“Cloud Computing: CNBC Explains”

September 3, 2011

To hear the experts tell it, cloud computing may be the most innovative technology development in decades, or should be dismissed as a marketing tool for existing know-how that’s as old as computers themselves.

We can’t settle the debate on the uniqueness of cloud computing, but there are some issues that can be resolved without controversy: just what is cloud computing, who uses it, and what are the benefits and risks?

What is Cloud Computing?

The official definition from the National Institute of Standards and Technology reads: “Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications and services)that can be rapidly provisioned and released with minimal management effort or service provider interaction.”

Translation? Accessing the Internet anywhere, anytime and being able to use any or all of the data and applications that you want.

“Consumers don’t completely understand it yet and there’s been a lot of hype, but it’s having your data or software stored somewhere besides your PC or Mac and being able to get it through the Internet,” explains Chris Geiser, CTO of The Garrigan Lyman Group, a digital marketing and advertising agency.

When the technical jargon is stripped away, cloud computing can be grasped on its basic level— anytime, anywhere computing—without the user ever having to know much about the technology.

How Does It Work?

In simplest terms, cloud computing involves delivering hosted services over the Internet. The service end is where the data or software is stored and the user end is a single person or company network.

“Cloud computing minimizes the hardware, like memory, and application requirements, like word processing, for the users and pools those resources in the ‘cloud,” says Danny McPerson, CSO of Verisign.

So, a company in the business of hosting has specified data stored on its servers, a user fires up their computer, connects to the web (and to the servers holding their data), clicks on their application software and away they go.

“The economics are compelling and as Internet speeds increase, cloud services will continue to grow.”

Mike Marcellin
Juniper Networks

What gets somewhat mind-numbing are the kinds of storage systems services used in cloud computing. There are three basic ‘alphabet soup’ levels of storage capabilities, but there’s no real need to go into those here. Any or all three can be offered by the same provider—for a price.

And there are so-called public, private or hybrid clouds; public meaning the data is accessible to anyone, private being subject to a company’s firewall or security system, and hybrid, which combines both public and private.

But it’s fairly safe to say that most users are more than likely to be content knowing their data is stored somewhere other than their computer and they have access to it whenever and whereever they go online.

Who Uses Cloud Computing?

You are probably using it right now. If you use email, or go to a social network and post photos, access online document software, or use your company’s hardware/software, you’re probably using the cloud. You may also use it to store online tax or financial records. You can also use cloud computing to back up files for storage off your PC or Mac.

Businesses such as hotels use it for consumers to make reservations and a major electronics retailer is using it to fill their online orders. Sending a picture to a Facebook friend today? You are headed for the clouds.

Where Did Term Cloud Computing Come From?

The concept of cloud computing dates back to the 1960’s. The phrase originates from the cloud symbol used by flow charts and diagrams to symbolize the Internet. The diagram to the left underscores the idea that any computer connected to the web has access to a pool of computing power, applications and files.

The first reported public use of the term came in August of 2006 at a search engine conference in San Jose, Calif. when then GoogleCEO Eric Schmidt described one approach to data storage as “cloud computing.”

But in a sign of the ever-competitive Internet wars, research shows that Schmidt may have been trying to pre-empt Amazon,which was about to release its Elastic Compute Cloud system later that month.

Who Provides Cloud Computing Services?

Dozens of firms are providing ‘clouds’ in the U.S. and other countries. They generally fall into three categories of service: software, storage and computing power, or platform providers that give site developers tools to build and host applications. Some do all three. Big or small, all see this as a natural way to make money in a very competitive field.

Some names might be surprising as they may be better known as content providers or consumer sites. Here are just a few of the major players:

Amazon: considered one of the innovators in cloud computing since it began offering services in 2006. Amazonas thousands of small business and individual users along with customers like the New York Times  and Eli LillyGoogle: in what might have been a strike again Microsoft the internet search giant launched Google Apps in 2007. Customers include small businesses and colleges like Northwestern University.

For more information, please visit: cnbc.com.