Cloud Computing – A Driving Platform for Business Strategies

This article focuses on the concept of cloud computing relating to business activities. Within this article you will walk through the importance of cloud computing for businesses, methodologies of cloud computing, efficiencies of cloud computing, how will it re-act in the long run and finally the infrastructure of cloud computing.


Nimantha de Silva (, Technical Writer, WSO2 Inc

Nimantha de SilvaNimantha de Silva is a Technical Writer by profession and has four years of experience in the information technology industry.Nimantha has written a series of Technical Articles for several Technical Portals including WSO2 Developer Portal, Associated Content, and Enterprise Resource.

07 June 2010

Also available in Russian Japanese


As the name suggests, cloud computing is an emerging computing technology which uses the internet and central remote servers to maintain data and applications accordingly. With its ability to access personal files from any computer via internet without any installation has made cloud computing a vital factor in today's business activities. This so called technology opened the doors for much more efficient computing by centralizing storage, memory, processing and bandwidth. This new methodology of cloud computing can be broken down into three major segments. Those are namely:

  • Applications
  • Platforms
  • Infrastructure

Each of the above mentioned segments serves a different purpose according to the requirement and offers different products mainly for businesses around the world. It also serves the individuals as well. According to a research study done in June 2009, found that 41% of senior IT professionals in different industries actually does not know what cloud computing is and two-thirds of senior finance professionals again in various industries around the world are confused by the concept. Again in Sept 2009, another research group of study found that disciplined companies achieved on average an 18% reduction in their IT budget and a 16% reduction in data center power costs mainly due to the concept of cloud computing.

The Problem Domain

It is true that to move towards cloud computing is a huge commitment for a business to take. The common question which arises among many IT/Business professionals is that, when your applications and sometimes even your data isn’t stored, managed, and controlled by your own business, isn't it a huge risk that you and your business taking, mainly due to the possibility that the provider of those things could disappear or have some major catastrophe with the data itself. So then the interesting “Why would any business take such a risk?” question arises. Lets figure out the answer for it.

If you consider yourself as a technology savvy or else if you are in the field of IT, then definitely there would seem to be a little benefit moving towards cloud computing model. The lack of understanding is almost the definition of that appeal to the business side, but it is important to foresee your company future in order to succeed. Subscription based cloud computing model becomes a fixed cost to a controllable service of many business oriented strategy models. Main reason behind it is that the capability to bypass their own in house IT shops. These shops are seen as increasingly expensive, risky, and obviously difficult to manage or control. When and argument arises for a reduced budget from the business side, the IT guys always has big, dire, scary and sometimes valid reasons so that nobody can argue with them because nobody really understands the concept behind it. This constitutes a management threat, and that is why the post of a CIO was introduced to the industry. Many less technologically savvy CEO’s are constantly feeling as though they can’t manage their IT departments well. The IT departments of a certain size seem to forget the fact that the only reason they exist is to sell more or make more of whatever the business does. They become driven by their own project goals and not the business goals, which make things more confusing.

Another way of looking towards it is that, cloud computing picks up on the same threads as outsourcing, which was the last biggest revolution which happened in the IT industry sometime back. Many experts believe that if the business can treat IT as a simple cost of doing business, and hand it over to a specialized IT company in order to manage the whole scenario of IT activities, that they can control costs and increase reliability. Now the question arises of has it been a reality as expected. Well, basically the answer is, No. the main reason behind it is, that those firms whom have outsourced IT departments have not ended up saving much money as expected. It is also known that, these outsourced firms suffer the same problems as the internal departments did, but with less pressure since they are under less direct management control. Many companies find themselves faced with the very expensive proposition of restructuring their own IT departments. After doing everything, in some cases, they do not even own the server hardware and other accessories. Yes they are trapped again, but in a different manner or with a different architecture.

Efficiencies of Cloud Computing

After considering the above problem domain, it is clear that most of the businesses lack efficiency in their process or in their business activity model. Cloud computing appears to offer some great efficiency, with some massive resource consolidation in terms of server hardware and a centralized management system for data security, backup methods, and development are few areas that could really benefit any business process. Interoperability, which is a common requirement these days, tends to increase in these environments, and when the applications are built well, users do like them. Ultimately, there is a high probability of all of us working in a heavily cloud computing driven marketplace. It is still young and lacks experience, but in the long run, it will go that way more and more.

Cloud Computing and the Long Run

There have been many predictions about IT but unfortunately you get accounted very rarely for it. Within this article, I will be pointing out some broad predictions made by many IT analysts. Some will come true, some will not; but this is how they see and predict the market will be in 10 years.

Basically, internet is known as a "Cloud". Just as there is no such thing called "The" internet, but rather a lot of interconnected networks owned by a huge variety of people, nations, and companies. It is also obvious that there will be a few very robust and interoperable frameworks. All applications we use in order to read mail, to create documents, and to work with each other will be included within this framework.

If we take a few steps back and consider the beginning, there was computing hardware. It was small, functionality was limited and to make it do anything it had to be hard-wired to do it. Then came the BIOS systems and provided separation from that specific complexity. Later, it was the Disk Operating System which came along and provided a consistent way for programs to interface with hardware through the BIOS. With the usage and demand for different operating systems, made them to introduce the thread security and prevented direct access to the BIOS or Hardware. Although every other OS supported this feature, Microsoft didn’t. In the recent past, the GUI (Graphical User Interfaces) came along as Windows, MAC OS, X-Windows, etc. started to provide a simplified way for users and programs to interact with frameworks like Google Desktop and Adobe Air, which was built on the work of run time frameworks like .NET, Java Eclipse, Notes, and others.

Each new layer of separation seems to increase rapidly to generalization so that the programmers can enjoy when working on to create new tools. Ultimately, with the time being these frameworks will grow robust enough to offer more security, stability, user interface, data storage, and functionality required for truly robust micro-applications to become pervasive. This is where the point when cloud computing will come into play.

Infrastructure of Cloud

Infrastructure is known as the backbone of the entire cloud computing concept. Many infrastructure vendors provide the required physical storage space and processing capabilities that allow for the all the services which was discussed earlier in this article. The products that I have discussed within this article are slightly more varied than those in the other areas of cloud computing, but it includes ones such as managed hosting and development environments in order to allow users to build applications.

Why Shift Towards Cloud Computing?

So lets figure out now who is affected by a paradigm shift in the computing industry? The shift would affect companies with a few different sub-industries including software companies, ISP (Internet Service Providers) and hardware manufacturers. Companies in each of these industries will face some significant changes if cloud computing is to be the next step for the industry, and it seems to be so. While it is relatively easy to see how the main software and internet companies will be affected by such a shift, it will make the process slightly more easier for the hardware and internet industries.


This article explains basics about cloud computing, where it focuses on applications, platforms and infrastructure relevant to business activities. Next it focuses on a typical problem domain which highlights IT Outsourcing and explains the pitfalls of it. Then this article directly points out the efficiencies of cloud computing and how it can help to improve business activities. Then the article ends by focusing on the backbone of cloud computing, which is known as the infrastructure of cloud computing.



Get products and technologies



developerWorks: Sign in

Required fields are indicated with an asterisk (*).

Need an IBM ID?
Forgot your IBM ID?

Forgot your password?
Change your password

By clicking Submit, you agree to the developerWorks terms of use.


The first time you sign into developerWorks, a profile is created for you. Information in your profile (your name, country/region, and company name) is displayed to the public and will accompany any content you post, unless you opt to hide your company name. You may update your IBM account at any time.

All information submitted is secure.

Choose your display name

The first time you sign in to developerWorks, a profile is created for you, so you need to choose a display name. Your display name accompanies the content you post on developerWorks.

Please choose a display name between 3-31 characters. Your display name must be unique in the developerWorks community and should not be your email address for privacy reasons.

Required fields are indicated with an asterisk (*).

(Must be between 3 – 31 characters.)

By clicking Submit, you agree to the developerWorks terms of use.


All information submitted is secure.

Dig deeper into SOA and web services on developerWorks

Zone=SOA and web services, Cloud computing
ArticleTitle=Cloud Computing – A Driving Platform for Business Strategies