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Outlining The Cloud: Service-Based Computing

by William Laurent, William Laurent, Inc.Monday, August 9, 2010

Nearly every genre of computing technology will have a healthy dependence on cloud computing in the future.  On-demand resource sharing of software, data, networks and computing platform services will soon become the new normal for users of electronic business applications.  This new paradigm of provisioning, delivery and consumption of IT services will wield a weighty influence on Web 3.0, which will be about highly dynamic and scalable cloud service models, as much as it will be about newfangled data taxonomies or forward-looking logical and physical classifications of information (and the interaction of said information) on the internet.

The value proposition of cloud computing rests on three main models: Software-as-a-Service (SaaS), Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) - which will begin to liberate IT departments from their present-day costly and complicated information architectures and infrastructures.  This event portends to be one of the most significant developments in the short history of electronic enterprise business intelligence.   Instead of purchasing, running, maintaining and disposing of a staggeringly high number of hardware components each year, businesses will  consume software, hardware and network services on an as-needed basis, paying for only the resources (logical and physical) they use.

For corporations that rely on heavy duty data-processing infrastructure, the ability to dynamically procure information architecture and software functions will be the key driver that will finally allow them to slash IT budgets in accordance with their CEO’s long-held desires.  Business organizations which truly understand how to best utilize service-based technology models, where they neither own nor maintain large pieces of physical IT infrastructure or big chunks of software, stand to build efficient and agile IT departments, while reducing their investments and overhead throughout all functional areas.

Generically speaking, Software-as-a-Service (SaaS) enables applications to exist in the cloud and deliver functionality directly to an internet browser.  With SaaS, there is no need for IT departments to purchase, support and maintain expensive applications and supporting technical firmament.  Many of today’s most popular customer relationship management (CRM), accounting, salesforce automation, and human resources applications overwhelmingly adhere to the SaaS model: Salesforce.com, QuickBooks, LinkedIn and Facebook are just a few of the World Wide Web-resident SaaS packages that millions of businesses and individuals can’t live without.

Case in point: I outsource the management of my professional social network to LinkedIn because both my laptop and smartphone tend to experience system crashes from time to time.  If my computer goes down, gets stolen or I accidently delete the contacts in my iPhone—no worries; I know that everybody’s contact information is still hosted in a safe place which is highly accessible and yet secure.  One great thing about the major internet-based SaaS providers is that, if you don’t find all the functionality that you desire on their website, you can usually find a ton of additional features and services coded by third parties, which integrate seamlessly with the primary SaaS provider’s applications.

Infrastructure-as-a-Service (IaaS) delivers network, server and other processing strata via the cloud, creating complete virtual processing environments for service subscribers. Services are primarily billed on a “pay-as-you-go” basis, where costs scale up and down with the amount of infrastructure services used.  Many of the difficulties associated with running a data center or IT infrastructure department become someone else’s problem.

Platform-as-a-Service (PaaS) provides scalable environments for software development, hosting and storage.  Like other service models, there is an abstraction and virtualization of the underlying physical resources.  Application developers can develop, test and deploy complex software applications without worrying about an underlying stack of supporting physical components or constraints in bandwidth (which can be allocated dynamically).

Organizations can procure or subscribe to the three types of services listed above in an immeasurable number of ways, mixing and matching how they consume each. Service level agreements (SLAs) become more mutable and dexterous, as service provisioning becomes more proactive and less reactive in nature.  This change is noteworthy.  With cloud computing, SLAs are being constructed between the service provider and their clients on both an inter-company and intra-company basis.

In other words, some companies are banding together to form their own virtual center of consumption, sharing with one another (as co-signers) a package of infrastructure and platform servers.  In this way they can better take advantage of provider-costing models via economies of scale.  Eventually, “value added resellers” (VARs) of these services will emerge.  They will function much like VARs did in the late 20th century; however, the wares they will be peddling will be virtual.  Their value-added angle remains to be seen at this point, but information security and performance measurement loom as good initial choices.

About the Author

William Laurent is one of the world's leading experts in information strategy and governance. For 20 years, he has advised numerous businesses and governments on technology strategy, performance management, and best practices�across all market sectors. William currently runs an independent consulting company that bears his name. In addition, he frequently teaches classes, publishes books and magazine articles, and lectures on various technology and business topics worldwide. As Senior Contributing Author for Dashboard Insight, he would enjoy your comments at wlaurent@williamlaurent.com

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