We think it’s worthwhile explaining what cloud computing is, how it came about and what all those anonyms actually mean.

Servers were originally single machines running a single instance of the OS, departments tended to maintain their own servers and hence incurred many operational costs. Then came “Virtual Machines” where many Servers could run on a single machine. This significantly reduced operational costs, hardware was being centralised and therefore the processing power of thephysical machine was always being utilised. The number of people required to look after these “Virtual Machines” reduces because there is less physical equipment.

The next logical step was the creation of "Virtual Data Centres" (the cloud). The idea again is to reduce the cost of ownership by automating the operational functions, but also to allow scalibilty. You only pay for what is needed and you are effectively renting the use of the hardware.

• IaaS - Infrastructure as a Service: this is where the supplier allocates virtual machines to run our OS and software on. This is the original Amazon concept and is the simplest cloud environment for a supplier to setup. The benefit for companies is they don’t need to buy the hardware, but they do need to licence the OS, apply the security patches and provide their own disaster recovery plans.
  
  
• PaaS - Platform as a service: this is where the supplier allocates virtual machines with the OS already built in. We just need to install our software, the supplier licences and maintains the OS, security patches and the disaster recovery plans.
  
  
• SaaS - Software as a Service: this is where we typically subscribe to a product such as Office360 or SalesForce.com and pay as you use it. The savings here can be substantial compared to having a dedicated instance of the software. With this scenario you don’t worry about version control or software patches, this is all delegated to the software provider.