{"id":173,"date":"2018-06-14T19:04:46","date_gmt":"2018-06-14T19:04:46","guid":{"rendered":"https:\/\/pressbooks.ccconline.org\/bus3060\/chapter\/ch10-6\/"},"modified":"2026-02-03T15:49:35","modified_gmt":"2026-02-03T15:49:35","slug":"ch10-6","status":"publish","type":"chapter","link":"https:\/\/pressbooks.ccconline.org\/bus3060\/chapter\/ch10-6\/","title":{"raw":"10.6 Cloud Computing: Hype or Hope?","rendered":"10.6 Cloud Computing: Hype or Hope?"},"content":{"raw":"
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Learning Objectives<\/span><\/p>\r\n\r\n<\/header>\r\n

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After studying this section you should be able to do the following:<\/p>\r\n\r\n

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  1. Understand the concept of cloud computing.<\/li>\r\n \t
  2. Identify the two major categories of cloud computing.<\/li>\r\n<\/ol>\r\n<\/div>\r\n<\/div>\r\n \r\n\r\n<\/div>\r\n

    Oracle Chairman Larry Ellison, lamenting the buzzword-chasing character of the tech sector, once complained that the computer industry is more fashion-focused than even the women\u2019s clothing business (Farber, 2008). Ellison has a point: when a technology term becomes fashionable, the industry hype machine shifts into overdrive. The technology attracts press attention, customer interest, and vendor marketing teams scramble to label their products and services as part of that innovation. Recently, few tech trends have been more fashionable than cloud computing<\/em>.<\/p>\r\n

    Like Web 2.0, trying to nail down an exact definition for cloud computing is tough. In fact, it\u2019s been quite a spectacle watching industry execs struggle to clarify the concept. HP\u2019s Chief Strategy Office \u201cpolitely refused\u201d when asked by BusinessWeek<\/em> to define the term cloud computing (Hamm, 2008). Richard Stallman, founder of the Free Software Foundation said about cloud computing, \u201cIt\u2019s worse than stupidity. It\u2019s a marketing hype campaign\u201d (McKay, 2009). And Larry Ellison, always ready with a sound bite, offered up this priceless quip, \u201cMaybe I\u2019m an idiot, but I have no idea what anyone is talking about. What is it? It\u2019s complete gibberish. It\u2019s insane\u201d (Lyons, 2008). Insane, maybe, but also big bucks. By year-end 2008, the various businesses that fall under the rubric of cloud computing had already accounted for an estimated thirty-six-billion-dollar market. That represents a whopping 13 percent of global software sales (Liedtke, 2008)!<\/p>\r\n

    When folks talk about cloud computing they\u2019re really talking about replacing computing resources\u2014either an organization\u2019s or an individual\u2019s hardware or software\u2014with services<\/em> provided over the Internet. The name actually comes from the popular industry convention of drawing the Internet or other computer network as a big cloud.<\/p>\r\n

    Cloud computing encompasses a bunch of different efforts. We\u2019ll concentrate on describing, providing examples, and analyzing the managerial implications of two separate categories of cloud computing: (1) software as a service<\/em> (SaaS<\/em>), where a firm subscribes to a third-party software-replacing service that is delivered online, and (2) models often referred to as utility computing<\/a><\/span>, platform as a service, or infrastructure as a service<\/em>. Using these latter techniques, an organization develops its own systems, but runs them over the Internet on someone else\u2019s hardware. A later section on virtualization will discuss how some organizations are developing their own private clouds<\/a><\/span>, pools of computing resources that reside inside an organization and that can be served up for specific tasks as need arrives.<\/p>\r\n

    The benefits and risks of SaaS and the utility computing-style efforts are very similar, but understanding the nuances of each effort can help you figure out if and when the cloud makes sense for your organization. The evolution of cloud computing also has huge implications across the industry: from the financial future of hardware and software firms, to cost structure and innovativeness of adopting organizations, to the skill sets likely to be most valued by employers.<\/p>\r\n\r\n

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    Key Takeaways<\/span><\/p>\r\n\r\n<\/header>\r\n

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