Cloud computing has recently emerged as a hot trend, right alongside virtualization and service-oriented architecture (SOA). Cloud computing offers you the ability to deploy applications, systems, and IT resources as services that reside in a global connected network—the “cloud.” You can pull resources from the cloud whenever you need them, and you pay only for what you use.

1. Five Things To Know
Cloud computing is beset by
evolving standards, varied
pricing models, and unknown
or disputed best practices. As
a result, market misinforma-
tion abounds, causing confu-
sion for organizations that
might otherwise benefit from
this new technology.
Five Things To Know About
Cloud Computing:
1. There are many ways to
accomplish cloud
computing.
2. Cloud computing has a
recognized value
proposition.
3. Cloud computing doesn’t
expose your data.
4. Cloud computing
solutions vary greatly in
price.
5. Certain projects benefit
from cloud computing.
An Advanced Systems Group White Paper
Cloud computing has recently emerged as a hot trend, right alongside virtualization and
service-oriented architecture (SOA). It’s so new, in fact, that its precise definition is still as
nebulous as its name suggests. Generally speaking, cloud computing offers you the
ability to deploy applications, systems, and IT resources as services that reside in a global
connected network—the“cloud.”You can pull resources from the cloud whenever you
need them, and you pay only for what you use. Depending on the type of cloud comput-
ing, these services may exist somewhere beyond the corporate firewall.
With cloud services, you can scale your IT resources quickly and endlessly. If you suddenly
need to process more data, you can add more CPUs. If you need to store more data
beyond your own disk capacity, you can pull additional storage capacity from the cloud.
After peak usage hours, you can just as quickly and easily scale down when you need
fewer IT resources. It’s basically the next phase of service-oriented IT.
As with any nascent technology, much remains in flux. The simple truth is that cloud
computing is beset by evolving standards, varied pricing models, and unknown or
disputed best practices. As a result, market misinformation abounds, causing confusion
for organizations that might otherwise benefit from this new technology.
Cloud computing is destined to become part of almost every
organization’s IT strategy. Eventually, users won’t even differentiate
between what comes from the cloud and what doesn’t. In the meantime,
here are five tips to help you find your way through the fog of marketing
propaganda.
About Cloud Computing
1 There Are Many Ways To Accomplish Cloud Computing
Even now, there’s a type of cloud computing for almost every need, and we can expect
more to come. Presently, we can identify at least four general types of cloud computing.
Together, these form what you can call“IT as a service.”
Infrastructure as a Service (IaaS)—IaaS includes servers, networks, storage, manage-
ment, and reporting. You might know Amazon Elastic Compute Cloud (E2C) as an IaaS
provider, but there are others as well.
Platform as a Service (PaaS)—This type of cloud computing addresses the needs of
application development and testing by providing building blocks, enforcing consistent
standards, and facilitating testing. Currently, App Engine from Google is the most
well-known PaaS provider.

2. Software as a Service (SaaS)—SaaS cloud computing delivers packaged applications
configured by each customer that run as a hosted service. Although there are hundreds
of SaaS providers, Google Apps and Salesforce.com are the current market leaders.
Storage as a Service (StaaS)—StaaS is similar to IaaS, but it’s focused on storage
delivered as a hosted service. It includes primary, secondary, and archival storage as well
as backup and disaster recovery. Popular StaaS providers include Amazon S3, Nirvanix,
and Rackspace.
Cloud computing effectively
shifts IT investment from a
capital expenditure (CAPEX)
to an operational expense
(OPEX). In practice, the cloud
provides a way for companies
to find the optimal balance
between their CAPEX and
OPEX IT resources and to shift
that balance as needed.
It’s true that if you implement
a cloud computing solution,
your organization’s data will
reside in the cloud—but that
doesn’t necessarily leave it
more exposed than when it
resides behind the corporate
firewall.
2 Cloud Computing Has a Recognized Value Proposition
Although cloud computing still requires more work refining its value proposition, we can
already identify a few key elements. These recognized value propositions include the
ability to:
Access IT resources without upfront capital investment—Companies can easily and
quickly obtain IT resources of all sorts without the upfront capital investment usually
required or involvement in long term leasing. The cloud offers IT resources on demand.
Employ the pay-per-use model—Companies pay only for the IT resources they actually
use, when they use them. This eliminates the common practice of buying extra IT
resources that companies may never need.
Innovate more easily by removing IT barriers—Organizations can pursue business
strategies without worrying about having the necessary IT resources available when they
need them.
Scale up or down easily—With cloud computing, organizations can quickly and easily
respond to fluctuations in the economy, markets, customer behaviors, and unexpected
events by scaling their IT resources up or down as needed.
Cloud computing effectively shifts IT investment from a capital expenditure (CAPEX) to
an operational expense (OPEX). In practice, the cloud provides a way for companies to
find the optimal balance between their CAPEX and OPEX IT resources and to shift that
balance as needed.
3 Cloud Computing Doesn’t Expose Your Data
It’s true that if you implement a cloud computing solution, your organization’s data will
reside in the cloud, but that doesn’t necessarily leave it more exposed than when it
resides behind the corporate firewall. In fact, the most egregious losses of data happened
when the data was supposedly safe behind a company firewall, under the direct control
of in-house IT people—like the TJX Companies data breach in 2007.¹
Plus, cloud computing can take three different forms, and each has a different amount of
public exposure:
Private—With private cloud computing, data sits behind a corporate firewall, and
companies directly control the amount of exposure.
¹ http://www.computerworld.com/s/article/9014782/TJX_data_breach_At_45.6M_card_numbers_it_s_the_biggest_ever?
taxonomyId=17&pageNumber=1

3. Public—Public cloud computing means that data sits in a publicly exposed cloud.
Security depends on the service provider’s level of security, precautions, and defenses.
Hybrid— In hybrid clouds, some data resides on a private cloud, while other data resides
on a public cloud. Security depends on both companies’internal security controls and
those of the cloud provider.
If you’re considering implementing cloud computing—and especially if you have
sensitive data— you should carefully review the security capabilities of possible cloud
service providers and balance any participation in private, public, and hybrid clouds
accordingly.
If you’re considering imple-
menting cloud computing
—and especially if you have
sensitive data— you should
carefully review the security
capabilities of possible cloud
service providers and balance
any participation in private,
public, and hybrid clouds
accordingly.
A well-managed, efficient IT
operation beats cloud costs in
many instances, so organiza-
tions with efficient enterprise
data centers may not find the
savings from cloud comput-
ing compelling. Small and
midsize organizations, on the
other hand, can benefit
immediately from cloud
computing.
4 Cloud Computing Solutions Vary Greatly In Price
The costs of cloud computing scale the whole price range from the inexpensive to the
very expensive. Because cloud pricing models and the prices themselves can be deceiv-
ing, it helps to understand the various cloud pricing approaches.
For example, a StaaS provider might charge 17¢ per GB for the first 10 TB of data. But if
you exceed 150 TB per month, the price could drop as low as 10¢ per GB. For organiza-
tions consuming 10-100 terabytes, or even petabytes of storage, those pennies add up to
a significant savings. Plus, you avoid load balancing, dedicated VLANs and firewalls,
role-based permissions, and tech support altogether.
In many ways the financial decision is comparable to buying a car versus participating in
a car sharing program, like Zipcar.® You can think of car sharing as the cloud equivalent
for obtaining car resources. Sometimes it’s the better deal for your particular need, and
sometimes it’s not. It depends on the provider, how much of the resource you need, and
what additional features you want.
But one thing is certain: A well-managed, efficient IT operation beats cloud costs in many
instances, so organizations with efficient enterprise data centers may not find the savings
from cloud computing compelling. For these companies, cloud computing will merely be
one component in their overall IT strategy, only used where it is most cost-effective. Small
and midsize organizations, on the other hand, can benefit immediately from cloud
computing.
5 Certain Projects Benefit From Cloud Computing
Generally, jobs that process data for projects that are dormant or no longer generating
revenue make good candidates for the cloud infrastructure. Other types of projects that
appear to benefit from cloud computing include:
• Web-facing applications
• Backup and recovery
• Data archiving
• Content distribution
• Supplemental IT resources

4. Mainstream Adoption?
According to the Gartner’s“Hype Cycle of Emerging Technologies,”cloud computing
currently is at the peak of inflated expectations, just about to reach the trough of disillu-
sionment. ² Exciting new technologies typically follow this path. Cloud computing may
take another five years before it reaches full maturity and mainstream adoption.
In order to reach that point, cloud computing will need to be more cost-competitive with
well-managed enterprise IT data centers. Also, it will have to address the security, reliabil-
ity, and integration issues with other enterprise back-end systems.
But that doesn’t necessarily mean that companies can’t take advantage of cloud
resources today. Many organizations already successfully leverage cloud resources to
avoid capital expenses, achieve better backup and recovery, meet compliance mandates
for archiving, and access applications on a pay-per-use or subscription basis.
About the Author
Mark Teter is the Chief Technology Officer at Advanced Systems Group. He is an interna-
tionally recognized authority on information technology who regularly advises IT
organizations, vendors, and government agencies on a broad range of information
management issues. Each year, Mark conducts dozens of seminars and training programs
for corporate and government institutions. He sits on several financial industry advisory
boards and has recently published Paradigm Shift: Seven Keys of Highly Successful Linux
and Open Source Adoptions.
About Advanced Systems Group
Since 1981, Advanced Systems Group (ASG) has been providing comprehensive consult-
ing services, successful storage and data management solutions, assessments, and
implementation services to help customers meet today’s IT & business challenges. In
particular, ASG focuses on customer needs, customizing unique solutions and success-
fully addressing companies’particular IT challenges. As a consistent member of the VAR
Business Top 500, ASG pursues active involvement in the industry, maintaining the
highest level of engineering certifications with partners and the vendor community.
Many organizations already
successfully leverage cloud
resources to avoid capital
expenses, achieve better
backup and recovery, meet
compliance mandates for
archiving, and access applica-
tions on a pay-per-use or
subscription basis.
²Gartner’s Hype Cycle Special Report for 2009 http://www.gartner.com/it/page.jsp?id=1124212
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