What is Cloud Computing?

Cloud computing is a type of computing that relies on sharing computing resources rather than having local servers or personal devices to handle applications.
In cloud computing, the word cloud (also phrased as "the cloud") is used as a metaphor for "the Internet," so the phrase cloud computing means "a type of Internet-based computing," where different services -- such as servers, storage and applications -- are delivered to an organization's computers and devices through the Internet.
 
Cloud Computing have gained a lot of interest recently. In simple English cloud computing is a concept that aims to enable end-users to easily create and use software without a need to worry about the technical implementations, software’s physical hosting location, hardware specifications, efficiency of data processing, and so forth. This paper is a little effort to understand the business opportunity Cloud Computing offers & also to explore the current scenario.

Cloud Computing Service Offerings

Infrastructure as a service (IaaS) displaces in-house servers, storage and networks by providing those resources on-demand.

Platform as a service (PaaS) adds a layer to the infrastructure, providing a platform upon which applications can be written and deployed.

Software as a service (SaaS) refers to applications running on cloud infrastructures, typically delivered to the end user via a web browser.
 
 
Characteristics of Cloud Computing
On-demand access. Cloud computing offers rapid fulfillment of demand for computing and has the continuing ability to fulfill that demand as required.
Elasticity. Computing is provided in the amount required and disposed of when no longer needed.
Pay per use. Much like a utility, cloud resource charges are based on the quantity used.
Connectivity. All of the servers are connected to a high-speed network that allows data to flow to the Internet, as well as between computing and storage elements.
Resource pooling. The cloud provider’s infrastructure is shared across some number of end customers, providing economies of scale at the computing and services layers.
Abstracted infrastructure. The cloud end customers do not know the exact locations or the type(s) of computer(s) their applications are running on. Instead, the cloud provider provides performance metrics to guarantee a minimum performance level.

Market Size & Project growth
Research outfit Gartner describes this opportunity as the most hyped subject in the IT industry. IDC, another leading firm, estimated that cloud IT spending was at $16,325 million in 2008 and would reach $42,270 million by 2012.CAGR of 27%. It means this Cloud computing will not even crack 10% of $493,173 million (by 2012) IT Spending 2 years from now. But the IT Suppliers have started focusing more on the cloud Computing and hence this could trigger the wave of the cloud computing from 2013.

Outlook and Future
Many of the current cloud end customers use price as their primary decision criterion. As a result, service providers’ offerings tend toward a least common denominator, determined by the realities of providing cloud services at the lowest possible price. At the same time, the cloud-computing market is becoming more crowded. Due to this many of the End users / Clients go by the lowest pricing decisions. I would suggest the decision should be made by careful examination of the cloud computing characteristics as described above. But whatever the analysts, rating companies say, I still believe this is an Opportunity in Its Infancy. Nevertheless to say this has got the huge potential to grow & great cost reductions for the companies in near future by 2012.To get rains with this cloud, service provider’s needs to realize the gaps in the service offerings & the Client/ Company CIO's needs to scale up towards this wonderful computing. Again this is going to be the next wave in the IT industry.