About Cloud Computing

The term "cloud" is used as a metaphor for the "Internet", Cloud Computing is Internet-based Computing. It is a technology that uses the internet and central remote servers to maintain data and applications. Cloud computing allows consumers and businesses to use applications without installation and access the system at anywhere with internet access. This technology allows for much more efficient computing by centralizing storage, memory, processing and bandwidth.

Cloud computing is broken down into three segments: "applications," "platforms," and "infrastructure." The application segment is also called Software as a Service (SaaS) — also referred to as On-Demand — is a breakthrough in technology delivery, a growing phenomenon in worldwide business today as companies realize the tremendous benefits of this innovative concept. With Cloud Computing (SaaS), there is no hardware and software involved, all are installed, tested, and maintained by the service provider. Implementations are measured in weeks, not months or even years. By paying a fixed monthly fee, you get access to the applications and services through the internet. No upgrading costs, incredible speed and flexibility, empowered and excited end-users.

Compared with the conventional purchased software, Cloud Computing provides a simpler, faster, and more affordable way for businesses to take advantage of powerful technology tools that streamline and automate operations throughout the enterprise, and provide a superior user experience.

Comparison between Conventional Purchased Software and Cloud Computing (SaaS)

Purchased Software Cloud Computing (SaaS)
Initial investment High — upfront expense in hardware, software, data server and operating system Low — pay-as-you go expense with an initial setup fee
Total cost of ownership High — upfront cost, ongoing costs of upgrading and maintenance, IT resources Low — fixed monthly subscription fee
Time to Deploy Long — time required to install and configure applications Short — no hardware or software installation
Risk High — no control over vendor after purchase, high financial and opportunity risk Low — no long-term binding, better control over relationship with vendor, share risk with vendor
System Security Managed by the customer Managed by the service provider
Continuity of Service Low — limited service, ended after warranty period High — ongoing software maintenance upgrading and support service


Software systems and hardware platforms require continual investment, constant upgrades and non-stop attention. Even then the obsolescence factor cannot be avoided. With the fast pace of technology advancement, you do not get value by owning the technology, you get value by using it. When considering your software purchase versus service subscription decision, the basic recommendations of procurement and finance apply — if something appreciates, buy it. If it depreciates, subscribe for it.