Consider clouds, just for a moment. They are light and intangible. They can come out of nowhere, and can bend and morph their shape in the blink of an eye.

A lot of what makes up the description of a traditional cloud also applies to cloud computing. And that’s largely its appeal.

For the last few years, individuals have completed a lot of their work in a browser window, while accessing and storing their data online. But until fairly recently, cloud computing was not considered a viable large-scale business solution. This is changing, even though challenges still exist.

Who’s clouding their apps?
“As with so many new Internet-borne technologies today, consumers are leading,” said Carmi Levy, senior vice president of strategic consulting with London, Ont.-based AR Communications.

According to Levy, studies show that almost 70 per cent of North Americans already use Web-based services such as e-mail, photo sharing and productivity applications on a regular basis. Big players in the space right now include Google and Amazon. And though consumers are still the biggest group of users, businesses aren’t far behind, he said. Gartner Research projects the continued rise of cloud computing’s influence, stating the term will soon likely become as pervasive as “e-computing” and other former buzzwords.

“These trends inevitably find their way through the back door into enterprises of all sizes in all sectors,” Levy said. “Large enterprises such as the automakers and consumer products firms are all using cloud-based services to support increasingly mobile, disconnected workforces without the attendant increases in IT complexity.”

Levy added that small and mid-sized companies are also realizing the benefits of services-based technologies, using them to deploy capabilities formerly available only to larger organizations. “Now, often all it takes is a phone call or a Web-based sign-up process to open the door to anyone.”

Help in a slow economy
Support of mobile workers and the ability to scale up or down on the fly are only a small part of what makes cloud computing attractive. One of the biggest draws is cost savings, a prospect never more attractive than during an economic recession.

“To me, the cloud is a no-brainer,” said Loren Hicks, a Toronto-based independent management consultant. “The more interesting question is why anyone is defending fat desktops for most workers, outside specialized applications. Those costs are staggering. Organizations will have to move to a cloud because the ROI is too good to miss in a recession.”

Hicks cautioned, however, that the public cloud may not be secure enough for really sensitive corporate data, and that companies need to be strategic in what they decide to push there.

On-the-fly access
Hicks and Levy are both avid users of cloud computing. Hicks travels extensively and uses Google to access e-mail and store spreadsheets for work. Levy said he likes how cloud-based upgrades get managed on the fly “without an IT albatross on my back” and how the services scale to his mobile devices when working on the road.

“When you’re sitting in a client’s office and need answers fast, it’s much easier to tap into your cloud-based data repository from a BlackBerry or an iPhone than it is to fiddle with SSL (security) settings on your home office server,” Levy said. “It’s advanced technology for those of us not interested in becoming engineers.”

James Cullin, the coordinator of the Multimedia Program at Humber College in Toronto, also said he “could not function” digitally without some cloud-based applications like Web mail and spreadsheets.

“I use cloud computing every day,” he said, although Google spreadsheets “can be frustrating to use, because they output to PDF format. Google could solve that tomorrow morning. As it stands now, it’s handy, but it’s no Excel.”

Blue sky with cloud coverage
Speaking of Excel, Microsoft recently announced a new services product called Azure, which the company is calling an “operating system for the cloud.” Though it won’t be widely available for a while, Cullin said he will be happy to try it. “Microsoft finally got religion with software-plus services,” Cullin said. “It doesn’t matter to me which company is behind it, as long as I can log onto any computer, see all my files and do all my work.”

During his keynote at the recent Professional Developer’s Conference in Los Angeles, Ray Ozzie said the Azure platform is positioned as a driver for future cloud technology, from storage to applications. “We need to help developers realize that this cloud design point is something new,” said Ozzie, Microsoft’s chief software architect. “Windows Azure needs to be fundamentally different than the server environment. The systems we’re building right now are setting the stage for the next 50 years of systems.”

Something different may be what this space needs if it’s going to be a viable means of conducting business in any large way, according to Bruce Johnson, a principal consultant with Toronto-based ObjectSharp Consulting. “The Amazons and Googles out there are not offering much more than virtual rack (storage) space, whereas Azure will be more of a development platform. It’s an operating system, in that I write an application for it and deploy it there. And then they execute it.”

The issue of security
So now that major players are involved, the cloud is starting to hold much promise, but it is not without its challenges and risks, Johnson said. “It’s very much a matter of trust. You have to trust who you are giving your information to. I could start a cloud computing company, right? Nobody knows who the hell I am. You don’t know that I won’t go bankrupt in the next year.”

There are also legal issues that won’t be so easy to get around, even if your service provider is a big, reputable company like Amazon or Microsoft, he said. “Do I really have the legal authorization to store confidential information in one of those servers? It could be anyplace. I don’t know if it’s being pushed across borders, because I am moving it to the cloud. I have no idea where it happens to go from there.”

So, who do you trust?
In fact, Levy said, many companies still believe that managing their infrastructure in-house is the only way to ensure full security. “It’s like asking the kid down the street to watch your bike while you go inside to buy a soda. Do you trust him? Would your bike be more secure if you didn’t rely on someone else to keep it secure?”

Johnson said not having a physical copy of your processes on-site can also make for some interesting legal questions. “If I am going to push my data into the cloud, how are my auditors going to feel about that?”

Hicks agreed security may be the biggest impediment to public cloud computing. Though an avid user of the cloud himself, he said he always proceeds with caution. “No Internet café or library PC can be assumed free of spyware. I never type passwords to my primary e-mail or use eBay or PayPal from unsecured end-points. And I don’t store sensitive data at Google either.”

That means companies, too, must be careful how they access and store their data in the public cloud, and should probably not put private information there, he warned. “I cannot completely trust the cloud. I have worked in IT too long. In fact, I would be surprised if any organization of size put sensitive data into such a service.”

Because of this, he predicted, the public cloud will continue to grow but will remain insecure to some degree. What we will start to see more of, he said, are “private clouds,” which refer to smaller online IT systems offering cloud-like services on a closed internal—and firewall-protected—network.

A recent report by Gartner Group supports that theory. Gartner predicts that, by 2012, at least 14 per cent of the infrastructure and operations of Fortune 1000 companies will be managed and delivered in a cloud-like environment. They expect that more and more corporate data centres will operate as private clouds, which they describe as “flexible computing networks modeled after public providers such as Google and Amazon.”

And of course, a fun added bonus to having a private cloud is the ability to paraphrase the old song by the Rolling Stones, and tell someone: “Get off of my cloud,” whenever necessary.

According to Wikipedia, the term refers to Internet-based development and use of computer technology, where real-time scalable resources are provided as a service and accessed through a browser. But, as one analyst points out, this movement is still poorly understood.

“Vendors would have you believe [cloud computing] is a philosophy that requires that you sign over your organizational culture and budget to them so that they can revolutionize the way you work,” said Carmi Levy, senior vice-president of Strategic Consulting with AR Communications. “But cloud computing is really little more than a return to the simpler days of centralized computing resources. Cloud computing is the deployment of software and services via the Web that allows end users to spend more time using it, and less time paying for and maintaining it.”

One reason cloud computing may be difficult for some to define is because it is easily confused with other types of technology service models, such as grid computing, software-as-a-service (SaaS) and outsourcing. It’s easy to confuse because, on many levels, these are actually the same things, according to Bruce Johnson, a principal consultant with Toronto-based ObjectSharp Consulting.

“Cloud computing—at a conceptual level—is the idea that rather than having an infrastructure inside of your walls, you put it onto the Internet and let somebody else run it. At that level, it’s the outsourcing of a functionality.

“There’s a machine out there that’s running your application. There’s a hard drive out there that has your data on it. You don’t know where it is. You just know that if you need to get it—and you have access to the Internet—you can get it.”

Levy added that, in some instances, the term is still used as more of a marketing concept instead of actually describing a new way to use technology. “Cloud computing can be yet another label for the same kind of thing that’s been hyped —often overhyped—for the better part of the last 15 years. The tech industry always needs to find ways to rename the same old things, and cloud computing has not been immune to this.”

1 Lower upfront costs:
businesses can pay a cloud-based provider “by-the-drink” rather than investing in hardware, software and human resources

2 Faster time to market:
the ability to deploy and scale an app quickly, without changing code

3 Reduced financial risk:
smaller costs are paid out monthly and adjusted according to need and market conditions, rather than paid out all at once

4 Lower capital expenditures:
use of commodity hardware allows for a utility pricing model

5 Reduced operating expenses:
administrators are freed from tedious server management, so operations are streamlined

6 Decreased downtime:
the ability to add capabilities on the fly without investing in new hardware means you can scale quickly with little or no decrease in service

7 Added services that most SMEs could not afford:
including increased security, redundancy, bandwidth and dedicated expert staff

They say the best things in life are free, but they also say you get what you pay for. So, when it comes to selecting software for your business, which old saying do you go with? Is free software good enough for your company?

Well, yes and no. First, realize that free is just a word. There’s free as in zero cost and free as in it’s-so-ridiculously-cheap-it-might-as-well-be-free. Then there is seemingly free, such as Linux. The operating system is a great free alternative, but it’s not suitable for the technically faint of heart, unless you buy one of the supported versions from vendors such as Red Hat or Novell. And that means it’s no longer free.

Truly free software is usually pretty basic: it will get the job done, but there is often a premium package with more features. Even so, buying a premium package can feel virtually free when compared to the $800 you’d spend for one full copy of Microsoft Office 2007.

Cloud productivity
Truly free productivity options start with Google Apps, which offers e-mail and basic word processing, spreadsheet and presentation functionality. The premium versions are US$50 per year per user, while e-mail and Web security packages run between US$12 and US$24.

Does Google work? “We’ve saved up to $70,000,” said Grant Shellborn, CTO and co-founder of financial services software maker VendTek Systems, based in Vancouver. The company has 40 employees in Beijing, Abu Dhabi and Toronto, and it depends on the free Google suite for e-mail, schedules, documents, sharing voice messages and synching smartphones.

“What I like is that when someone updates a spreadsheet everyone gets notified of the change. We’ll probably go to the premium version in the next couple of years.”

Another option, for a little more money, is Open Office, a full suite of programs that mimic Word, Excel and PowerPoint. Open Office also offers a database, a drawing program and a math formula program. The basic suite is free but a year of access and support is US$2.50 per month, with an upsell to a PDF manager which lets you open, create and edit PDFs for US$15. Files are compatible with Microsoft Office.

Even Microsoft is climbing on-board with free business software: Office Live Small Businesses and Office Live Workspaces for Small Business are easy step-by-step programs to get your business online.

Again, the basics are free but as you add on modules such as e-commerce, e-mail marketing and project management and scheduling, there’s a charge, though it’s still pretty cheap: US$14.95 for domain registration after the first year and US$14.95 per month for five to 10 users (the first five are free) up to US$84.95 per month for 75 users.

Talk, market, measure
If you want to talk on the cheap, both Google and Skype offer free chat, voice and video between users. Skype will also let you call regular phone numbers for as little as two cents per minute.

Also worth checking out is MailChimp, an e-mail marketing program that tracks who got a message, who opened it and who responded for up to 100 subscribers and six mail-outs per month; cough up $10 a month and you’re up to 500 subscribers and it rises incrementally to $240 per month for up to 50,000 subscribers. 

Google Analytics is another useful and free marketing tool to uncloak which keywords hooked your best prospects, and which copy, headlines and pictures pulled the most responses. Better yet, it’s designed for novice users and works on e-mail and Web campaigns.