Cloud Computing - What Is It?

At OfficeDrop (a cloud based digital filing system and scanner software company), we realize that a lot of small business owners have heard of cloud computing but don't realize how it can help your business. For people that don’t know, cloud computing is a great way for small businesses to utilize IT resources without costs and responsibilities of physical infrastructure. Since we 've built our business in the cloud, and since our business is helping your business, we want you to understand what, exactly, this means.

Cloud Computing as a Metaphor

To explain the metaphor, the cloud is the internet – no big secret and computing is…computing. Essentially, cloud computing is a platform for accessing and utilizing your businesses IT via the internet. This means nearly all of your IT resources – your servers, data storage, software/ programs – are hosted on the internet. NOT sitting in your office. It used to be that all of your computing would have to be done by your own servers, hardwired to your business. Now that the internet is around, your servers don’t have to be hardwired, and you don’t even need to have your own. Instead, you can rent server space from anywhere in the country from people like Amazon, who have already paid the overhead. Utilizing this system with SaaS, which does the same thing with software, one could theoretically run an entire business from various cyber cafés (if those still exist) without purchasing any of their own personal hardware or software at all.

Why the Cloud is Great for Small Businesses

Cloud computing helps small businesses in a number of ways. In general, cloud computing offers a more versatile model both technically and economically. With cloud computing, you don’t have your own servers/hardware. On the economic end of things, operating in the cloud lets you pay as you go, and you only pay for what you use. So on one hand you have lower startup costs because you don't have to purchase expensive equipment when you are getting started. On the other hand, cloud computing allows for great scalability, since you don't have to keep buying servers every time you add an employee or a new software system. It’s the scalability of cloud computing that makes it especially effective with quickly growing small businesses. In addition, cloud computing removes the need for an IT expert on payroll. Unless your company is actually developing software, you don’t need the techies that would normally be running around putting out sever fires. Now, most small businesses are probably not going out and directly purchasing cloud computing units from Amazon. But where a small business can take advantage of cloud computing is in purchasing basic software like CRM, help desk, document management, email and more. Instead of purchasing hardware, buying software on a disk and hiring an IT professional to setup the hardware install that software a small business can purchase software over the internet - typically with no installation required - from a Software-as-a-Service provider. Usually this means that you've got a monthly contract instead of a big up front purchase. And, as we've already mentioned, you don't need to buy a server to host the software!

Oracle execs will try to convince the universe that the company "gets" cloud computing with a series of cloud computing forums kicking off February 23 in North America.

The company has its work cut out for it.

Oracle CEO Larry Ellison caused a stir with his very vocal musings about the term "cloud computing," which has been abused and misused over the past few years. In his view, cloud computing is not a revolutionary departure in the computing model but an evolution of time and resource-sharing practices. Therefore, in his opinion, Oracle already is a cloud player because its database and middleware underlie such cloudy ventures as Salesforce.com's successful Software as a Service (SaaS) business and Apple's iTunes web store.

Oracle also joined the SaaS fray years ago with its own CRM OnDemand. That offering now accounts for more than 85% of Oracle's CRM sales, according to Ray Wang, analyst with The Altimeter Group. Still, the prevailing wisdom is that Salesforce.com has taken Oracle -- and the rest of the software world -- to school with its popular online sales force automation, customer relationship management software and with its Force.com Platform as a Service (PaaS).