Cloud Computing

Complete guide to Cloud Computing in Network Encyclopedia.

What is cloud computing?

Cloud computing, often referred to as simply the cloud is the delivery of on-demand computing resources – everything from applications to data centers – over the internet on a pay-for-use basis.

  • Elastic resources: Scale up or down quickly and easily to meet changing demand.
  • Metered services: Pay only for what you use.
  • Self-service: Find all the IT resources you need, with self-service access.
Cloud Computing - Private cloud, Public cloud, Hybrid cloud, Database, Server, Storage, Mobile, Applications.
Cloud Computing

Contents (this page)

Where did the term Cloud Computing originate from? (1)

The birth of the term can be traced back to 2006, when large companies such as Google and Amazon began using “cloud computing” to describe the new paradigm in which people are increasingly accessing software, computer power, and files over the Web instead of on their desktops.

However, with a little research, we could track the coinage of the term back a decade earlier, to late 1996, and to an office park outside Houston. Inside the offices of Compaq Computer, a small group of technology executives was plotting the future of the Internet business and calling it “cloud computing.”

Their vision was detailed and prescient. Not only would all business software move to the Web but what they termed “cloud computing-enabled applications” like consumer file storage would become common. For two men in the room, a Compaq marketing executive named George Favaloro and a young technologist named Sean O’Sullivan, cloud computing would have dramatically different outcomes. For Compaq, it was the start of a $2-billion-a-year business selling servers to Internet providers. For O’Sullivan’s startup venture, it was a step toward disenchantment and insolvency.

With billions of dollars of IT spending in play, the term itself has become a disputed prize. In 2008, Dell drew outrage from programmers after attempting to win a trademark on “cloud computing.” Other technology vendors, such as IBM and Oracle, have been accused of “cloud washing,” or misusing the phrase to describe older product lines.

“The cloud is a metaphor for the Internet. It’s a rebranding of the Internet,” says Reuven Cohen, cofounder of Cloud Camp, a course for programmers. “That is why there is a raging debate. By virtue of being a metaphor, it’s open to different interpretations.” And, he adds, “it’s worth money.”

Part of the debate is who should get credit for inventing the idea. The notion of network-based computing dates to the 1960s, but many believe the first use of “cloud computing” in its modern context occurred on August 9, 2006, when then Google CEO Eric Schmidt introduced the term to an industry conference. “What’s interesting [now] is that there is an emergent new model,” Schmidt said, “I don’t think people have really understood how big this opportunity really is. It starts with the premise that the data services and architecture should be on servers. We call it cloud computing – they should be in a “cloud” somewhere.”

The term began to see wider use the following year after companies including Amazon, Microsoft, and IBM started to tout cloud-computing efforts as well. That was also when it first appeared in newspaper articles, such as a New York Times report from November 15, 2007, that carried the headline “I.B.M. to Push ‘Cloud Computing,’ Using Data From Afar.” It described vague plans for “Internet-based supercomputing.”

Benefits of the Cloud

Cloud computing fundamentally changes the way that IT services are delivered to organizations. Instead of both owning and managing IT services for themselves, or using an outsourcing approach built around dedicated hardware, software, and support services, organizations can use cloud computing to meet their IT requirements using a flexible, on-demand, and rapidly scalable model that requires neither ownership on their part, nor provision of dedicated resources.

Some of the benefits that Cloud Computing brings are as follows:

  • Reduced Cost: Cost is a clear benefit of cloud computing, both in terms of CapEx and OpEx. The reduction in CapEx is obvious because an organization can spend in increments of required capacity and does not need to build infrastructure for maximum (or burst) capacity. For most enterprises, OpEx constitutes the majority of spending; therefore, by utilizing a cloud provider or adopting cloud paradigms internally, organizations can save operational and maintenance budgets.
  • Flexibility: Flexibility benefits derive from rapid provisioning of new capacity and rapid relocation or migration of workloads. In public sector settings, cloud computing provides agility in terms of procurement and acquisition process and timelines.
  • Improved Automation: Cloud computing is based on the premise that services can not only be provisioned but also de-provisioned in a highly automated fashion. This specific attribute offers significant efficiencies to enterprises.
  • Focus on Core Competency: Government agencies can reap the benefits of cloud computing in order to focus on its core mission and core objectives and leverage IT resources as a means to provide services to citizens.
  • Sustainability: The poor energy efficiency of most existing data centers, due to poor design or poor asset utilization, is now understood to be environmentally and economically unsustainable. Through leveraging economies of scale and the capacity to manage assets more efficiently, cloud computing consumes far less energy and other resources than a traditional IT data center.

For further learning about Cloud Computing check our list:

Cloud Computing Architectural Considerations

  • Cloud Computing Infrastructure Model
    Government agencies need to consider several infrastructural models when evaluating cloud-computing architecture. Cisco sees four categories of cloud currently in the marketplace or emerging in the near future: public clouds, private clouds, virtual private clouds, and eventually inter-clouds.
  • Public Clouds
    Public clouds are “stand-alone,” or proprietary, clouds mostly off-premise, run by third-party companies such as Google, Amazon, Microsoft, and others. Public clouds are hosted off customer premises and usually mix applications (transparently) from different consumers on shared infrastructure
  • Private Clouds
    Private clouds are typically designed and managed by an IT department within an organization. A private cloud is usually built specifically to provide services internally to an organization. Private clouds may be in a collocated facility or in an existing data center. This model gives a high level of control over the cloud services and the cloud infrastructure. Cisco has a strong portfolio of solutions, products, and services, which enable private cloud infrastructures.
  • Virtual Private Clouds
    Virtual private clouds allow service providers to offer unique services to private cloud users. These services allow customers to consume infrastructure services as part of their private clouds. The ability to augment a private cloud, with on-demand and at-scale characteristics, is typical of virtual private cloud infrastructure. Private cloud customers can seamlessly extend trust boundaries (security, control, service-level management, and compliance) to include virtual private clouds.
    The virtual private cloud concept introduces the complexities of migrating workloads and related data from a private cloud. Cisco is already developing a unique set of capabilities in the form of protocols and solutions, which enable long-distance, workload mobility scenarios from private clouds to virtual private clouds.
  • Inter-cloud
    Cisco envisions, that in the long term, the inter-cloud will emerge as a public, open, and decoupled cloud-computing internetwork, much like the Internet. In a sense, the inter-cloud would be an enhancement and extension of the Internet itself. Just as the Internet decouples clients from content (i.e., you don’t have to have a preexisting agreement with a content provider to find and access its website in real-time), the inter-cloud will decouple resource consumers (enterprises) from cloud resource providers, allowing the enterprises to find resources on-demand with providers. Workload migration will be the dominant use case for the inter-cloud, as an open market, establishes trust standards and public subsystems for naming, discovering, and addressing portability and data/workload exchange.

Service Layers of Cloud Computing

In a cloud value chain, services are virtualized and delivered on-demand.

The four major layers in the cloud computing value chain are:

  • Software as a Service (SaaS) is where application services are delivered over the network on a subscription and on-demand basis. Cisco WebEx™, Salesforce, Microsoft, and Google are a few providers in this layer.
  • Platform as a Service (PaaS) consists of run-time environments and software development frameworks and components delivered over the network on a pay-as-you-go basis. PaaS offerings are typically presented as API to consumers. Examples of this are Google Apps Engine, Amazon Web Services,, and Cisco® WebEx Connect.
  • Infrastructure as a Service (IaaS) is where compute, network and storage are delivered over the network on a pay-as-you-go basis. Amazon pioneered this with AWS (Amazon Web Service), and now IBM and HP are entrants here also. The approach that Cisco is taking is to enable service providers to move into this area.
  • IT foundation is the basis of the above value chain layers. It provides basic building blocks to architect and enables the above layers.

Security issues in Cloud Computing

Your cloud infrastructure is only as secure as you make it. Responsibility for securing the cloud lies not only with security teams but also with DevOps and operations teams that are charged with ensuring appropriate security controls are used. Businesses are eager to bring more regulated workloads to the cloud, including any application that manages or contains personal identifying information, financial information or healthcare information.

 Cloud Computing Security
Cloud Computing Security

To avoid cloud computing risks, a cloud managed services provider should incorporate built-in security layers at every level – from the data center to the operating system – delivering a fully configured solution with industry-leading physical security and regular vulnerability scans performed by highly skilled specialists.

Some small businesses that don’t have expertise in IT security could find that it’s more secure for them to use a public cloud. There is the risk that end users do not understand the issues involved when signing on to a cloud service (persons sometimes don’t read the many pages of the terms of service agreement, and just click “Accept” without reading). This is important now that cloud computing is becoming popular and required for some services to work, for example for an intelligent personal assistant (Apple’s Siri or Google Now). Fundamentally, private cloud is seen as more secure with higher levels of control for the owner, however public cloud is seen to be more flexible and requires less time and money investment from the user. (2)

Disadvantages of Cloud Computing

According to Bruce Schneier, “The downside is that you will have limited customization options. Cloud computing is cheaper because of economics of scale, and – like any outsourced task – you tend to get what you get. A restaurant with a limited menu is cheaper than a personal chef who can cook anything you want. Fewer options at a much cheaper price: it’s a feature, not a bug.” He also suggests that “the cloud provider might not meet your legal needs” and that businesses need to weigh the benefits of cloud computing against the risks.

In cloud computing, the control of the back end infrastructure is limited to the cloud vendor only. Cloud providers often decide on the management policies, which moderates what the cloud users are able to do with their deployment. Cloud users are also limited to the control and management of their applications, data, and services. This includes data caps, which are placed on cloud users by the cloud vendor allocating a certain amount of bandwidth for each customer and are often shared among other cloud users.

Privacy and confidentiality are big concerns for some activities. For instance, sworn translators working under the stipulations of an NDA might face problems regarding sensitive data that are not encrypted.

Cloud computing is beneficial to many enterprises; it lowers costs and allows them to focus on competence instead of on matters of IT and infrastructure. Nevertheless, cloud computing has proven to have some limitations and disadvantages, especially for smaller business operations, particularly regarding security and downtime. Technical outages are inevitable and occur sometimes when cloud service providers (CSPs) become overwhelmed in the process of serving their clients. This may result to temporary business suspension. Since this technology’s systems rely on the internet, an individual cannot be able to access their applications, server or data from the cloud during an outage.

Cloud Computing explained (video)

This Cloud Computing tutorial will help you understand why Cloud Computing has become so popular, what is Cloud Computing, types of Cloud Computing, Cloud providers, the lifecycle of a Cloud Computing solution and finally a demo on AWS EC2 and AWS S3.

With the increased importance of Cloud Computing, qualified Cloud solutions architects and engineers are in great demand. Organizations have moved to cloud platforms for better scalability, mobility, and security. In simple words, cloud computing is the use of a network of remote servers hosted on the internet to store, manage and process data rather than a local server.

References and Bibliography

  1. MIT Technology Review, “Who Coined ‘Cloud Computing’?”, Antonio Regalado – October 31, 2011
  2. Wikipedia, Cloud Computing – Security and Privacy


Articles posted after being checked by editors.

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