One of the most prominent IT trends to emerge in 2009 was cloud computing. It's a technology that has been wholly embraced by vendors, but businesses remain justifiably skeptical. Even IT pundits widely disagree about the future of cloud computing: Is it yet another thinly veiled attempt to resurrect the widely rejected era of the mainframe and thin computing, or is it the basis for an all-new type of application that represents the future of computing? In these tight economic times, cloud computing’s promise to cut costs makes it a compelling offering. So, what are today's vendors offering?

What Is Cloud Computing?

Cloud computing is an umbrella term for an Internet-based service that provides some type of essential service to the organization. The specific types of services vary widely. Common cloud computing services include Microsoft Exchange Server hosting, application offerings such as Google Docs, the lease of backup storage, and even relational database services such as SQL Azure. Typically, the vendor’s servers entirely host these services, which you access over the Internet.

However, some vendors—including Microsoft—have attempted to push a Software Plus Services model, in which locally installed software (e.g., Microsoft Office) interacts with a web-based service (e.g., Windows Live Office). Customers typically pay the cloud computing vendor for the use of these services. Vendors usually offer some type of SLA guaranteeing specific levels of uptime and often a range of acceptable service-level performance. The types of SLAs vary with the type of service and often the level of service that the customer pays for.

The Silver Lining

Cost cutting is the primary benefit that most vendors cite for cloud computing. Cloud computing essentially lets you lease esential computing services from a third party and therefore avoid the capital expenditures necessary to support these services in-house. Leasing services instead of buying and building them lets a company save in infrastructure costs, licensing costs, and the costs for the IT personnel required to run and manage those services. Other advantages of cloud computing services are global accessibility, immediate deployment, and easy scalability. Because they're Internet-based, you can access cloud services wherever you have an Internet connection. In most cases, there are no deployment concerns. You can access the cloud-based services immediately, without any installation hassles. And cloud computing vendors have vast computing infrastructures that support very high levels of scalability. If you need additional scalability, it’s often as easy as simply paying for the next level of service.

Perhaps the biggest advantages of cloud computing go to the vendors that offer the solutions. Unlike traditional software sales, cloud services use a subscription-based income model. This model lets vendors sidestep all the packaging and deployment costs typically associated with selling on-premise software. Subscription-based income is the Holy Grail for software companies because it offers a predictable income model that isn't tied to the constant release of new products.

The Dark Underbelly

There’s certainly merit to the notion of cloud computing, but there’s also a dark side. The first concern is availability. Although the Internet and most of the involved websites are pretty reliable, the truth is that they all have downtime. When everything works, it’s all transparent, but an Internet connection has many working parts, and that last mile can often be the most troublesome. Some downtime is inevitable. The amount that’s acceptable depends on the type of service. For an application such as Hotmail or backup storage, high availability isn’t really a vital concern. For line-of-business (LOB) applications that your business depends on, it is. The SLAs of cloud computing vendors typically offer some amount of free services in the event of downtime.

Another concern is performance. In most cases, you’re buying into an existing computing infrastructure, but you're also sharing that infrastructure with many other customers. A shared infrastructure might provide slower performance during peak usage times than you might expect. Again, for performance-sensitive services, look for SLAs that offer guarantees of acceptable performance levels.

Cloud computing also comes with potential security concerns. These solutions store your confidential data on servers that are owned by another company. Your data isn't on the premises. That might or might not be a concern. However, as Tom Casey—general manager for SQL Server business intelligence—pointed out in his recent interview with SQL Server Magazine, security hasn't been a problem with most services. For example, he pointed out that many companies have successfully outsourced payroll through Automatic Data Processing (ADP) or other providers for many years and have experienced no unacceptable security problems with sensitive data.

Another area of concern is application integration. Integrating applications that are running in boxes sitting together in the same rack can be difficult. Integrating existing processes with external services adds another hurdle. Finally, choosing the correct vendor for your cloud computing services is another complication. You certainly don’t want your cloud computing vendor going out of business—at least not if you have critical business applications that depend on their services. Big companies such as Amazon, Google, and Microsoft aren’t much of a risk, but cloud computing is an emerging technology, and many smaller vendors will be vying for a piece of the cloud.

Today’s Cloud Offerings

You might not realize that the first major adopters of cloud computing have been consumers. Cloud-based services such as Gmail and Hotmail have been in widespread use for years. Social-media sites such as Facebook and MySpace are also cloud-based services that millions of consumers have adopted and even take for granted.

Businesses have been more reticent to jump into the cloud. Most have already internalized important functions such as email. However, Exchange hosting is one area in which many businesses—particularly smaller SMBs that lack the expertise to manage their own Exchange servers—have been using cloud-based service for years. But cloud vendors are looking beyond Exchange, toward an entirely new type of application platform.

Some of the big players in the corporate cloud computing market are the usual suspects: Google, IBM, Microsoft, and HP all have cloud computing offerings. Other companies that you might not anticipate as cloud computing vendors, such as Amazon and VMware, also offer their own take on the cloud.

Microsoft. Microsoft’s cloud-based offerings for business are primarily its new Windows Azure, SQL Azure, and Exchange and SharePoint Online services. Generally available in January 2010, Windows Azure is essentially a cloud-based version of the Windows Server OS. Likewise, SQL Azure is a cloud-based version of the SQL Server 2008 relational database server. Unlike Windows Server, which is often used for file and print services, Windows Azure is an application platform. It runs the same types of web applications that run on Windows Server: C++, C#, and Visual Basic (VB). Pricing is structured on an as-used basis (call it consumption) or by buying longer term contracts at fixed prices (call it commitment). Find out more about pricing at the Windows Azure Platform page (www.microsoft.com/windowsazure/pricing).

SQL Azure offers a subset of SQL Server's usual features. For example, it offers no Business Intelligence (BI) support and supports a restricted set of data types. Applications can access SQL Azure by using the same Tabular Data Stream (TDS) network protocol that’s used to access the on-premise version of SQL Server. A SQL Azure Web edition provides 1GB storage at the cost of $9.99 per month, and a SQL Azure Business edition provides up to 10GB of storage for $99.99 per month. For more information about SQL Azure, refer to "Getting Started with SQL Azure Database" (InstantDoc 103133).

It’s a mystery why Exchange and SharePoint Online don’t fall under the Azure umbrella. Perhaps it’s because they run on traditional hosted Windows Server systems rather than on Windows Azure. In any event, both products are essential Microsoft hosted servers. In each case, Microsoft offers a standard version (which runs on shared hardware) and a dedicated version (in which the hosted servers are dedicated solely to your company). Microsoft also offers a Business Productivity Online Standard Suite, which includes Exchange Online, SharePoint Online, Office Live Meeting, and Office Communications Online. Find out more about this suite at Microsoft's "Business Productivity Online Standard Suite" page (www.microsoft.com/online/business-productivity.mspx). Microsoft also sells a bewildering array of individual online services that you can find on the "How to Buy" page (www.microsoft.com/online/buy.mspx).

Google. Google got its start in the cloud, so it’s no surprise that it’s an established player in this arena. Google offers Google Docs, Google Apps, and Google App Engine cloud-based services.

Google Docs is a free service that lets you create, share, and collaborate on documents, spreadsheets, and presentations. You access Google Docs through a web browser, it requires zero footprint, and it's ready to be used right away. Some small businesses use Google Docs as an alternative to Office. Although not nearly as full-featured as Office, Google Docs provides essential word-processing and spreadsheet capabilities. Google Docs lets you import most Office document formats, including .doc, .docx, .xls, and .xlsx. Recent enhancements also enable offline document editing. Find out more at the Google Docs page (www.google.com/docs).

Google Apps is collection of web-based services, including Gmail for business, Google Docs, Google Calendar, Google Groups, Google Sites, and Google Video. Of course, Gmail provides email services, and Google Calendar provides an Outlook-like calendar with appointments. Google Groups help you set up a documents calendar and site sharing for groups of users. Google Sites lets you create and host websites, and Google Video lets you post, play, and search for online videos. Google promotes Google Apps as an alternative to Exchange and Lotus Notes. Google Apps costs $50 per year, per user. There are several Google Apps editions, including Standard, Premier, Educators, Non-Profit, and Government. The City of Los Angeles is probably the highest-profile customer for Google Apps. Find out more at the Google Apps page (www.google.com/a).

Google also provides a service called Google App Engine, which lets you run your web applications on Google’s servers. Google App Engine supports Java and Python applications. Find out more at the Google App Engine page (code.google.com/appengine). And Google provides a free public DNS service at 8.8.8.8.

IBM. Not to be left out of the cloud race, IBM provides a number of cloud-based services. The company's LotusLive iNotes service offers cloud-based email. LotusLive iNotes supports both Outlook and Lotus Notes clients and can be accessed using POP3 or IMAP protocols. IBM provides hosting and anti-spam and antivirus protection. The company offers a free 30-day trial, as well as a mail-only service for $3 per month, per user (or a $3.75-per-month version that includes mail and calendaring). Learn more on the LotusLive iNotes page (www.lotuslive.com/en/services/inotes).

For file sharing, messaging, and collaboration, the company offers IBM LotusLive, a collection of services that include Lotus Meetings, Events, Connection, Engage, and Notes. These services provide a variety of business functions, such as instant messaging (IM), desktop and application sharing, slide presentations, video sharing, dashboards, and file sharing. The services are priced separately, ranging from $79 per month to $9 per month. Learn more about the product or try a 30-day free trial at the LotusLive page (www.lotuslive.com/en/compare).

For enterprise BI, IBM offers IBM Smart Analytics Cloud, which is essentially a private cloud consisting of IBM’s Cognos BI Analytics software running on a System z mainframe. The goal of this offering is to provide BI as a service to the enterprise. Find out more at "Smart Analytics Cloud for System z" (www-03.ibm.com/systems/z/solutions/cloud/smart.html).

IBM also offers online storage with its IBM Smart Business Storage Cloud service, a highly scalable virtual-storage solution that lets you quickly provision storage for your enterprise on a global basis. Find out more at the "Smart Business Storage Cloud" page (www-935.ibm.com/services/us/index.wss/offering/its/a1031610).

IBM offers a couple cloud-based services as a service to developers: IBM Smart Business Test and IBM Smart Business Development and Test. With Smart Business Test, IBM will set up and configure physical and virtual resources—including OSs, middleware, and storage—for your company to use in testing products and services. Find out more on the "Infrastructure Optimization Services—IBM Smart Business Test Cloud" page (www-935.ibm.com/services/us/index.wss/offering/midware/a1030965). There's also a new IBM Smart Business Development and Test program that’s in beta at the time of this writing. This offering links shared cloud storage and development capabilities with IBM’s Rational line of development tools.

HP. Aimed at SMB customers, HP's Communications as a Service program provides interactive voice response, video surveillance, IP contact centers, and unified communication (UC) services. The interactive voice response and IP Contact Center are customer-service-oriented solutions that let SMBs provide customers with telephone transaction services and call response services. The video surveillance solution combines on-premise camera with cloud-based management and alerting services. The UC service provides a combined interface for voice, IM, and video calls using a PC or phone. Learn more at the HP Communications as Service program page (h20208.www2.hp.com/cms/solutions/rc/caas.jsp).

HP also offers its Cloud Consulting Services and Cloud Assure service, which are consulting services designed to help customers design, manage, and secure their cloud computing solutions. Learn more at the HP Cloud Consulting Services page (https://h10078.www1.hp.com/cda/hpms/display/main/hpms_content.jsp?zn=bto&cp=1-23^41773_4000_100) and the Cloud Assure page (https://h10078.www1.hp.com/cda/hpms/display/main/hpms_content.jsp?zn=bto&cp=1-11%5e40898_4000_100__

Amazon. You expect to see Google, HP, IBM, and Microsoft in the enterprise cloud computing market, but you might not expect to see Amazon. Well known for its web storefront, Amazon also offers its Amazon Elastic Compute Cloud (EC2) web service, along with its Amazon Simple Storage Service (S3), Amazon SimpleDB, Amazon Relational Database Service (RDS), and Amazon Simple Queue Service (SQS).

Amazon EC2 is a virtual computing platform that lets you buy multiple server instances with different levels of compute power and different OSs, including Windows Server 2008 or 2003, as well as Red Hat Enterprise Linux, openSUSE, and others. Amazon EC2 prices range from $.95 per hour to $3.16 per hour, depending on the level of service and the options chosen. You can also elect to reserve services on one-year or three-year terms. Find out more at the Amazon Elastic Compute Cloud (Amazon EC2) page (aws.amazon.com/ec2). In conjunction with EC2, Amazon offers a storage service called Amazon Elastic Block Store (EBS), which provides block-level storage for EC2 instances. Customers are charged by the amount of storage used at a rate of $.10 per GB per month. Find more at the Amazon Elastic Block Store (EBS) page (aws.amazon.com/ebs).

Amazon S3 is a web service that you can use to store and retrieve data. Stored objects can range from 1 byte to 5GBs. There's no limit to the number of objects that you can store. Data is stored and priced according to the customer's region. Amazon provides two US regions and 1 European Union (EU) region. Amazon S3 is priced according to the region and the level of storage. Tiers range from 50TB to 5,000TB. Find out more at the Amazon Simple Storage Service (Amazon S3) page (aws.amazon.com/s3).

Whereas S3 is simple object-based storage, Amazon also offers two more capable storage engines: Amazon SimpleDB and Amazon Relational Database Service (RDS). Both are suitable for application development. Amazon SimpleDB provides high availability and automatic indexing and performance tuning. You can get started with Amazon SimpleDB for free; after that, Amazon charges $.14 per machine hour consumed. There's also a charge on consumed data, which starts at $.15 per gigabyte of the first 10GB drops to $.08 per GB at 150 TB of data consumed. Amazon RDS is a web service that gives you more control over the relational database. It essentially gives you access to a hosted MySQL 5.1 database. Amazon charges for Amazon RDS according to computing calls, beginning at $.11 for 1.7GB of memory and one virtual core. Find more at the Amazon SimpleDB and Amazon Relational Database Service (Amazon RDS) pages (aws.amazon.com/simpledb and aws.amazon.com/rds).

VMware. Another company that you might not expect to see in the cloud computing space is VMware. This company's main thrust is in using its virtualization technology to build a private cloud with its vSphere virtualization platform. The company's VMware Cloud OS and vCloud Express offerings also move it toward the cloud.

VMware isn't a service provider; rather, its goal is to provide technologies that let partners build cloud-based infrastructure offerings. VMware Cloud OS aims to deliver a cloud-based OS through a combination of Application Services and Infrastructure Services. VMware defines a cloud OS as managing a large collection of infrastructure resources rather than managing a single server resource such as a traditional OS. Learn more at the VMware Cloud OS page (www.vmware.com/products/cloud-os/index.html).

Unlike most of the other cloud computing solutions that offer software as a service, vCloud Express offers Infrastructure as a Service (IaaS). VMware’s vCloud Express will be made available through partners. Learn more at the VMware vCloud Express page (www.vmware.com/appliances/services/vcloud-express.html). Discover featured partners at the VMware Featured vCloud Service Providers page (www.vmware.com/partners/alliance/service_provider).

Where the Winds May Blow

Unlike the failed thin computing trend a decade ago, cloud computing is here to stay. As you can see, a wide variety of companies offer solutions that range from user-oriented solutions to enterprise development platforms. At this point, cloud computing might not be for all businesses—and it isn’t going to replace on-premise solutions anytime soon. However, it's a way to extend the capabilities of your organization with a minimum of capital expenditures. In addition, cloud computing provides an Internet-based platform that lays the foundation for a new generation of globally accessed, highly scalable cloud-based applications.