Wikipedia - Cloud computing is Internet (' Cloud ') based development and use of computer technology (' Computing '). The cloud is a metaphor for the Internet (based on how it is depicted in computer network diagrams) and is an abstraction for the complex infrastructure it conceals  . It is a style of computing where IT-related capabilities are provided “ as a service ”  , allowing users to access technology-enabled services from the Internet ("in the cloud")  without knowledge of, expertise with, or control over the technology infrastructure that supports them  . According to the IEEE Computer Society "It is a paradigm in which information is permanently stored in servers on the Internet and cached temporarily on clients that include desktops, entertainment centers, table computers, notebooks, wall computers, handhelds, etc."  . “
No Consensus in the industry for a good definition of “Cloud computing” . Today anything and everything internet will come with a cloud computing logo
My Definition: If the time difference between - your application needs more capacity and gets more capacity is greater than instantly it is not cloud computing. i.e if there is no programmatic way to provision hardware ,no pooled capacity and even worst a purchase order to get new hardware.
Changes the economics of Computing from being a Capital investment to Utilities (You buy electricity you don’t buy generators )
Changes the way software is developed – Hardware provisioning , Deployment and Scaling now part of developer lifecycle as a Program / script as compared to a Purchase order
Automates a whole bunch of infrastructure related tasks and activities leading efficiencies and cost savings
But it is not all about sharing of resources. It really boils down to cost savings as a result of automation and changing the SDLC
How is it different from ASP?
The ASP value-add was the typical value you get from an outsourcing company. Leverage Knowledge base , trained manpower and some shared infrastructure resources to guarantee reliability of operations and potential cost savings
Cloud Computing is like taking the ASP concept to the next level with zero to little amount of “People Services” and focus on the Computing as a Utility
Market Analysis Bare Metal People Process based hardware provisioning HaaS – Hardware as a Service Programmatic Interface for Hardware Provisioning PaaS – Platform as a Service (Hardware Provisioning Hidden – Automatic Scaling) SaaS – Software as a Service (Platform , Scaling and Hardware transparent) Flexibility of Offering Google Apps Increasing Virtualization Gmail Salesforce.com Amazon EC2/S3 Sun Caroline Force.com Google app engine Amazon Simple DB EDS (Infrastructure Outsourcing) In house hosted servers
“ there will be small number of big players and a large numbers of small players in the cloud computing space ”
– Dr. Eric Schmidt , CEO Google
“ we had enough complexity inside Amazon that we were finding we were spending too much time on fine-grained coordination between our network engineering groups and our applications programming groups. Basically what we decided to do is build a [set of APIs] between those two layers so that you could just do coarse-grained coordination between those two groups. Amazon is, you know, just a web-scale application. “
- Jeff Bezos , CEO Amazon on “how did Amazon end up creating AWS leaving the big iron vendors behind”
The world needs only five computers.
- Thomas Watson , CEO IBM (1943)
- and then re-phrased by Greg Papadopoulos – CTO Sun Microsystems
“ there will be, more or less, five hyperscale, pan-global broadband computing services giants. There will be lots of regional players, of course; mostly, they will exist to meet national needs. That is, the network computing services business will look a lot like the energy business: a half-dozen global giants, a few dozen national and/or regional concerns, followed by wildcatters and specialists.”
In my diagram below – There will be one layer added above the SaaS layer , which will be the device layer that will be realized as a result of everything moving to the cloud - Networked Refrigerators , Remote Controlled Vacuum Controllers or any and every device on the network were interesting discussions uptill now but will become a reality with the cloud.
The above is exactly what happened with the build-out of the last big grid – electricity in the 20 th century. A hundred years ago, when Tesla, Westinghouse, Insull, and others were building the electric grid - companies viewed the effort in terms of the cost reduction to their business: in particular, the power they needed to run the machines that produced the goods they sold. But the real revolutionary aspect of the electric grid was not the way it reduced the cost structure, but the way it created new businesses altogether. We saw an avalanche of new products outfitted with electric cords, many of which were inconceivable before the grid's arrival
Network Device Layer Growth Engine for the next generation