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The term cloud computing can be read very often in the news and hence can increasingly be found on various agendas of decision makers. Cloud computing promises a lot of advantages such as high scalability and cost reductions due to a “pay as you go” business model. In general, cloud computing allows the provision of IT resources such as computing power or data storage just on demand. Only those resources which effectively are used will be charged.
There does not exist an “official” definition of the term “cloud computing”. However, the definition of the National Institute of Standards and Technology (NIST) has been emerged being the de-facto standard:
Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. (Mell & Grance, 2010)
This definition mainly reflects the main features of cloud computing. Besides scalability and the flexible business model, Mell and Grance (2010) specify the following features as essential characteristics of cloud computing:
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On-demand Self Service
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Broad Network Access
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Resource Pooling
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Measured Services
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Rapid Elasticity
Basically, those five characteristics summarize the main capabilities of cloud computing. IT resources such as computational power or data capacity can be provided to costumers automatically and on-demand without any additional human interaction. Those services are provided over a network irrespective of the client used for consumption (e.g. personal computer, mobile phone, etc.). Furthermore, the resources are provided dynamically, highly elastic, and they can be consumed location independent. The consumed resources are measured by the provider and charged to the customer guaranteeing an appropriate level of transparency.
The cost savings potential of cloud computing is enormous. For instance, the analysis of Alford (2009) implies that over a 13-years lifecycle the implementation costs for cloud computing would be more than 60% lower than setting up a traditional data center. Weimann (2011) even mathematically proofs the inevitability of cloud computing for enterprises and organizations in the future. Additionally, the market potential of cloud computing is enormous. For 2010 the market volume was calculated to be 71 billion US Dollars. Furthermore, analysts predict a yearly growth rate of 26% for the upcoming years (Deloitte, 2009).