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Cloud computing is the next big trend in the rapid development of World Wide Web (WWW). "It’s become the phrase du jour,", the buzz phrase that most IT people would crave to be part of thanks to its major supporter – Google Inc. The problem is that (as with Web 2.0) everyone seems to have a different definition on the phrase. As a metaphor for the Internet, "the cloud" is a familiar cliché, but when combined with "computing," the meaning gets bigger and fuzzier. Some analysts and vendors define cloud computing narrowly as an updated version of utility computing: basically virtual servers available over the Internet. Others go very broad, arguing anything you consume outside the firewall is "in the cloud," including conventional outsourcing.

Cloud computing comes into focus only when you think about what IT always needs: a way to increase capacity or add capabilities on the fly without investing in new infrastructure, training new personnel, or licensing new software. Cloud computing encompasses any subscription-based or pay-per-use service that, in real time over the Internet, extends IT’s existing capabilities.

Cloud computing is at an early stage, with a motley crew of providers large and small delivering a slew of cloud-based services, from full-blown applications to storage services to spam filtering. Yes, utility-style infrastructure providers are part of the mix, but so are SaaS (software as a service) providers such as Salesforce.com. Today, for the most part, IT must plug into cloud-based services individually, but cloud computing aggregators and integrators are already emerging.

SaaS is a type of cloud computing that delivers a single application through the browser to thousands of customers using a multitenant architecture. On the customer side, it means no upfront investment in servers or software licensing; on the provider side, with just one app to maintain, costs are low compared to conventional hosting. Salesforce.com is by far the best-known example among enterprise applications, but SaaS is also common for HR apps and has even worked its way up the food chain to ERP, with players such as Workday. And who could have predicted the sudden rise of SaaS application such as Google Apps and Zoho Office?

While cloud computing seems to offer a new perspective as to how people use their computers, the major concern (similar to the rise of open-source apps) is the lack of security and privacy measures by the providers. Until this is addressed, its proponents will have to expect sceptical views from various parties in the IT industry. 

Adapted from: http://www.infoworld.com