Cloud Computing

Cloud computing is a technology that uses the internet and central remote servers to maintain data and applications. Cloud computing allows consumers and businesses to use applications without installation and access their personal files at any computer with internet access. This technology allows for much more efficient computing by centralizing storage, memory, processing and bandwidth.

A simple example of cloud computing is Yahoo email or Gmail etc. You dont need a software or a server to use them. All a consumer would need is just an internet connection and you can start sending emails. The server and email management software is all on the cloud ( internet) and is totally managed by the cloud service provider Yahoo , Google etc. The consumer gets to use the software alone and enjoy the benefits. The analogy is , 'If you only need milk , would you buy a cow ?' All the users or consumers need is to get the benefits of using the software or hardware of the computer like sending emails etc. Just to get this benefit (milk) why should a consumer buy a (cow) software /hardware ?

Cloud computing is a paradigm shift following the shift from mainframe to client–server in the early 1980s. Details are abstracted from the users, who no longer have need for expertise in, or control over, the technology infrastructure "in the cloud" that supports them. Cloud computing describes a new supplement, consumption, and delivery model for IT services based on the Internet and it typically involves over the-Internet-provision of dynamically scalable and often virtualized resources.It is a byproduct and consequence of the ease-of-access to remote computing sites provided by the Internet.

The term "cloud" is used as a metaphor for the Internet, based on the cloud drawing used in the past to represent the telephone network, and later to depict the Internet in computer network diagram as an abstraction of the underlying infrastructure it represents. Typical cloud computing providers deliver common business applications online that are accessed from another Web service or software like a Web browser, while the software and data are stored on servers.

Most cloud computing infrastructure consists of services delivered through data centers and built on servers. Clouds often appear as single points of access for all consumers' computing needs. Commercial offerings are generally expected to meet quality of service (QoS) requirements of customers, and typically include SLAs. The major cloud-only service providers include Salesforce, Amazon and Google.

Characteristics
n general, Cloud computing customers do not own the physical infrastructure, instead avoiding capital expenditure by renting usage from a third-party provider. They consume resources as a service and pay only for resources that they use. Many cloud-computing offerings employ the utility computing model, which is analogous to how traditional utility services (such as electricity) are consumed, whereas others bill on a subscription basis. Sharing "perishable and intangible" computing power among multiple tenants can improve utilization rates, as servers are not unnecessarily left idle (which can reduce costs significantly while increasing the speed of application development). A side-effect of this approach is that overall computer usage rises dramatically, as customers do not have to engineer for peak load limits.[15] In addition, "increased high-speed bandwidth" makes it possible to receive the same response times from centralized infrastructure at other sites.

Economics

Cloud computing users can avoid capital expenditure (CapEx) on hardware, software, and services when they pay a provider only for what they use. Consumption is usually billed on a utility (resources consumed, like electricity) or subscription (time-based, like a newspaper) basis with little or no upfront cost. Other benefits of this time sharing-style approach are low barriers to entry, shared infrastructure and costs, low management overhead, and immediate access to a broad range of applications. In general, users can terminate the contract at any time (thereby avoiding return on investment risk and uncertainty), and the services are often covered by service level agreements (SLAs) with financial penalties.

According to Nicholas Carr, the strategic importance of information technology is diminishing as it becomes standardized and less expensive. He argues that the cloud computing paradigm shift is similar to the displacement of electricity generators by electricity grids early in the 20th century.

Although companies might be able to save on upfront capital expenditures, they might not save much and might actually pay more for operating expenses. In situations where the capital expense would be relatively small, or where the organization has more flexibility in their capital budget than their operating budget, the cloud model might not make great fiscal sense. Other factors impacting the scale of any potential cost savings include the efficiency of a company's data center as compared to the cloud vendor's, the company's existing operating costs, the level of adoption of cloud computing, and the type of functionality being hosted in the cloud.

Among the items that some cloud hosts charge for are instances (often with extra charges for high-memory or high-CPU instances); data transfer in and out; storage (measured by the GB-month); I/O requests; PUT requests and GET requests; IP addresses; and load balancing. In some cases, users can bid on instances, with pricing dependent on demand for available instances.

Cloud computing is broken down into three segments: "applications," "platforms," and "infrastructure." Each segment serves a different purpose and offers different products for businesses and individuals around the world.

Applications: It's all On Demand
So far the applications segment of cloud computing is the only segment that has proven useful as a business model.
On Demand software services come in a few different varieties which vary in their pricing scheme and how the software is delivered to the end users. In the past, the end-user would generally purchase a servers and is accessed by the end user over the internet. While this is the most common platform for On Demand software services, there are also some slightly different offerings which can be described as a hybrid of these two platforms. For instance, a program through which the end user pays a license fee, but then accesses the software over the internet from centralized servers is considered a hybrid service.

Who is Offering On Demand Software? - The companies below are already established in the On-Demand software or SaaS business. These companies charge their customers a subscription fee and in return host software on central servers that are accessed by the end user via the internet.

e.g. Google, Salesforce.com, NetSuite, Teleo etc..

Who is Offering Traditional Software? - The following companies have established themselves as traditional software providers. These companies sell licenses to their users, who then run the software from on premise servers.
e.g SAP. Oracle etc..

Platforms:
Many of the companies that started out providing On Demand application services have developed platform services as well. The platform segment of cloud computing refers to products that are used to deploy internet. NetSuite, Amazon, Google, and Microsoft have also developed platforms that allow users to access applications from centralized servers.

Active platforms - The following companies are some that have developed platforms that allow end users to access applications from centralized servers using the internet. Next to each company is the name of their platform.

* Google (GOOG) - Apps Engine
* Amazon.com (AMZN) - EC2
* Microsoft (MSFT) - Windows Live
* Terremark Worldwide (TMRK) - The Enterprise Cloud
* Salesforce.com (CRM) - Force.com
* NetSuite (N) - Suiteflex
* Rackspace Cloud - cloudservers, cloudsites, cloudfiles
* Metrisoft - Metrisoft SaaS Platform

Infrastructure:
The final segment in cloud computing, known as the infrastructure, is very much the backbone of the entire concept. Infrastructure vendors environments (such as Google gears) that allow users to build applications. Cloud storage, such as Amazon's S3, is also considered to be part of the infrastructure segment.

* Major Infrastructure Vendors - Below are companies that provide infrastructure services:
o Google (GOOG) - Managed hosting, development environment
o International Business Machines (IBM) - Managed hosting
o SAVVIS (SVVS) - Managed hosting
o Terremark Worldwide (TMRK) - Managed hosting
o Amazon.com (AMZN) - Cloud storage
o Rackspace Hosting (RAX) - Managed hosting & cloud computing


Key features
* Agility improves with users' ability to rapidly and inexpensively re-provision technological infrastructure resources.

* Cost is claimed to be greatly reduced and capital expenditure is converted to operational expenditure. This ostensibly lowers barriers to entry, as infrastructure is typically provided by a third-party and does not need to be purchased for one-time or infrequent intensive computing tasks. Pricing on a utility computing basis is fine-grained with usage-based options and fewer IT skills are required for implementation (in-house).

* Device and location independence:enable users to access systems using a web browser regardless of their location or what device they are using (e.g., PC, mobile). As infrastructure is off-site (typically provided by a third-party) and accessed via the Internet, users can connect from anywhere.

* Multi-tenancy enables sharing of resources and costs across a large pool of users thus allowing for:
o Centralization of infrastructure in locations with lower costs (such as real estate, electricity, etc.)
o Peak-load capacity increases (users need not engineer for highest possible load-levels)
o Utilization and efficiency improvements for systems that are often only 10–20% utilized.

* Reliability is improved if multiple redundant sites are used, which makes well designed cloud computing suitable for business continuity and disaster recovery. Nonetheless, many major cloud computing services have suffered outages, and IT and business managers can at times do little when they are affected.

* Scalability via dynamic ("on-demand") provisioning of resources on a fine-grained, self-service basis near real-time, without users having to engineer for peak loads. Performance is monitored, and consistent and loosely coupled architectures are constructed using web services as the system interface.One of the most important new methods for overcoming performance bottlenecks for a large class of applications is data parallel programming on a distributed data grid.

* Security could improve due to centralization of data, increased security-focused resources, etc., but concerns can persist about loss of control over certain sensitive data, and the lack of security for stored kernels. Security is often as good as or better than under traditional systems, in part because providers are able to devote resources to solving security issues that many customers cannot afford. Providers typically log accesses, but accessing the audit logs themselves can be difficult or impossible. Furthermore, the complexity of security is greatly increased when data is distributed over a wider area and / or number of devices.
* Maintenance cloud computing applications are easier to maintain, since they don't have to be installed on each user's computer. They are easier to support and to improve since the changes reach the clients instantly.
* Metering cloud computing resources usage should be measurable and should be metered per client and application on daily, weekly, monthly, and annual basis. This will enable clients on choosing the vendor cloud on cost and reliability (QoS).

Issues:
Privacy
The Cloud model has been criticized by privacy advocates for the greater ease in which the companies hosting the Cloud services control, and thus, can monitor at will, lawfully or unlawfully, the communication and data stored between the user and the host company. Instances such as the secret NSA program, working with AT&T, and Verizon, which recorded over 10 million phone calls between American citizens, causes uncertainty among privacy advocates, and the greater powers it gives to telecommunication companies to monitor user activity. While there have been efforts (such as US-EU Safe Harbor) to "harmonise" the legal environment, providers such as Amazon still cater to major markets (typically the United States and the European Union) by deploying local infrastructure and allowing customers to select "availability zones

Security
The relative security of cloud computing services is a contentious issue which may be delaying its adoption.[82] Some argue that customer data is more secure when managed internally, while others argue that cloud providers have a strong incentive to maintain trust and as such employ a higher level of security.