Seeing through the Clouds

You can’t visit a IT product or service related website these days without seeing some mention of the “cloud”. It’s the latest buzzword in the IT industry and it seems everyone is getting on the bandwagon – even Apple with their latest iCloud announcement. With all of these “clouds” around, it’s sometimes hard to see where you’re going. In this article, we’ll try and clear-up some of the confusion and put some sunshine back in your life.

So what is this “cloud” thing anyway?

Before I can explain what the cloud is, we need to understand a little bit about the market. Before the internet hit the masses, everything was on-premise. You had your own Servers and PCs and you bought either shrink-wrapped software (like MYOB or Microsoft Office) or an expensive niche application that came with it’s own entourage of pre-sales, business and technical consultants (think SAP, PeopleSoft, Oracle Financials – all designed for the enterprise).


Vendors have realised that they can get their software to the masses and make a lot of money in the process by web-enabling their applications and hosting the applications themselves.?Cloud computing is simply about economies of scale.?It’s a way for vendors to target a bigger market for less money and pass some of the saving on to consumers. What’s more is that none of it is new. Hosted services have been around for years – the only new thing in all this the term “cloud computing”. Clever marketing? You be the judge…

Let’s look at email as an example application. Traditionally a company would buy an email application and run it on one of their own servers. This would require A) a server, B) email software, C) someone to setup and support the server and software and D) a network connection to the internet to send and receive the email. You can still do that today if you like, but, you also now have the option of using someone else’s server, software and support (i.e. requirements A,B and C are no longer required). All you need is the network connection and a suitable web browser.

As you can imagine, by eliminating the server, the email software and the support costs, we’ve reduced the total cost of ownership for email to a pretty low amount. In fact, if you’re a relatively small business and don’t have any complicated email requirements, you can get your email up and running on your own domain name (e.g. for the cost of the domain and your internet connection (or about $30 a month). Now that’s cheap!

So… the short answer is that the cloud is not really a cloud at all – it’s someone else’s computer(s) and software being served up to you over the internet. I suspect the name came from the fact that when techs starting drawing the internet in network diagrams they used an image of a cloud to represent it. The services you use in cloud oriented products aren’t actually in the internet but connected to it – just like you are now. One of the points that seems to be common in cloud solutions is that you have little visibility of where the servers are that you’re connecting to and where the data you store physically resides. That raises a host of issues that we’ll cover later.

Types of cloud services

Software as a Service (SaaS) is a classic example of Saas. is Customer Relationship Management application that run and allow you to login to, and connect with, over the internet. All of your data is stored on’s servers and they manage the servers, backups and all of the software involved in delivering the application to you over the net. We’ll discuss the pro and cons of this later on.

Infrastructure as a Service (IaaS)

Put simply, this is just someone else hosting your Virtual Server infrastructure. You still need to manage the operating system installed on the virtual server and you need to manage the applications installed on top of that (such as Microsoft Windows and Exchange 2010).

Platform as a Service (PaaS)

A PaaS product generally includes both IaaS and SaaS to deliver a private cloud solution. Let’s go back to the email service. For email, Google Mail is an example of a SaaS product – you use Google’s servers and applications and all of your data is stored “somewhere” on one of Google’s many servers, somewhere in the world. Many other customers are using the very same application, physical and virtual server that you’re using.

In a PaaS email solution, you’re getting your own email server that isn’t shared with anyone else. It’s managed for you so you don’t need to worry about how to administer the server, the operating system or the email application. Basic admin functions like adding and removing users and creating email aliases and backups are provided in an easy to use dumbed-down administration tool. The key here is that your email server is “your” email server – nobody else is using it.

Advantages and Risks

The advantages to using cloud based services are reasonably obvious and as such don’t warrant much explanation. Some of these are:

  • low up-front cost
  • operating cost vs capital expense
  • no staff costs for support and maintenance
  • accessible anywhere the internet is available
  • services generally have high up-time (high availability)
The risks are not so obvious to the layman. These include:
  • lack of control.
  • no certainty of data security – someone else is managing it for you. Look at the recent hacks of Sony and Australian University sites.
  • what laws apply to the privacy and protection of your data?
  • data usage costs can be high and will increase as you add more users.
  • the internet becomes the single point of failure. If your connection goes down, so does your ability to access your data
  • costs can quickly accelerate beyond that of hosting internally or using a tradition Managed Service provider as your business grows. Planning becomes more important.
  • what if the company providing your cloud goes bust? what happens to your data?
  • potentially more difficult to migrate your data out of and into other services (e.g. you want to move from one email provider to another)
  • bug fixes can be slow to be fixed
  • applications can be limited in functionality and customising as your business grows is sometimes not possible. SaaS is more often than not, a one-size-fits-all approach, unless you’re prepared to pay a premium.

The advantages and risks above are by no means a definitive list but should provide you with some food for thought when considering using a cloud solution within your business. I should also point out that I’m by no means against cloud services. Providing you know and accept (or find a way to mitigate) the risks, cloud computing can be a very effective solution for reducing IT costs.

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