All businesses have one thing in common: they are continually looking for ways to reduce costs while operating as efficiently as possible. Cloud computing is becoming the solution for many businesses to reach their immediate objectives on a global scale.


Cloud Computing and the Internet

Cloud computing uses the internet as a bridge to allow communication and collaboration to be done between consumers and companies who need to access multiple applications over a connected network. Through this form of technology, cloud computing eliminates the need for further hardware or software installation and subsequent maintenance.


Cloud Computing Technology is Comprised of Three Core Aspects

Infrastructure as a Service(IaaS) enables software developers and vendors to host their applications to their end users on the Internet, such as IaaS provider Amazon. Software as a Service Model(SaaS) gives customers access to software applications without having to purchase these applications through a web browser and is usually offered as a pay-per-month subscription. Vendors like NetSuite, Google and already use SaaS extensively as a valid business model. Platform as a Service (PaaS) helps software developers develop and host new software via the Internet without having to purchase new software or hardware. Two widely known PaaS providers are Google Apps and Microsoft Azure.


Companies Need to be Aware of Risk Factors

Risks may occur when making a transition from traditional communication and data storage methods to cloud computing. As adoption levels increase and pull in more and more strategic and core applications and systems, the more cyber attacks will be focused on cloud computing technology. Data loss, privacy risks, legal and regulatory compliance (as well as making the cloud work with network infrastructure in existing data centers) are key security challenges that companies will need to address and are critically important to master since these factors can threaten the business benefits and return on investment of the cloud. The average savings for a company’s applications hosted in external public clouds would be between 30 to 50 percent.


Energy Use and Administration Costs

The average corporate data center has a 2.5 Power Usage Effectiveness (PUE) while leading cloud data centers operate at around 1.2 PUE, so it’s not surprising how switching cloud computing could be cost effective. More than half of today’s organizations have significantly changed the way they are using their data center resources. Upfront costs for server or OS licenses, hardware and software can easily total into hundreds of thousands of dollars to implement. As a result, many organizations are re-evaluating their options to initiate deployment of their apps.

Although many organizations remain confident in the security of cloud providers, cloud computing poses major challenges. A large corporation cannot put everything on the cloud, as this would cripple their infrastructure. Aside from reducing costs and enhancing efficiencies, companies need to focus on developing and delivering an integration capability within their IT departments that will create a seamless transition over to cloud computing technology to achieve long term success and address security issues effectively.

The preceding article was written by Thomas Jay, blogger at SQL Solutions. SQL Solutions is a leading provider of SQL Server consulting, SQL Server performance and remote DBA services for Microsoft SQL Server.