Is cloud computing for SMB the next big thing?

Cloud Computing is an outgrowth of several longstanding trends and can be seen as a slightly new way to address organizations' desire to focus only on the areas in which they produce the most added value. Other functions are given to partners that can provide those functions more efficiently and at less cost. Since small businesses are increasingly pressured to reduce costs, they are often the first to try out cloud services.

Cloud computing, while presented as something exciting and totally new, can be seen as just the most recent evolution in computing that can be placed at the intersection of the use of industry standard X86-based systems, outsourcing and the use of increasingly virtualized environments. While cloud computing services are available based upon Mainframes and midrange computers running UNIX or a single-vendor operating system, X86-based solutions are getting most of the industry attention.

Elements of Cloud Computing

Cloud computing is the use of computing resources (hardware and software) that are delivered as a service over a network (typically the Internet). Usually, these resources are self-provisioned, paid for using a "by-the-use" utility model, easily scaled up or down as needed and typically supported in a multi-tenant environment.

Why cloud computing?

Organizations who are selecting cloud computing are seeking cost reductions in the areas of staffing, software licensing, hardware, and support. Sometimes, however, they are making this selection based upon a lack of data center space, the lack of additional power or cooling in the data center, a lack of available funding for a new project or simply wanting to limit their risk by trying out something prior to investing in systems, software and staff.

Although cloud computing is often haled as the next thing in computing, it really is just a slight extension of previous industry trends. The industry time line seems to flow along these lines:

  • Outsourcing management of facilities and systems
  • Outsourcing development to third parties
  • Placing an organization's systems in a managed services firm's data center to make it possible to work more closely and efficiently with partners.
  • Outsourcing an entire application, such as Email or Customer Relationship Management, to a supplier
  • Outsourcing the data center and infrastructure to run custom workloads

Categories of cloud computing

Cloud computing can be segmented in to a few different approaches. Unfortunately, suppliers are often casting anything that is Internet-based as a cloud computing service. Currently the list of cloud computing services includes.

  • Software as a Service (SaaS) - outsourcing an entire workload to a third party.
  • Platform as a Service (PaaS) - using a third party's development environment and data center to support a custom workload
  • Infrastructure as a Service (IaaS) - using a third party's systems, network, storage and data center to support the organization's own custom or purchased workloads.

As cloud computing evolves, more services are being added to the list. Some new additions are management as a service and storage as a service are becoming important too.

Cloud computing can be supported in an organization's own data center, called a private cloud; in a third party's data center that is shared with other organizations, called a public cloud; or in a combination of those two approaches, called a hybrid cloud.

Some suggestions for SMB

It is important to really understand what a supplier is offering. What are the performance and reliability guarantees that a supplier is offering? What is the process to off-load the organization's data so that it can be used in-house or in another cloud service provider's data center. Planning for slow downs or outages is important as well.

If the staff at an organization doesn't have the time or the expertise to develop these plans, suppliers such as IBM, HP, Oracle, or RackSpace, would love to help.


This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. I’ve been compensated to contribute to this program, but the opinions expressed in this post are my own and don't necessarily represent IBM's positions, strategies or opinions.

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