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WHAT IS CLOUD COMPUTING ?
IF you have used Gmail, or online photo sharing services Flickr, then you have used some aspects of cloud computing. When you used those online services, you stored email message documents or photos on devices that are not at your home, but on devices located somewhere else. That somewhere else is the cloud. Cloud computing breaks the bond between computing requirements and the need to own computing hardware. Like you accessed emails saved on Gmail's server-likely somewhere in the US or Europe- enterprises can rent/lease information technology infrastructure from services providers, access it over the internet and pay for it on the basis of use. They can also rent/lease software applications in a similar way.
WHY CLOUD ?
In the traditional model, enterprises used to spend a lot of money upfront to purchase hardware and software and then spend more on installing it, customizing it, upgrading it and maintaining it. In a cloud model, all of that is a services provider's worry. Enterprises get rid of the upfront costs as well as the headache of maintaining IT systems and software. The biggest advantage is for smaller firms and start-ups as they need not spend on buying expensive technology hardware.
DIFFERENT AVATARS
Enterprises could consolidate IT hardware and software from different departments into a common pool of software and hardware and provision the same to different users over the network. Such a scenario could be called a private could, as the infrastructure is used only by one organization. On the other hand, if the infrastructure acts as a common pool of hardware and software resources from which the services provider serves multiple clients, then it is called a public cloud. Further, depending on what aspect of IT infrastructure- software or hardware- is put on the cloud, such services have different names. For instance, if instead of buying stacks of CDs of Microsoft office, an enterprise decides to purchase the licence online, and access the software over the internet, it is often referred to as software-as-a-service or saas. If on the other hand it is the servers and storage that are put on the cloud, then it is referred to as infrastructure-as-a-service or Iaas.
CHALLENGES
The biggest challenge is security, closely followed by reliability. It is not easy for most enterprises, especially in the financial industry, to come to terms with accessing software online and saving data online. Moving data from their premises to elsewhere can even have competitive and/or regulator implications. Similarly, when hardware is located elsewhere, enterprises become jittery whether business continuity would be risked as they will have to depend on a third party to ensure smooth functioning of their core applications and services.