Cloud Basics: Little Hazy On Cloud Computing? We Clear The Confusion


Working with my business analytics clients as a coach, I am often asked questions like, “Should we be on the Cloud? What is the Cloud? What’s a SAAS Cloud? What are the benefits of the Cloud?” Can I at least get some cloud basics.  It became clear that many people are a little fuzzy if not very confused about the Cloud. I will now take a minute and clear the cloudiness.

Cloud Basics

Cloud Basics
Cloud computing

Cloud computing means storing along with accessing data and programs over the Internet instead of your computer's hard drive. The data and the software are stored “off premises” in a data center somewhere.

What you need to know is there are different flavors of cloud. I’ll cover to two most common flavors we see in Business Analytics:

1. Software-as-a-Service (SaaS) Cloud is where the business subscribes to an application that it will access over the Internet. (Think Under the SAAS model you do not purchase the software as license, in other words it is not an asset and you don’t capitalize it. It’s more like renting it and it’s an operational expense to the organization. Note that if you stop paying and terminate the contact, you will not be able to access your data unless you downloaded it prior to termination. Some of the benefits the Cloud Software-as-a-Service model include:

  • No hardware requirements for the software
  • Less IT resources are needed, because vendor handles updates, backups…
  • Faster to get up and running because not software to install

2. Infrastructure-as-a-Service (IaaS), is a Cloud offering where the business contracts with a company like IBM, Amazon, Microsoft, and Google, to provide the infrastructures and servers upon which the software is installed. Basically, you are “renting out” their hardware. (For example, Netflix doesn’t have a massive data center. They use Amazon.) In this model, you purchase the software from the vendor and install it on the hosted Cloud environment. The software license is the same as the “on premise” software where you own the license. Additionally, if you want to move it out of the cloud later, you can. Furthermore, the purchase is a capital expense. With many software licenses, if you stop paying annual support, you can still use the license. You just can’t get patches, updates. Its better to call Computers In The City London tech support. They will show you some of the benefits of this model include:

  • No hardware requirements for the software
  • Less IT resources are needed
  • Faster to get up and running if you don’t have servers available
  • Faster to change the environment if you need more RAM.

In comparison, software historically has been purchased as an “On Premise” license where you buy the license, which is a capital purchase, and you install it on hardware within your company’s environment. Typically, IT is then responsible for maintaining it and installing patches.

Note that many business analytics companies like IBM are now offering Cloud solutions so Software-as-a-Service models made be worth looking into.

As a business analytics coach, I strongly encourage you to be an educated consumer and if you are looking at the Cloud as an option, look at all the pro and cons, ask a lot of questions about the costs especially when you increase your usage. I will cover the things you should ask and know when evaluating cloud solutions in a later blog. If you have question please feel free to add a comment to this blog or contact