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Cloud computing explained


“The cloud has enabled us to become a truly global firm.”


Aviva, Matthew Dines


“With the cloud, firms get a variable pay-per-use model. This is metered down at the hourly level, rather than a fixed monthly rate.”


AT&T, Jeff Shafer


“We see the cloud as reducing the administration and headache side of IT, allowing our leadership to focus on things that are critical to the business”


Aviva, Matthew Dines


Cloud computing is a term with which most people will be familiar. It continues to receive a growing amount of media attention. Most people are already interacting with various types of cloud computing services but despite this, cloud computing continues to prove an impenetrable concept to many people. In essence it is all about where your computing resources reside, who manages them and how you access and pay for them.


Traditionally, each office would have its own dedicated IT systems with their own servers, software applications (e.g. email system) and development platforms (e.g. website development platform). These have to be paid for, managed and maintained internally. There are high capital expenditures associated with purchasing the hardware and it can be time intensive updating and maintaining these systems. Also these systems are often underutilized as they must have the capacity to cope with the highest levels of traffic – this may only happen once a month or once a year.


Some large businesses have adopted a private cloud approach which means that they have consolidated all their disparate servers and applications into one company wide system which is maintained behind their firewall and can be accessed across their intranet i.e. they are sharing their resources between the different offices and business units. This means that they can make better, more efficient use of their resources because they are being shared by more people. It also means that their systems are uniform across the company.


Then there are public clouds. Instead of owning and managing your own IT systems and hardware you buy the service from specialist cloud providers and you access them from anywhere via the internet. Your customer relationship management systems may be run by one company and the information stored in the provider’s data centers and your email by another company. There are huge economies of scale associated with this model and therefore these providers can make more efficient use of their resources. These services can be provisioned remotely, quickly and in an on-demand, self provisioned manner and you pay only for what you need. This means that less time is spent managing systems and the IT team can focus on innovation to meet their business objectives.


The diagram on the next page visualizes these approaches, using an isolated business, an office block and a business park as analogies.


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