This seems like an odd question to ask since you probably already have some concept of “the cloud.” However, given some of the conversations I have been having recently, I think there’s a good deal of cloudy thinking about cloud computing.

So here is the gist of what the cloud is (imho) summed up for you in a set of bullet points:

1. “Cloud Computing” is currently a marketing term. And that’s why I’m writing this; to divorce the use of Cloud Computing, the marketing term, from the use of Cloud Computing as an architectural idea. Marketing terms don’t have to conform to precise definition. They get used, then abused, then severely exploited and finally, as their bandwagon grinds to a halt, they get pitched onto the sorry stack of broken buzz words. That’s what happened to “eBusiness”, “Web Services”, “On Demand” and so on. Until the recession began in earnest Cloud Computing was a reasonably sane marketing term. That’s now changing because, in the minds of the IT audience, the cost of cloud computing is lower. That makes cloud the hype-word du jour.
2. Cloud Computing is NOT SaaS (Software As A Service). I’m making this point because some commentators have been equating these two ideas as if they were identical. SaaS is healthy terminology. SaaS is out-hosted software that you can access directly. Although you might not think of it as such, your electronic banking capability is SaaS – you just don’t pay for it directly. As such electronic banking is no different to Zoho or Google Apps. However, electronic banking is definitely not Cloud Computing, no matter how much you stretch the definition.
3. Cloud Computing Is Not About Emulating Google It looks suspiciously like the initial enthusiasm for cloud computing as a technology strategy was prompted by Google envy. Google was doing something unprecedented in building huge data centers to support its business. It was clearly a fact that Google’s operation was highly efficient and some CIOs mused about whether they could emulate Google. Actually there was no chance, because Google’s business was defined by just two uncommon transactions: searching the web and placing adverts. Google designed a huge massively parallel operation using computer servers and switches they built themselves within an architecture that was optimized for precisely that workload. You can’t emulate that unless, like some social networking sites, you have a small variety but very large numbers of transactions. As you might expect, some social networking sites have emulated Google.
4. Cloud Computing Is About Technology Stacks Cloud computing is about technology stacks in the same way that the ISP business is about technology stacks. In general ISP deliver a consistent service to the myriads of web sites they host by employing a standard technology stack, most commonly, the LAMP (Linux Apache, MySQL, PHP) stack. This means that management effort is minimal because everyone is running the same application (a web site) with the same technolgy (LAMP) and, where customers do have problems, they will normally be the same issues cropping up time and again.
5. Cloud Computing Is About Economies of Scale The only thing that everyone seems to agree upon about Cloud Computing is that it is constructed for scale and that it is hosted on a set of resources that are distinct from the typical IT network. In other words within “the cloud” there is an architectural attempt to build for scale. Most cloud offerings are going to be based upon scalability. The truth is that if you plan to have a very large data center and you organize its use so that most of the workloads are very similar, or better, identical, then you will achieve significant economies of scale. You will then be able to offer the service at prices that undercut the customer’s costs of running the application in-house. The more customers you achieve the better the cost advantage.
   
6. Cloud Computing Is Not Outsourcing The typical corporate data center is not a cloud and will never become one. Its workloads are mixed the platforms they run on are mixed – the whole technology stack is mixed. That means you cannot transform the whole data center into a cloud operation. However, you can outsource it.
   

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