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Understanding the Basics of Cloud Computing

Earlier in the year I posted a blog entry discussing why manufacturing companies should consider using cloud based environments. One thing I didn’t do in that particular post was to discuss exactly what a cloud computing environment is made up of and what benefits companies can expect to receive by adopting such services. There are many different resources on the internet relating to the subject of cloud computing, so I thought it would be useful to pull together a brief introduction to cloud computing in one blog entry. I will use this blog entry to cover the basics of cloud computing and in my next blog entry discuss how GXS’ Integration Cloud Platform, GXS Trading Grid, can help manufacturers improve and simplify their B2B processes.

So first things first, what is a cloud computing?, well as you would expect you could ask five different people and get five different answers but one of the more succinct definitions that I have heard is from the analyst firm Forrester Research. They define cloud computing as “a standardised IT capability (services, software or infrastructure) delivered via internet technologies in a pay-per-use, self-service way”.

Now definitions are great, but in this case I believe the easiest way to describe a cloud environment is to simply define the characteristics of how it operates:

  • Dynamic – one of the keys to cloud computing is on-demand provisioning
  • Massively Scalable – The service must react immediately to your needs
  • Multi-tenant – cloud computing, by its nature, delivers shared services
  • Self-service – As a user, you can use the service as often as you require
  • Per-usage based pricing – You should only ever pay for the amount of service you use
  • IP-based architecture – cloud architectures are based on virtualised, internet based technologies
Over the past couple of years, efforts have been made to define the different types of cloud computing environments that are available and how they should be used by different ‘cloud consumers’:
  • Public Cloud – available to the general public or large industry group and is owned by an organisation selling cloud services
  • Community Cloud – shared by several organisations and supports a specific community that has shared concerns
  • Private Cloud – operated solely for an organisation or company
  • Hybrid Cloud – combination of two of the above, they remain unique entities but are bound together by standardised technologies
As cloud technology has evolved in recent years a number of technology layers have been introduced within the cloud and the following definitions of ‘cloud layers’ seem to be pretty much accepted by many of the analyst firms around the world:
  • Infrastructure-as-a-Service (IaaS) – this delivers the computer infrastructure, typically via platform virtualisation-as-a-service.  It is an evolution of virtual private server offerings.  IaaS includes servers, memory and storage that allow a customer to scale up or down as required by the business. Infrastructure can be used by customers to run their own software with only the amount of resource that is needed at a given moment in time.
  • Platform-as-a-Service (PaaS) – delivers a computing platform and/or solution stack as a service, often consuming cloud infrastructures and sustaining cloud applications. PaaS allows users to use the cloud to develop new applications without the need to have the software or infrastructure purchased in-house. Essentially provides anything to support how a company builds and delivers web applications and services in the cloud.
  • Software-as-a-Service (SaaS) – delivers software over the internet without the need to install applications on the customer’s own computers.  SaaS applications are run from one centralised location which means that the software can be accessed from any location over the internet.  Centralised management of applications helps to simplify maintenance and applications are consumed on a pay-as-you-go basis.
The web based nature of cloud computing environments means that it is able to offer companies and users significant benefits over more traditional behind the firewall software environments:
  • Global Accessibility – the cloud platform can be accessed anywhere in the world by simply using an internet browser
  • Easy to Maintain – upgrades to the environment are managed and distributed from a central location thus eliminating the need to upgrade on a local basis
  • Scalability – the platform can be expanded or contracted depending on the requirements of the business
  • Rapid Deployment – new users, plants or offices can be brought online very quickly thus providing a significant competitive advantage, especially in emerging markets
  • Flexibility – new modules can be introduced to the cloud computing environment with ease
  • Low Cost – the pay-as-you-go nature of cloud environments means that IT and B2B teams have improved long term predictability of costs to operate the infrastructure
  • Consistent User Experience – users are presented with an identical environment irrespective of where they login from and it can be tailored on a role by role basis
  • Central Authentication – access to the cloud environment can be managed from a central location, thus simplifying user administration
As well as generic business benefits, cloud computing offers many other benefits when compared to more traditional behind the firewall type infrastructures.  The benefits of moving from a traditional IT environment to a cloud based environment are summarised in the table below:
So you want to implement a cloud computing environment?, but how do you persuade your Financial Director or Chief Financial Officer that cloud computing can help bring significant cost savings to the business, the table below summarises on-premise versus cloud computing related costs that can be expected.
Finally there are many green benefits of cloud computing to consider.  Earlier in the year I wrote a blog on this subject , but in summary cloud computing allows companies to:
  • Lower power consumption requirements, as in-house data centres and server infrastructures can be disbanded
  • Less computer/network equipment packaging to dispose of as new equipment arrives at your office or business location
  • Minimises travel requirements for IT implementation teams as all systems are administered and deployed from a central location
  • The light weight nature of cloud computing applications means that they can be accessed by low power mobile devices such as smart phones and tablets
  • Less paper flows across the supply chain as all trading partners will be exchanging business documents electronically
I realise that I have only scratched the surface in terms of understanding about cloud computing but hopefully this blog entry has been useful for you. In my next blog entry I will focus on how B2B environments can benefit from cloud computing and in particular how a PaaS type environment such as GXS Trading Grid can help move your company’s B2B environment to the cloud. In the meantime if you would like to learn more about GXS cloud offerings then please click here.
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Mark Morley

As Director, Strategic Product Marketing for Business Network, Mark leads the product marketing efforts for B2B Managed Services, drives industry and regional alignment with overall Business Network product strategy and looks at how new disruptive technologies will impact future supply chains. Mark also has over 23 years industry experience across the discrete manufacturing sector.

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