Cloud computing: special report

Cloud computing could be as important, and as game changing, as the first PCs. So how should businesses use the cloud, how should they prepare for it, and who are the vendors to watch? By Stephen Pritchard.

Netsuite

Amazon's EC2

Rackspace

What does cloud computing mean to businesses?

Cloud computing is more than a technical innovation. Businesses are starting to move towards the cloud because it is more flexible, quicker to deploy and can be cheaper than conventional methods for deploying software and running business applications.

Some of the technologies driving cloud computing are not entirely new: the idea of sharing computer capacity dates back to the mainframe service bureaux in the 1960s.

What is new, however, is the change in both the technology being used for sharing computing power, and the economic climate. For cloud service providers, the ability to virtualise low-cost "x86" servers and storage is critical to the ability to offer cost-effective cloud computing, by allowing providers to share equipment between customers and, depending on the type of service, run anything from a single application to an entire, virtual server.

Using standard platforms, rather than mainframes, also widens the choice of applications and development environments available to businesses wanting to use the cloud.

This change in the economics of cloud computing has come about at the same time as when many businesses are facing significant financial pressures. The move to cloud computing may have some technical advantages over in-house IT solutions, but companies that have made the switch often cite the way that cloud computing allows them to move from up-front capital spending (capex), to operational spending (opex).

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