Cloud computing business is a method for providing IT infrastructure, operating systems, software and applications through a remote data-centre that is managed by a third party where the user accesses these through the internet. The main cloud computing business benefit is that organizations are no longer liable for the upfront and ongoing costs of managing their IT function but simply pay a recurring fee. Providers not only offer the benefits of operating at huge scale but also ensure that the latest technologies and techniques are used when providing their services. An organization only needs to buy as many computing resources as they require and pays on a subscription basis.

Cloud computing is effectively providing IT functions to businesses as a service and mainly involves three models:

• Infrastructure as a Service (IaaS) – this represents the hardware and physical elements of an IT function such as servers, networking components, switches and other elements as well as the staff to manage them (such as administrators and network architects). Renting this from the cloud provider means that the organization does not need to buy and maintain these elements.

• Platform as a Service (PaaS) – platforms typically refer to application development environments that allow software engineers to create, run and debug applications without having to build the computing infrastructure required.

• Software as a Service (SaaS) – this involves the provider offering the software applications that an organization uses to perform its data processing functions on a day to day basis. The cloud provider takes care of all licensing fees and maintains the latest version of the software on a centrally located platform. Sometimes the data is also hosted on the cloud provider’s databases.

Cloud computing is significant for businesses of all sizes because it makes it cheaper, simpler and faster to create and maintain state-of-the art computing facilities that can be scaled up or down as their circumstances change. The principal benefits are:

• Cost – significant cost savings can be achieved at every level of an IT budget.

• Cash Flow – payments for cloud services are made based on usage and are paid on a monthly or years basis – there is no up-front capital expenditure – meaning cash is available for other purposes.

• Flexibility – computing resources and applications can be added or removed at will providing ultimate flexibility without worrying about pacing for unused resources.

• Scalability – resources such as data storage, processing power, application access and bandwidth can be scaled up or down on demand.

• Access – because computing resources are accessed through the internet the organization can gain access wherever an internet connection is available.