By Judy Greenwald
Cloud computing involves using an Internet browser to access software and hardware on a “cloud,” or network of computers that can be located anywhere in the world, rather than a single, owned computer system.
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Businesses can have the power of a supercomputer while no longer having to worry about administering and updating complex computer systems; those duties are essentially outsourced to the cloud computing provider.
Cloud computing also can generate considerable cost savings through economies of scale, observers say. It readily accommodates businesses' shifting needs because the cloud's networked servers provide adequate computer capacity whenever necessary.
Companies “don't want to pay to have an internal data center in the backroom for their office, so it's cheaper and easier to offload to a cloud computing company,” said Gabriel M. Helmer, an associate with law firm Foley Hoag L.L.P. in Boston.
Experts say there are three basic types of cloud computing delivery models: software applications; infrastructure, which provides server and storage capacity; and platforms, which permit developers to build Web applications.
Although the cloud computing label is new, “actually, it's a very old concept,” said Peter S. Vogel, a partner with law firm Gardere Wynne Sewell L.L.P. in Dallas. The idea of sharing computer time “has been around for 40 years,” he said. “What makes it a little bit trickier now” is that because of the Internet, data no longer is stored in any particular location. “It is just out there on the Internet somewhere,” he said.
Some major companies—such as IBM Corp., Microsoft Corp., Yahoo! Inc. and Google Inc.—are in this business, observers note, but numerous smaller vendors also are servicing all aspects of cloud computing. That calls for exercising caution in selecting vendors, experts say. Whatever the vendor's size, a good contract is critical (see story, page 11).