You own or operate a business and notice that the costs of installing, powering, cooling, and maintaining your computing resources keeps going up.  Sure, computers themselves cost less these days than they used to, but the real estate to house them, the power to run and cool them, and the staff to protect and maintain them 24×7 is still a major expense for most of you.

On top of that, more and more of your workers and key-contributors don’t come into the office to work every day.  Instead they travel and work from Starbucks, hotel rooms, or their home offices.  But, they still require remote access to the same information and productivity tools as they have in the building.  That’s another large expense when you consider buying laptops, productivity software, connectivity, and providing security AND compliance controls if you happen to be one of those lucky companies that must comply with SOX, HIPAA, PCI, and other regulations.

A key terms may help you get your hands around these ideas:

“Cloud Computing” is a relatively new concept that embraces the whole Internet in a general sense, but specifically refers to locating company data (and usually the programs that it depends on) out into “virtual” space – somewhere you rarely see let alone visit.  By virtual space we are just suggesting that the physical location itself where the information is housed is ubiquitous – and is independent of your facilities.  Rather we presume that the Cloud Computing vendor has adequate infrastructure, power, cooling, and manpower to cost-effectively and efficiently operate, deliver, and protect your “stuff” at a location that is secure and away from most property threats.  We also need to trust another set of vendors to provide private or Internet connectivity to these places that assure us secure access and enough connection speed (bandwidth) to keep us (and all our co-workers) productive and happy.  They also assure the privacy and protection of our data.

A popular example of “Cloud Computing” to emerge in the past few of years is Google Apps.  You log in to Google and can word process, do a spreadsheet, build and post your own website, and collaborate with others in your workgroup or Company in cyberspace.  All you need is a laptop or desktop and a connection to the internet.  Such connections, some free and others subscription or fee-based are usually available in many private offices, at Starbucks and airports, and in your hotel room or home office as well.  Google builds and maintains the applications and offers them to you and other members of your team as a service for a very reasonable fee, sometimes as low as $5 per month per user.

If you’ve ever installed financial or business process applications you already know that $5 per month per user is a real bargain.  Not that Google Apps will replicate the complexity or sophistocation that an Oracle, SAP, or Microsoft Dynamics will.  But even in these examples, all three of the corporations developing these complex business systems are concurrently developing the means for you to use their software “engine” or “platform” as a “service” (SAAS) with a nominal usage fee charged as a subscription or fee each time you or other users connect.  Another example is Customer Relationship Management (CRM) software as a service (SAAS).  It exists only as a service platform.  You can’t own it or install it onto your own systems at your location.  Instead you provide connectivity and Internet security for your users so they can connect to the service from anywhere.

There are many new flavors of Cloud Computer in 2012:  SAAS or Software as a service, PAAS or Platform as a Service, and TAAS or Technology as a Service and an emerging host of new X-AAS acronyms

SAAS is a fully developed application that is ready to use, usually on a subscription bases.  An individual or organization pays a one-time, monthly, or annual  fee to use the application.  The transaction and user data created is then saved to your workstation, a local company server, or in a datastore in the Cloud.  One example is Turbotax online, which is available from Intuit, the makers of Quickbooks accounting software.

PAAS or Platform as a service is a platform applications standard like Microsoft .NET.  The service enables a dispersed “virtual” development team to build and deploy applications that utilize that platform.  Your development efforts can be spread into various regions around the world at costs that leverage offshore talent rates far lower than domestic.  By carefully selecting and deploying your development teams, you can retain control and costs.

TAAS or technology as a service is a new term for what used to be called “hosting”.  The TAAS vendor provides hardware and servers with or without operating systems that are rented whole or in-part to you or your company.  These hardware environments are highly scalable and can react to rapid computing demand changes.  As well you can also decrease the size of your hardware footprint seasonally or according to your own demand schedule to meet various customer needs. You rent or lease a “cage” or “rack” from the provider.  It is equipped with redundant, conditioned power, redundant ethernet (or fiber optic) connections to the “cloud”, physical security including access control and biometric authentication, and creature comforts like break and game rooms or temporary work spaces for your staff to build, maintain, upgrade, or perform technical services on your systems.  The management of these systems can be outsourced or handled by your own staff remotely.

“Virtualization” is the process of converting physical computing resources into a transportable software “image” that can be reused in a variety of ways:  quickly installed onto a virtualization hardware “platform”, rapidly moved from one platform to another, copied, archived, or duplicated for efficient “disaster recovery”, and managed from a centralized administration resource.  Stated simply, your traditional hardware server’s settings, operating system, and applications are copied “imaged” and then stored elsewhere for future use.  Changes are updated regularly.  When needed, these copies of your data center functional environment can quickly be deployed and become available wherever needed.

Regardless of whether you house your own hardware or collocate it, if your server hardware is more than 3 years-old, you need to consider a virtualization and consolidation strategy.  This will enable you to mutually install upwards of 10-12 “virtual” servers into a newer “multi-core” server the same footprint or smaller than your legacy hardware.  The power requirement will be 70-90% less as will be the cooling requirements for the space where you would have housed it.  The space savings are comparable and will reduce your data center footprint substantially.  Placed off-site during the migration phase, your “green” savings will be even greater.  The costs for any additional connectivity costs usually will be re-captured in the first year or two of the post-migtration consolidated operations.

If the amount of data you store continues to increase rapidly, consider off-site storage combined with data de-duplication – the systematic removal of multiple copies of data within your systems.  This practice will reduce or eliminate storage creep.  Most often de-duplication is done during backup or archiving of your data.

If your operations depend upon 99.999 or 99.9999% up time for your company to be competitive, consider a disaster recovery, business continuity strategy that duplicates (or replicates) your data, programs, and system “states” both at your site and also off-site in case of a business interruption like an earthquake, plane crash, flood, or even sabotage by a disaffected employee.  In the event of a failure or incident, the systems can be architected so that operations will automatically switch to an alternate on-site or even off-site location and business transactions will continue as if nothing has happened.  Your customers and users will usually never know.

If your IT physical space, power, and maintenance costs are increasing at a rate that has caught your attention, consider moving or consolidating some or all of your IT resources into the “Cloud”.  Take it from a business owner who has chosen to be as “virtual” as possible, there are many interesting ideas for IT planning in 2012 that may surprise you AND affect your bottom line.

It is fascinating to me how 21st Century ideas are such knock-offs of common 20th Century stuff. Take Cloud Computing. Its roots lie in the mainframe computer world of the 1950s and 60s. The Eniac computer of John Mauchly and Presper Eckert at the University of Pennsylvania was a physically huge research tool utilized to solve Bureau of the Census compilation challenges. It was centralized due to size, cost, and its uniqueness. As that technology developed, connections to it were moved farther and farther away from Philadelphia as remote users wanted to purchase “shares” of its CPU cycles and to store small quantities of data on its discs and tapes. Even though centralization was a necessity, the extension of computing capability out to remote users increased utilization, revenue, and the natural proliferation of new devices and innovation. The devices of those days had tremendous computing capability and efficiency when compared to most common research and commerce practices. But over time, greater access to technology, capability and efficiency, stimulated demand and produced the technology revolution that followed through the end of the 20th Century.

The resulting developments produced mini computers from companies like IBM, HP, and DEC. They were smaller, more portable, and less expensive to operate. Rather than handling large computational tasks, they were built to supplant more manual accounting and transaction processing systems. The days of the coin box and ledger passed in businesses and offices. Later came the Apple/PC microcomputer introductions in the early 80s when the computer arrived in the household. Interestingly, the micro PC was NOT connected to the outside world at first. Instead it became a household (or office) appliance that was mostly self-contained. Again, these small, inexpensive devices were connected first to each other and then to larger systems in the same fashion as the early mainframes and minis. The difference was that now the microcomputer itself could compute on its own or share complex tasks with the other remote machines to which it connected.

Then came the Internet in the 80s and the emergence of thousands of hubs that now house varieties of mediated information. The Internet itself guaranteed the permanent connections among computing devices that we now take for granted.

But the Cloud. Come on! In my honest opinion, the term is such a silly marketing notion. That is because it really isn’t a new thing or even worthy of being branded. It is akin to branding the stars (the heavenly ones so I don’t confuse) as analagous to space travel. Of course there’s Star Trek to confuse the issue. But confusion reigns for the marketing world.

Rather, the Cloud has become synonymous with centralized enterprise utility computing of the Amazon, Google, Facebook, or Sony PlayStation flavor. We consumers can’t really see or appreciate it because the physical facilities where it happens – data centers and utility providers – are usually faceless buildings without windows where we are not invited or permitted access. Even the so called public cloud facilities are accessible to us only via the internet. They are often located in other countries or even multiple locations throughout the world.

So when you see the term Cloud Computing it usually infers the following, for the uninitiated consumer:

A place to store your files or photos
A branded service to back-up your computer
A social network provider like Facebook or Linked In
A search utility like Google or Yahoo or Bing or Ask It or Dogpile
Online applications like Google Apps or TurboTax

Thus the “Cloud” has become a convenient means for marketers to refer to a single word to describe what will eventually become a better defined range of products that we, consumers, can identify and use -obviously for a price – as time passes.

But aren’t most of them “free”? More on Internet revenue and who actually pays on an upcoming blog.