In a time where budgetary constraints are abound given the current economic climate, some companies are looking to capitalize on cloud computing as a way to access resources that are necessary to run their businesses with minimized costs. Cloud computing has only recently emerged as a ubiquitous term in the information technology forum during the last couple of years. IT powerhouses like Google and Amazon are a couple of early adopters that have locked into the concept of cloud computing. The generalized idea is that by minimizing the amount of IT resources that must be located in-house, efficiency and cost-saving benefits can be derived if computing resources are accessed only when needed.

If your respective college university was like mine, then there was probably a way to access the necessary software needed to complete a term paper, such as Microsoft Word, by remotely accessing a server that housed the software. In my time, this was called a Citrix server. As a starving student, I didn’t want to pay the inflated prices of productivity software even with associated student discounts. In addition, the thought of the Feds breaking down my door for downloading software from Bearshare was a little disconcerting even though “everybody was doing it.” Accessing a server via a secure internet connection allowed me to type a paper on Microsoft Word without having to purchase and install the software on my own machine. Cloud computing operates in this similar fashion.

In essence, cloud computing is the concept of looking at the internet as sort of a utility service. Unlike the utilities that we are familiar with such as gas and electricity, cloud computing provides virtual resources such as software that we can access when necessary. For example, if a company uses Microsoft Excel to compile financial and accounting data, they may log on to a third party provider that has the software available rather than having to pay expensive licenses in order to install the software on their own computers. By doing so, the company can minimize IT costs, not worry if their own computer hardware meets the necessary requirements to run the software, and be able to access the software they only need occasionally on demand. In addition, this same company wants to house the financial data in a secure environment, but does not want to deal with the costs that are associated with procuring the proper equipment that will house the data. The company is also limited on physical space so housing large servers that will compensate employee workstations is not an option. Furthermore, the company does not want to allocate further funds into hiring professionals that are in charge of maintaining the data warehouses. With cloud computing, the company can hire a third party to develop the solutions they are looking for while addressing their primary concerns. The cloud computing company can build servers to house the data as well as provide the necessary technical support to maintain the servers and implement security measures to safeguard the data.

These third party companies that sell the products and services necessary to take advantage of cloud computing are simply known as cloud computing vendors. Familiar companies like Dell and HP are offering cloud computing services that range from simple applications such as providing software access to serving more complex needs such as providing expansive data warehousing capabilities on custom built servers, similar to the aforementioned example. Cloud computing is not relegated to IT gargantuans as a number of startup companies are also utilizing the concept to run their businesses or incorporate the cloud computing architecture as part of their business models.

While still in its infancy, the benefits of cloud computing are becoming more prominent as businesses seek to cut costs, especially in a faltering economy. However, there are some risks to cloud computing; the biggest one being security. Without the ability to maintain the data at their physical locations, companies may feel that they have no control over data security. When using cloud computing services, companies should verify that the provider is taking the proper security measures to protect the data. The last thing a company would want is to have confidential information about a product release fall into the hands of a competitor or have customer information retrieved by a hacker.

So while it is necessary to run companies with electricity for machines, the internet is becoming a more viable utility as the use of cloud computing grows. In tough times, while the current outlook may not be so bright, sometimes a little cloudiness is a good thing.