Cloud Computing

MUST READ: The CIO has a new set of priorities and problems: Here's what's on their to-do list
What is cloud computing? Everything you need to know about the cloud explained
Updated: An introduction to cloud computing right from the basics up to IaaS and PaaS, hybrid, public, and private
cloud, AWS and Azure.
By Steve Ranger | December 13, 2018 -- 12:24 GMT (04:24 PST) | Topic: Cloud
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What is cloud computing, in simple terms?
Cloud computing is the delivery of on-demand computing services -- from applications to storage and processing power -- typically
over the internet and on a pay-as-you-go basis.
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How does cloud computing work?
Rather than owning their own computing infrastructure or data centers, companies can rent access to anything from applications
to storage from a cloud service provider.
One benefit of using cloud computing services is that firms can avoid the upfront cost and complexity of owning and maintaining
their own IT infrastructure, and instead simply pay for what they use, when they use it.
In turn, providers of cloud computing services can benefit from significant economies of scale by delivering the same services to a
wide range of customers.
What cloud computing services are available?
Cloud computing services cover a vast range of options now, from the basics of storage, networking, and processing power
through to natural language processing and artificial intelligence as well as standard office applications. Pretty much any service
that doesn't require you to be physically close to the computer hardware that you are using can now be delivered via the cloud.
What are examples of cloud computing?
Cloud computing underpins a vast number of services. That includes consumer services like Gmail or the cloud back-up of the
photos on your smartphone, though to the services which allow large enterprises to host all their data and run all of their
applications in the cloud. Netflix relies on cloud computing services to run its its video streaming service and its other business
systems too, and have a number of other organisations.
Cloud computing is becoming the default option for many apps: software vendors are increasingly offering their applications as
services over the internet rather than standalone products as they try to switch to a subscription model. However, there is a
potential downside to cloud computing, in that it can also introduce new costs and new risks for companies using it.
Why is it called cloud computing?
A fundamental concept behind cloud computing is that the location of the service, and many of the details such as the hardware or
operating system on which it is running, are largely irrelevant to the user. It's with this in mind that the metaphor of the cloud was
borrowed from old telecoms network schematics, in which the public telephone network (and later the internet) was often
represented as a cloud to denote that the just didn't matter -- it was just a cloud of stuff. This is an over-simplification of course; for
many customers location of their services and data remains a key issue.
What is the history of cloud computing?
Cloud computing as a term has been around since the early 2000s, but the concept of computing-as-a-service has been around
for much, much longer -- as far back as the 1960s, when computer bureaus would allow companies to rent time on a mainframe,
rather than have to buy one themselves.
These 'time-sharing' services were largely overtaken by the rise of the PC which made owning a computer much more affordable,
and then in turn by the rise of corporate data centers where companies would store vast amounts of data.
But the concept of renting access to computing power has resurfaced again and again -- in the application service providers, utility
computing, and grid computing of the late 1990s and early 2000s. This was followed by cloud computing, which really took hold
with the emergence of software as a service and hyperscale cloud computing providers such as Amazon Web Services.
How important is the cloud?
Building the infrastructure to support cloud computing now accounts for more than a third of all IT spending worldwide, according
to research from IDC. Meanwhile spending on traditional, in-house IT continues to slide as computing workloads continue to move
to the cloud, whether that is public cloud services offered by vendors or private clouds built by enterprises themselves.
451 Research predicts that around one-third of enterprise IT spending will be on hosting and cloud services this year "indicating a
growing reliance on external sources of infrastructure, application, management and security services". Analyst Gartner predicts
that half of global enterprises using the cloud now will have gone all-in on it by 2021.
According to Gartner, global spending on cloud services will reach $260bn this year up from $219.6bn. It's also growing at a faster
rate than the analysts expected. But it's not entirely clear how much of that demand is coming from businesses that actually want
to move to the cloud and how much is being created by vendors who now only offer cloud versions of their products (often
because they are keen to move to away from selling one-off licences to selling potentially more lucrative and predictable cloud
subscriptions).
Predictions for cloud computing revenues to 2021 from 451 Research.
Image: 451 Research
What is Infrastructure-as-a-Service?
Cloud computing can be broken down into three cloud computing models. Infrastructure-as-a-Service (IaaS) refers to the
fundamental building blocks of computing that can be rented: physical or virtual servers, storage and networking. This is attractive
to companies that want to build applications from the very ground up and want to control nearly all the elements themselves, but it
does require firms to have the technical skills to be able to orchestrate services at that level. Research by Oracle found that two
thirds of IaaS users said using online infrastructure makes it easier to innovate, had cut their time to deploy new applications and
services and had significantly cut on-going maintenance costs. However, half said IaaS isn't secure enough for most critical data.
What is Platform-as-a-Service?
Platform-as-a-Service (PaaS) is the next layer up -- as well as the underlying storage, networking, and virtual servers this will also
include the tools and software that developers need to build applications on top of: that could include middleware, database
management, operating systems, and development tools.
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Software-as-a-Service (SaaS) is the delivery of applications-as-a-service, probably the version of cloud computing that most people
are used to on a day-to-day basis. The underlying hardware and operating system is irrelevant to the end user, who will access the
service via a web browser or app; it is often bought on a per-seat or per-user basis.
According to researchers IDC SaaS is -- and will remain -- the dominant cloud computing model in the medium term, accounting
for two-thirds of all public cloud spending in 2017, which will only drop slightly to just under 60% in 2021. SaaS spending is made
up of applications and system infrastructure software, and IDC said that spending will be dominated by applications purchases,
which will make up more than half of all public cloud spending through 2019. Customer relationship management (CRM)
applications and enterprise resource management (ERM) applications will account for more than 60% of all cloud applications
spending through to 2021. The variety of applications delivered via SaaS is huge, from CRM such as Salesforce through to
Microsoft's Office 365.
Cloud computing benefits
The exact benefits will vary according to the type of cloud service being used but, fundamentally, using cloud services means
companies not having to buy or maintain their own computing infrastructure.
No more buying servers, updating applications or operating systems, or decommissioning and disposing of hardware or software
when it is out of date, as it is all taken care of by the supplier. For commodity applications, such as email, it can make sense to
switch to a cloud provider, rather than rely on in-house skills. A company that specializes in running and securing these services is
likely to have better skills and more experienced staff than a small business could afford to hire, so cloud services may be able to
deliver a more secure and efficient service to end users.
Using cloud services means companies can move faster on projects and test out concepts without lengthy procurement and big
upfront costs, because firms only pay for the resources they consume. This concept of business agility is often mentioned by cloud
advocates as a key benefit. The ability to spin up new services without the time and effort associated with traditional IT
procurement should mean that is easier to get going with new applications faster. And if a new application turns out to be a wildly
popular the elastic nature of the cloud means it is easier to scale it up fast.
For a company with an application that has big peaks in usage, for example that is only used at a particular time of the week or
year, it may make financial sense to have it hosted in the cloud, rather than have dedicated hardware and software laying idle for
much of the time. Moving to a cloud hosted application for services like email or CRM could remove a burden on internal IT staff,
and if such applications don't generate much competitive advantage, there will be little other impact. Moving to a services model
also moves spending from capex to opex, which may be useful for some companies.
Business continuity is the ultimate killer application for cloud

It's official: Supercomputing is now ho-hum (thanks, cloud)
Cloud computing advantages and disadvantages
Cloud computing is not necessarily cheaper than other forms of computing, just as renting is not always cheaper than buying in
the long term. If an application has a regular and predictable requirement for computing services it may be more economical to
provide that service in-house.
Some companies may be reluctant to host sensitive data in a service that is also used by rivals. Moving to a SaaS application may
also mean you are using the same applications as a rival, which may make it hard to create any competitive advantage if that
application is core to your business.
While it may be easy to start using a new cloud application, migrating existing data or apps to the cloud may be much more
complicated and expensive. And it seems there is now something of a shortage in cloud skills with staff with DevOps and multi-
cloud monitoring and management knowledge in particularly short supply.
In one recent report a significant proportion of experienced cloud users said that they thought upfront migration costs ultimately
outweigh the long-term savings created by IaaS.
And of course, you can only access your applications if you have an internet connection.
What is cloud computing adoption doing to IT budgets?
Cloud computing tends to shift spending from capital expenditure (CapEx) to operating expenditure (OpEx) as companies buy
computing as a service rather than in the form of physical servers. This may allow companies to avoid large increases in IT
spending which would traditionally be seen with new projects; using the cloud to make room in the budget may be easier than
going to the CFO and looking for more money.
"CIOs are increasingly turning to cloud infrastructure and services in order to increase flexibility and relieve pressure on capital
budgets," notes ZDNet's survey of IT budget predictions. Of course, this doesn't mean that cloud computing is always or
necessarily cheaper that keeping applications in house; for applications with a predictable and stable demand for computing
power may be cheaper (from a processing power point of view at least) to keep in-house.
Cloud computing spending is growing even faster than expected
How do you build a business case for cloud computing?
To build a business case for moving systems to the cloud you first need to understand what your existing infrastructure actually
costs. There's a lot to factor in: obvious things like the cost of running a data centers, and extras such as leased lines. The cost of
physical hardware -- servers and details of specifications like CPUs, cores and RAM, plus the cost of storage. You'll also need to
calculate the cost of applications -- whether you plan to dump them, re-hosting them in the cloud unchanged, completely
rebuilding them for the cloud or buying an entirely new SaaS package each option will have different cost implications. The cloud
business case also needs to include people costs (often second only to the infrastructure costs) and more nebulous concepts like
the benefit of being able to provide new services faster. Any cloud business case should also factor in the potential downsides,
including the risk of being locked into one vendor for your tech infrastructure.
Cloud computing: How to build a business case

Cloud computing: What it's like to make the move
Cloud computing adoption
It's hard to get figures on how companies are adopting cloud services although the market is clearly growing rapidly. One set of
research suggests that around 12% of businesses consider themselves to be 'cloud-first' organisations, and about a third run some
kind of workloads in the cloud -- while a quarter of firms insist they will never move on-demand.
However, it may be that figures on adoption of cloud depend on who you talk to inside an organisation. Not all cloud spending will
be driven centrally by the CIO: cloud services are relatively easy to sign up for, so business managers can start using them, and
pay out of their own budget, without needing to inform the IT department. This can enable businesses to move faster but also can
create security risks if the use of apps is not managed.
Adoption will also vary by application: cloud-based email -- is much easier to adopt than a new finance system for example.
Research by Spiceworks suggests that companies are planning to invest in cloud-based communications and collaboration tools
and back-up and disaster recovery, but are less likely to be investing in supply chain management.
What about cloud computing security?
Certainly many companies remain concerned about the security of cloud services, although breaches of security are rare. How
secure you consider cloud computing to be will largely depend on how secure your existing systems are. In-house systems
managed by a team with many other things to worry about are likely to be more leaky than systems monitored by a cloud
provider's engineers dedicated to protecting that infrastructure.
However, concerns do remain about security, especially for companies moving their data between many cloud services, which has
leading to growth in cloud security tools, which monitor data moving to and from the cloud and between cloud platforms. These
tools can identify fraudulent use of data in the cloud, unauthorised downloads, and malware. There is a financial and performance
impact however: these tools can reduce the return on investment of the cloud by five to 10% , and impact performance by five to
15% . The country of origin of cloud services is also worrying some organisations (see Is geography irrelevant when it comes to
cloud computing? below)
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Security as a Service? We want it, say IT leaders
What is public cloud?
Public cloud is the classic cloud computing model, where users can access a large pool of computing power over the internet
(whether that is IaaS, PaaS, or SaaS). One of the significant benefits here is the ability to rapidly scale a service. The cloud
computing suppliers have vast amounts of computing power, which they share out between a large number of customers -- the
'multi-tenant' architecture. Their huge scale means they have enough spare capacity that they can easily cope if any particular
customer needs more resources, which is why it is often used for less-sensitive applications that demand a varying amount of
resources.
Image: Gartner
Businesses will spend $128 billion on public cloud this year, says IDC
What is private cloud?
Private cloud allows organizations to benefit from the some of the advantages of public cloud -- but without the concerns about
relinquishing control over data and services, because it is tucked away behind the corporate firewall. Companies can control
exactly where their data is being held and can build the infrastructure in a way they want -- largely for IaaS or PaaS projects -- to
give developers access to a pool of computing power that scales on-demand without putting security at risk. However, that
additional security comes at a cost, as few companies will have the scale of AWS, Microsoft or Google, which means they will not
be able to create the same economies of scale. Still, for companies that require additional security, private cloud may be a useful
stepping stone, helping them to understand cloud services or rebuild internal applications for the cloud, before shifting them into
the public cloud.
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What is hybrid cloud?
Hybrid cloud is perhaps where everyone is in reality: a bit of this, a bit of that. Some data in the public cloud, some projects in
private cloud, multiple vendors and different levels of cloud usage. According to research by TechRepublic, the main reasons for
choosing hybrid cloud include disaster recovery planning and the desire to avoid hardware costs when expanding their existing
data center.
Infographic: Companies are turning to hybrid cloud to save money

What does 'hybrid cloud' mean? It depends on whom you ask
Managing the multi-cloud: It's complicated
Cloud computing migration costs
For start-ups who plan to run all their systems in the cloud getting started is pretty simple. But the majority of companies it is not so
simple: with existing applications and data they need to work out which systems are best left running as they, and which to start
moving them to cloud infrastructure. This is a potentially risky and expensive move, and migrating to the cloud could cost
companies more if they underestimate the scale of such projects.
A survey of 500 businesses that were early cloud adopters found that the need to rewrite applications to optimise them for the
cloud was one of the biggest costs, especially if the apps were complex or customised. A third of those surveyed said cited high
fees for passing data between systems as a challenge in moving their mission-critical applications.
The report by Forrester also found that the skills required for migration are both difficult and expensive to find -- and that even
when organisations could find the right people they risked them being stolen away by cloud computing vendors with deep
pockets. One third of those surveyed said their software database license costs drastically increased if they moved applications.
Beyond this the majority also remained worried about the performance of critical apps and one in three cited this as a reason for
not moving some critical applications.
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Technology migrations are more painful, and cloud isn't making them any easier
Where does the NAS fit in an increasingly cloud-centric world?
Is geography irrelevant when it comes to cloud computing?
Actually it turns out that is where the cloud really does matter; indeed geopolitics is forcing significant changes on cloud
computing user and vendors. Firstly, there is the issue of latency: if the application is coming from a data center on the other side
of the planet, or on the other side of a congested network, then you may find it sluggish compared to a local connection. That's the
latency problem.
Secondly, there is the issue of data sovereignty. Many companies -- particularly in Europe -- have to worry about where their data
is being processed and stored. European companies are worried that, for example, if their customer data is being stored in data
centers in the US or (owned by US companies) it could be accessed by US law enforcement. As a result the big cloud vendors
have been building out a regional data center network so that organizations can keep their data in their own region.
In Germany, Microsoft has gone one step further, offering its Azure cloud services from two data centers, which have been set up
to make it much harder for US authorities -- and others -- to demand access to the customer data stored there. The customer data
in the data centers is under the control of an independent German company which acts as a "data trustee", and Microsoft cannot
access data at the sites without the permission of customers or the data trustee. Expect to see cloud vendors opening more data
centers around the world to cater to customers with requirements to keep data in specific locations.
And regulation of cloud computing varies widely elsewhere across the world: for example AWS recently sold a chunk of its cloud
infrastructure in China to its local partner because of China's strict tech regulations. Since then AWS has opened a second China
(Ningxia) Region, operated by Ningxia Western Cloud Data Technology.
Cloud security is another issue; the UK government's cyber security agency has warned that government agencies need to
consider the country of origin when it comes to adding cloud services into their supply chains. While it was warning about antivirus
software in particular, the issue is the same for other types of services too.
Consultants Accenture have warned that 'digital fragmentation' is the result as different countries enact legislation to protect
privacy and improve cyber security. While the aims of the laws is laudable, the impact is to raise costs for businesses. Three
quarters of the 400 CIOs and CTOs surveyed expect to exit a geographic market, delay their market-entry plans or abandon
market-entry plans in the next three years as a result of increased barriers to globalization.
More than half of the business leaders surveyed believe that the increasing barriers to globalization will compromise their ability
to: use or provide cloud-based services (cited by 54% of respondents, versus 14% that disagree); use or provide data and analytics
services across national markets (54% versus 15% ); and operate effectively across different national IT standards (58% versus
18%).
Over half said these increasing barriers will force their companies to rethink their: global IT architectures (cited by 60%) physical IT
location strategy (52%); cybersecurity strategy and capabilities (51%); relationship with local and global IT suppliers (50%); and
geographic strategy for IT talent (50%).
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What is a cloud computing region? What is a cloud computing availability zone?
Cloud computing services are operated from giant datacenters around the world. AWS divides this up by 'regions' and 'availability
zones'. Each AWS region is a separate geographic area, like EU (London) or US West (Oregon), which AWS then further subdivides
into what it calls availability zones (AZs). An AZ is composed of one or more datacenters that are far enough apart that in theory a
single disaster won't take both offline, but close enough together for business continuity applications that require rapid failover.
Each AZ has multiple internet connections and power connections to multiple grids: AWS has over 50 AZs.
Google uses a similar model, dividing its cloud computing resources into regions which are then subdivided into zones, which
include one or more datacenters from which customers can run their services. It currently has 15 regions made up of 44 zones:
Google recommends customers deploy applications across multiple zones and regions to help protect against unexpected
failures.
Microsoft Azure divides its resources slightly differently. It offers regions which it describes as is a "set of datacentres deployed
within a latency-defined perimeter and connected through a dedicated regional low-latency network". It also offers 'geographies'
typically containing two or more regions, that can be used by customers with specific data-residency and compliance needs "to
keep their data and apps close". It also offers availability zones made up of one or more data centres equipped with independent
power, cooling and networking.
Cloud computing and power usage
Those data centers are also sucking up a huge amount of power: for example Microsoft recently struck a deal with GE to buy all of
the output from its new 37-megawatt wind farm in Ireland for the next 15 years in order to power its cloud data centers. Ireland said
it now expects data centers to account for 15% of total energy demand by 2026, up from less than two percent back in 2015.
Cloud computing: IBM overhauls access rules at Euro data centre
AWS just sold some of its cloud computing infrastructure in China
Which are the big cloud computing companies?
When it comes to IaaS and PaaS there are really only a few giant cloud providers. Leading the way is Amazon Web Services, and
then the following pack of Microsoft's Azure, Google, IBM, and Alibaba. While the following pack might be growing fast, their
combined revenues are still less than those of AWS, according to data from the Synergy Research Group.
Synergy Research Group
Analysts 451 Research said that for many companies the strategy will be to use AWS and one other cloud provider, a policy they
describe as AWS + 1. These big players will dominate the delivery of cloud services: Gartner said two thirds of the spending on
cloud computing services will go through the top 10 public cloud providers through to 2021.
It's also worth noting that while all these companies are selling cloud services, they have different strengths and priorities. AWS is
particularly strong in IaaS and PaaS, but has designs on moving up towards databases. Microsoft in contrast has a particular
emphasis on SaaS thanks to Office 365 and its other software largely aimed at end user productivity, but is also trying to rapidly
grow its IaaS and Paas offering through Azure.
Google Cloud Platform (GCP) (which also offers office productivity tools) is somewhere between the two. IBM and Oracle's cloud
businesses are also made up of a combination of Saas and more infrastructure based offerings.
There are vast numbers of companies who have are offering applications through the cloud using a SaaS model. Salesforce is
probably the best known of these.
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AWS, Google Cloud Platform and Microsoft Azure -- what is the difference?
The cloud giants have different strengths. While AWS and Microsoft's commercial cloud businesses are about the same size,
Microsoft includes Office 365 in its figures. IBM, Oracle, Google and Alibaba all have sizeable cloud businesses too.
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Increasingly the major cloud computing vendors are attempting to differentiate according to the services that they offer, especially
if they can't compete with AWS and Microsoft in terms of scale. Google for example is promoting its expertise around artificial
intelligence; Alibaba wants to attract customers who are interested in learning from its retail know-how. In a world where most
companies will use at least one cloud provider and usually many more, IBM wants to position itself as the company that can
manage all these multiple clouds. Meanwhile AWS is pitching itself as the platform for builders, which is its new take on
developers.
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Cloud computing price wars
The cost of some cloud computing services -- particularly virtual machines -- has been falling steadily thanks to continued
competition between these big players. There is some evidence that the price cuts may spread to other services like storage and
databases, as cloud vendors want to win the big workloads that are moving out of enterprise datacenters and into the cloud.
That's likely to be good news for customers and prices could still fall further, as there remains a hefty margin in even the most
commodity areas of cloud infrastructure services, like provision of virtual machines.
What is the future of cloud computing?
Cloud computing is still at a relatively early stage of adoption, despite its long history. Many companies are still considering which
apps to move and when. However, usage is only likely to climb as organisations get more comfortable with the idea of their data
being somewhere other than a server in the basement. We're still relatively early into cloud adoption -- some estimates suggest
that only 10% of the workloads that could be move have actually been transferred across. Those are the easy ones where the
economics are hard for CIOs to argue with.
For the rest of the enterprise computing portfolio the economics of moving to the cloud may be less clear cut. As a result cloud
computing vendors are increasingly pushing cloud computing as an agent of digital transformation instead of focusing simply on
cost. Moving to the cloud can help companies rethink business processes and accelerate business change, goes the argument, by
helping to break down data and organisational silos. Some companies that need to boost momentum around their digital
transformation programmes may find this argument appealing; others may find enthusiasm for the cloud waning as the costs of
making the switch add up.
Why you're still scared of the Cloud (it's not about security or reliability)
Cloud computing switch as digital transformation takes priority
Moving to the cloud? Some advice to consider
Cloud computing case studies
There are plenty of examples of organisations deciding to go down the cloud computing route: here are a few examples of recent
announcements.
What's the best way to make the most of the cloud?

US Air Force plots IT overhaul, aims for cloud
DuluxGroup paints a future of procurement in the cloud
Marketo to migrate to Google Cloud as part of multi-year deal
AWS infrastructure is now behind three main streaming media providers
American Airlines to move consumer-facing apps to IBM Cloud, says Cloud Foundry key
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Cloud security and IoT are the new peanut butter and jelly [TechRepublic Premium]
For enterprises using cloud services with IoT, it's critical to adhere to as many security practices as possible. Experts weigh in on
the best approaches to take.
Public cloud, private cloud, or hybrid cloud: What's the difference?
Trying to understand and articulate the differences between public, private, and hybrid cloud? Here's a quick breakdown.
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Public cloud, private cloud, or hybrid cloud: What's the difference?
What does 'hybrid cloud' mean? It depends on whom you ask
Infographic: Companies are turning to hybrid cloud to save money
Businesses will spend $128 billion on public cloud this year, says IDC
Cloud computing security: This is where you'll be spending the money
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MUST READ: The CIO has a new set of priorities and problems: Here's what's on their to-do list

THIS DEVICE IS UNABLE TO PLAY THE REQUESTED VIDEO.

TOP CLOUD PROVIDERS

How does cloud computing work?

What cloud computing services are available?

What are examples of cloud computing?

Why is it called cloud computing?

What is the history of cloud computing?

How important is the cloud?

Image: 451 Research

Cloud computing beneﬁts

Business continuity is the ultimate killer application for cloud

Cloud computing advantages and disadvantages

What is cloud computing adoption doing to IT budgets?

Cloud computing spending is growing even faster than expected

Cloud computing: How to build a business case

Cloud computing adoption

What about cloud computing security?

What is public cloud?

What is private cloud?

What is hybrid cloud?

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