Cloud Computing
From Entrepedia: The Entrepreneurship Wiki
Contents |
What is Cloud Computing?
Essentially, cloud computing refers to data and storage technology which takes place on the web as opposed to desktop machines and private servers. The idea is that instead of installing applications and storing documents on a desktop machine, users can store data and run applications on a web server which is located somewhere in the "cloud". One of the earliest and most widespread examples of the adoption of cloud computing, was the switch to web-based email services such as Hotmail and Google Mail.
But what is this cloud? The term cloud refers to a networked infrastructure of servers which provide storage and processing power. Users can store data and run applications on this network without having any knowledge of the infrastructure itself: it is all abstracted by, or hidden in, the cloud. Amongst other things, it offers Infrastructure as a Service (see the Wikipedia article), Platform as a Service (see the Wikipedia article) and Software as a Service.
Perhaps the most significant implication of this is that businesses can offer applications and services over the web without owning any hardware and without being locked into long-term, costly arrangements to lease servers. This means that starting a cloud computing based venture requires little or no capital expenditure and that the fixed costs associated with required capital become variable costs. Cloud services, such as storage on demand, are offered on a pay as you go basis: the arrangements are extremely flexible and businesses need only pay for the computing power and storage that is actually used. All this means that one of the significant barriers to entry for starting a business has been if not removed altogether, significantly lowered.
Criticisms
The cloud revolution has not been without its critics. Most criticisms centre around the dangers of putting all one's faith in third party suppliers to manage data and deliver services. Typically issues such as privacy and reliability are cited as examples of why care should be taken in entrusting companies such as Amazon with managing the storage and processing of important data, as mentioned by the journalist Bill Thomson in a BBC News article[1].
This would seem to be a valid point and something to be considered by businesses thinking about using cloud computing. Specifically, it raises the following questions:
- How secure will your data be?
- Who will have access to it?
- What sort of service level agreement is there?
- Is there any technical support to deal with outages?
But that's not all: cloud computing also raises the issue of being locked in to a provider of a proprietary infrastructure. Whilst the services offered by the cloud would seem to be inherently flexible, there are those who claim that this is not the case, and that the flexibility of the services offered hence the potential for creativity in developing business ideas, can be severely hindered by the proprietary nature of the cloud infrastructure. Richard Stallman himself, the veteran evangelist of free software has been one of cloud computing's most vociferous critics, going out of his way to urge people to avoid making use of cloud services:
- One reason you should not use web applications to do your computing is that you lose control. It's just as bad as using a proprietary program. Do your own computing on your own computer with your copy of a freedom-respecting program. If you use a proprietary program or somebody else's web server, you're defenseless. You're putty in the hands of whoever developed that software.[2].
So whilst it would seem that the possibilities offered by cloud computing are infinite, there are those who believe that this is not so and that there is still a case for the traditional model of web services where a business has a physical server somewhere with unlimited flexibility and a dedicated support team responsible for ensuring reliability.
Cloud Suppliers
The pioneer in the cloud computing field was Amazon, with its S3 (cloud storage) and EC2 (virtual server) services. Because of the high barriers to entry and considerable start-up costs involved in setting up cloud infrastructure, suppliers of cloud computing services are more often than not large, well established businesses. However the market has been growing more and more competitive and there are now a whole host of suppliers which offer cloud computing services. Some of the better established suppliers are:
- 3tera
- Amazon Web Services
- FlexiScale
- Microsoft Azure
- Mosso (Rackspace)
Before contracting cloud services be sure to investigate your supplier carefully: find out how they intend to bill you and at what rates, as well as how reliable their services are and what (if any) support is available in the event of an outage (See also Dean Miles's article Seven things you should ask a cloud computing vendor[3]).
Opportunities for Entrepreneurs
The new capabilities provided by cloud computing present considerable opportunities for the current generation of entrepreneurs: with low start up costs and little or no capital expenditure, it is an area in which it is relatively easy to develop a fledgling idea into a fully functioning web-service. What's more, the area has yet to mature and is still in the process of realizing its full potential; this means that whilst we can be sure that there are many opportunities out there, these are still waiting to be discovered and it will be the ability to discover and develop them successfully that will distinguish the successful entrepreneur.
Case Studies
- A.nnotate is a document annotation service which aims to facilitate collaboration in the production of large scale documents. Read the case study to find out how the business makes use of cloud computing to deliver its services.
