computing as a technology strategy was prompted by Google envy. Google was doing something unprecedented in building huge data centers to support its business. It was clearly a fact that Google's operation was highly efficient and some CIOs mused about whether they could emulate Google. Actually there was no chance, because Google's business was defined by just two uncommon transactions: searching the web and placing adverts. Google designed a huge massively parallel operation using computer servers and switches they built themselves within an architecture that was optimized for precisely that workload. You can't emulate that unless, like some social networking sites, you have a small variety but very large numbers of transactions. As you might expect, some social networking sites have emulated Google.
Cloud Computing Is About Technology Stacks Cloud computing is about technology stacks in the same way that the ISP business is about technology stacks. In general ISP deliver a consistent service to the myriads of web sites they host by employing a standard technology stack, most commonly, the LAMP (Linux Apache, MySQL, PHP) stack. This means that management effort is minimal because everyone is running the same application (a web site) with the same technology (LAMP) and, where customers do have problems, they will normally be the same issues cropping up time and again.
Cloud Computing Is About Economies of Scale The only thing that everyone seems to agree upon about Cloud Computing is that it is constructed for scale and that it is hosted on a set of resources that are distinct from the typical IT network. In other words within "the cloud" there is an architectural attempt to build for scale. Most cloud offerings are going to be based upon scalability. The truth is that if you plan to have a very large data center and you organize its use so that most of the workloads are very similar, or better, identical, then you will achieve significant economies of scale. You will then be able to offer the service at prices that undercut the customer's costs of running the application in-house. The more customers you achieve the better the cost advantage.
Cloud Computing Is Not Outsourcing The typical corporate data center is not a cloud and will never become one. Its workloads are mixed the platforms they run on are mixed - the whole technology stack is mixed. That means you cannot transform the whole data center into a cloud operation. However, you can outsource it.
Are There Any Clouds Computing Standards? Not really, or perhaps better to say "not yet." In general cloud computing infrastructure is built on servers that employ virtualization technology to deliver efficient resource utilization and typically, abide by open standards and, for the sake of economy, use open source software extensively. There is an organization formed by a group of universities, called the Open Cloud Consortium (OCC), which is promoting open frameworks that will let clouds operated by different organizations work together seamlessly.
Is there Such A Thing As An Internal Cloud? Again, not really, or perhaps better said "not yet." There is sense in organizations creating "domains" within their own networks that are built on cloud-type architectures, especially if they have applications that may need to scale over time. If cloud standards existed then such domains could be thought of as Internal Clouds. They would become staging areas for possibly moving internal applications into the cloud, or if the organization has its own software that it intends to offer as a service, then such a domain could become the platform for providing that service.
Is Cloud Computing Anything To Do With Web 2.0? No nothing at all. But you can make the connection if you want to. Many web sites that are said to be Web 2.0, primarily because they are social networking sites, have had to scale up dramatically when their user population shot into the millions. Because of that they have had to adopt highly scalable architectures (or die). Because they have such architectures they may be in a good position to offer some services to users in the manner of cloud computing.
Do Clouds Offer Guaranteed Service Levels? The answer to this is "yes" or at least it should be, and in the future it surely will be. We have to exclude free services, like Yahoo Mail and many of Google's services, which can be described as Cloud Computing from most perspectives, because a free service is never going to offer guarantees (even if it makes an excellent living from adverts.) But Cloud Computing will ultimately be defined, from the user's perspective, by service levels and the nature of the service itself. If Cloud Computing Services are well defined in that way, then it becomes possible to compare such services with the cost of providing a similar capability from your own data center - as long as the Cloud Computing provider is transparent in providing details of the technology that it deploys.
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