There are three levels of cloud computing. The bottom base is the infrastructure level where the hosting takes place. The next level is the platform level where developers develop new applications. The top level is where the applications are stored to be accessed by end-users. Now let’s back up.
Suppose you have a website. It is hosted on a server somewhere (bottom level) where you have limited space. You are paying a monthly fee for a predetermined amount of hosting space. As your business grows, you need more server space, which will cost you more money. If you own your own servers, you will find yourself investing in additional servers and more IT people. In either case, you pay for the space whether you are using it or not. But now there is a Plan B. There is cloud computing. Cloud computing allows you to use as much space as you want on a pay-as-you-go-basis. You put your data on a cloud server instead of a dedicated static server. If you need more space, you can scale up almost immediately. If business slows and you don’t need the space, you can reduce the amount of space you are actually using. You only pay for what you use. How do you access the cloud? You access it remotely using your computer. You won’t have physical access to it; but you won’t have to deal with software/hardware issues either. Do you know where your emails are stored or your PayPal account or Netflix movies? All you care is that storage is reliable, stable, easy to use and secure. One additional benefit, there is no upfront investment in licensing with cloud computing. The new model is subscription-based or pay-as-you-use.
How does it work?
Companies that provide the bottom level infrastructure use special connections to network large groups of servers together. They act like a “cloud grid” of sorts and consume less energy because of the smaller, more efficient chips they use. It’s like going to a huge mall to do your shopping instead of making several stops all over town to access the merchandise that you want.
Companies in the middle platform layer provide sets of services especially for web application developers. They also manage the top layer (the application layer) weaving all the pieces together for access by end-users.
This top application layer is where end-users access web-based services, also known as software-as-a-service or SaaS. Examples of SaaS are Gmail, Hotmail, Quicken Online, online banking services and thousands of others. This layer is used by retail consumers to access the multitude of services available on the internet. Everything is accessed via the internet cloud.
So that is it in a nutshell.
Elizabeth Parks, Wyoming Entrepreneur Market Research Center