Most industries introduce new concepts every now and then in order to create interest and boost demand. For instance, over the years the auto industry introduced new ideas like turbo charger, fuel injection, ABS break and parking sensors. Each new innovation usually comes with a bit of hype but eventually many of them become part of the norm and the industry moves on to new innovations.

The IT industry is different in that not all of its fashionable ideas last for long before they simply disappear from the IT vocabulary. I guess you can say that the IT industry is closer to the fashion industry than it is to the auto industry in this regard. Some of us may still remember the ISO OSI communications model (that was meant to replace TCP/IP and never did), many would remember how client server was touted by each and every vendor as the solution to all our IT problems, where is client server now? More recently SOA (Service Oriented Architecture) became the buzzword yet many bloggers already started saying that SOA is dead. In all fairness SOA looked and still looks very credible when used in the right context, I think it will stay with us for some time although it might lose some of its glamour or get folded under some other fashionable name.

Well this time the new buzzword is cloud computing, if you Google it you will get some 20 million search hits! So what is cloud computing?

One definition is that it is a style of computing in which dynamically scalable and often virtualized resources are provided as a service over the internet where users need not have knowledge of, expertise in, or control over the technology infrastructure “in the cloud” that supports them.  But what is more important to you and me is the definition of cloud services because we may potentially use them. IDC defined cloud services as “consumer and business products, services and solutions that are delivered and consumed in real time over the internet”.

OK enough with definitions, let us examine some of the types of applications and services that lend themselves to cloud computing. The most suitable applications to be delivered through the web are those that require minimal configuration, things like email, customer relationship management (CRM), and potentially enterprise resource planning (ERP).

This is especially important to small and medium enterprises (SMEs) because for the first time they have the ability to use the most advanced applications without having to build expensive infrastructure (large computers, mass storage or disaster recovery sites) and employ an army of IT technical staff.  

For example a small company deploys an email service for its employees but its email service is hosted by a software as a service (SaaS) provider. The service is provided on subscription basis, a monthly fee per user. It is subject to certain limitations like storage capacity per email account. The service is also bound by a service level agreement (SLA) where the service provider guarantees such things like speed, security, bandwidth, maximum downtime, software updates and help desk response time. That is a traditional SaaS service that many SMEs are already using.

Now let us see how this scenario changes in an ideal cloud computing world. The SaaS provider may host your email on one server, ten server or fifty server slices distributed over twenty servers located in several locations around the world; moreover the SaaS provider may change the distribution of those slices. They may allocate more processing power to your Dubai based organization in the morning at the expense of another customer who is based in Los Angeles and switch back at night. This allows the service provider to use its assets more efficiently potentially reducing his and your cost. If your need for processing power or storage capacity increases, the service provider can very easily and quickly provision or allocate them to you. Again you don’t need to know or worry about the location, type or technology used to provide those resources, you know that as your needs grow (or shrink) you pay for what you use. That is why cloud computing is said to be dynamically scalable and often virtualized.

So who knows cloud computing may not be one of those fashionable ideas that will die tomorrow! SMEs should consider cloud computing based SaaS offering because of the model’s inherent economics as well as its ability to provide such companies with access to world class applications that they would not normally be able to acquire, staff, run or afford. I would say you should start with email followed by CRM.

I know, you will say, what about information security or what about availability of those systems, how can I trust them. My answer is that any credible SaaS provider will offer better security and availability than your own small IT department. After all companies like Haagen-Dazs, Starbucks, Yamaha Corporation of America, E*TRADE FINANCIAL, AMD, Canon Marketing Japan, Cisco, Dell, Motorola, Allianz Insurance, CNN Networks, Dow Jones Newswires, Google, The Wall Street Journal, Symantec and Toyota Motor Europe are already using SaaS and you can find their success stories published on the internet. Surely they had similar concerns and definitely they managed to overcome their fear. You can too.