Simplifying the Term 'Cloud Computing'

The definition of cloud computing is in the eye of the beholder, yet one industry observer offers a clear (if flexible) explanation.
Few terms have captured as much attention and caused as much confusion among IT and business decision-makers as ‘cloud computing’.

The Wall Street Journal even published an article back in March to illustrate this point entitled, The Internet Industry Is on a Cloud -- Whatever That May Mean.

I must admit, when the term “cloud computing” began to be used more frequently about a year or so ago, I was apprehensive. I wondered whether the foggy image it invokes would backfire and set back the rapid growth of web-based, on-demand services such as Software-as-a-Service (SaaS).

Let’s face it, there’s nothing harder than a cloud to get your arms – or head – around. Especially, if you are an IT or business decision-maker in a Main Street organization just trying to keep your head above water and squeeze value out of your existing IT environment and legacy software.

Yet, the Wall Street Journal and nearly every other major business and trade publication have taken hold of the term cloud computing and produced a groundswell of interest – further fueled by today’s tough economic times.

For the most part, the press and other industry observers have been using cloud computing as a catchall term to encompass every imaginable web-based service. Tech companies – both hardware and software vendor, as well as established and emerging hosting and service providers – have also been happy to exploit this ill-defined marketplace by rebranding their various offerings as ‘cloud computing’ solutions.

The truth is that the definition of cloud computing is in the eye of the beholder. Geeks will spend hours arguing about the technical ingredients which are essential to deliver a cloud solution. And marketers will do whatever they can to usurp the term to achieve their sales objectives. In both cases, the debates can resemble religious conflicts.

Cloud Computing Defined

THINKstrategies has always sought to simplify the complexities of today’s technology trends and translate them into business terms. Therefore, we define cloud computing as: a set of web-based tools and services which permit users to acquire computing resources and development capabilities to build or support applications, or perform specific IT functions on a pay-as-you-go basis.

As we see it, the key characteristics of cloud computing are that it is Web-based, easily provisioned, highly economical, very flexible and reliably scalable.

Although this definition may seem innocuous, many techies are still determined to dispute any on-demand offering which doesn’t fit their specific definition of cloud computing. Their insistence that cloud computing must fit within narrowly defined technical parameters could derail its growth across a wider range of business environments.

For instance, many industry insiders and observers are engaging in an intramural battle regarding the differences between Software-as-a-Service (SaaS), Platforms-as-a-Service (PaaS) and cloud computing.

We see cloud computing as a broad set of loosely-coupled, web-based enabling tools and services which have emerged as a result of the success of SaaS. If it weren’t for the tangible business benefits being delivered by SaaS ‘packaged’ applications, we wouldn’t even be talking about cloud computing today.

SaaS not only demonstrated that reliable, scalable and secure business applications could be delivered via the Web, SaaS vendors proved they could build a viable business model that is sustainable despite today’s tough economy and unlike the application service providers (ASPs) of the past.

Where does Platforms-as-a-Service (PaaS) fit into this on-demand services world?

While the rapidly growing cloud computing world allows companies to cobble together elements from a variety of sources, PaaS vendors are offering an integrated set of development and delivery tools and services which permit an independent software vendor (ISV) or user organization to build their own SaaS solutions.

I don’t expect everyone to adopt our definitions for these quickly evolving terms, but I hope that the tech and software industry doesn’t continue to overcomplicate and obscure the fundamental business value of the cloud computing idea and rapidly growing array of powerful offerings.

Jeff Kaplan is Managing Director of THINKstrategies (, an independent consulting firm focused on the business implications of the on-demand services movement. He is also the founder of the SaaS Showplace ( He can be reached at

Tags: cloud computing, services, software, support, SaaS

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