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Cloud computing: The new “it” in IT?

March 29, 2011
By Wally Kowal


What is cloud computing and how will it affect manufacturers? “The cloud” is changing how IT solutions are delivered, and providing opportunities for companies along the way.

According to Gartner, an IT research and advisory firm, today’s cloud computing market is estimated to be more than $68 billion US, and this is expected to grow to over $148 billion US within a few years. If you think cloud computing isn’t for you, you probably don’t realize that you are already using it if you use an outside e-mail provider, host your website with an outside company, or back up company data on the Internet. Cloud computing is based on the idea of “virtualization,” where many users are able to share hardware in a manner that looks like they are the only ones on a machine. Software is used to create multiple “virtual machines” on a single server, with each virtual machine totally separate from the others.

Most servers are used at only a fraction of their actual capacity. Studies from IBM suggest that if you buy a server today, you will likely use it at less than 15 percent of its capacity. Virtualization allows five users to share that machine with capacity to spare. Each one thinks that they are on their own machine, and elaborate security precautions keep each user’s applications and data separate.

Cloud computing also gives end users easier access to computing resources when they need it, paying only for what they use. Web-based management portals allow users to create, manage and consume computing resources without detailed technical knowledge of those resources. Advanced platform monitoring, management and billing systems allow companies to monitor and control complex computer environments, and bill for multiple simultaneous users.


Defining cloud computing
Cloud computing is simply using servers, storage or software when you do not own those servers, storage devices or applications.

There are three types of cloud computing:
• Infrastructure as a Service (IaaS) is the provision of virtualized servers that replace the traditional computer servers that companies own today. These are bare-boned virtual machines that can be configured with various CPU, memory and storage configurations.
• Platform as a Service (PaaS) is the provision of virtualized pre-configured web and database servers and secure storage. The most common of these is the ubiquitous web server, but this also includes database servers and e-mail servers.
• Software as a Service (SaaS) is the provision of services such as e-mail, applications like, and specialized software solutions through a web browser.

Public versus private cloud
Cloud computing can be delivered as a public cloud or as a private cloud (or even as a mix of both).

Public cloud computing is delivered by large corporations like Google, Microsoft and, who each have tens of thousands of servers located in data centres around the world. Their scale allows them to offer virtual servers at a fraction of the cost of a physical server. A virtual machine from a public cloud provider can cost as little as 25 percent of the cost of buying that server yourself.

Private cloud computing is applying virtualization and advanced platform management capabilities within your own data centre. If you already have a sizeable data centre and your staff have the necessary expertise, you can build your own cloud and take advantage of the power and cost savings of cloud computing. You may not reach the efficiencies of large public cloud providers, but the savings can be significant.

Not every software application can benefit from virtualization. Some use so much machine capacity that they cannot share a server with another user. Other applications use low-level hardware or software features of a specific server model and cannot operate on a “generic” machine.

There is a clear perception that public cloud providers are not as secure or reliable as dedicated servers. However, virtualization technologies have been around for years, and the state-of-the-art is as secure as any traditional computing environment. If you are unsure about the reliability of a cloud provider, try moving some non-essential applications to the cloud. If you are happy with your experience, you can comfortably move more of your IT infrastructure to the cloud. Unless your servers are installed in a dedicated data centre, your own IT infrastructure is likely less reliable than a public cloud. Most public cloud providers have their servers located in data centres with redundant power feeds, multiple backup generators and high-tech security systems.

An emerging trend is hybrid clouds. Critical applications or data can be kept on a private cloud, but that cloud is linked to a public cloud to take advantage of its flexibility, scalability and cost savings.

Cloud computing is changing the way companies operate. Six-month installation projects for new applications have been replaced with software on demand. Waiting for your systems administrator to order and install a server has been replaced with virtual machines that can be created in minutes. Writing a capital investment business case for $40,000 worth of computer hardware has been replaced with virtual servers rented by the hour. Buying a $5,000 design application that will be outdated in one year has been replaced with a monthly subscription to a software service that is always up-to-date.

The single most important opportunity for cloud computing is not that it lets you do the same things better, but that it gives you the opportunity to do things that you never before imagined. What can you achieve if you provide unlimited computing and storage resources to your staff? What could your staff do if they could securely access your company data or software from anywhere in the world over the Internet? What can you do with the money you save when you no longer have to invest in expensive IT hardware?

Wally Kowal is president and founder of Canadian Cloud Computing Inc. (, a cloud infrastructure provider located in Waterloo, Ont.