by Peter Hann

Created on: September 28, 2010

Cloud computing is now an established term in the business vocabulary. Vendors of cloud computing services make available platform, infrastructure and software applications to customers on a subscription (pay as you go) basis. The customer does not have to be concerned about functions such as systems maintenance which are performed by the vendor in the clouds and covered by the customer’s subscription.

Some consider cloud computing to be of benefit mainly to small companies. They can use Software as a Service (SaaS) off the cloud and can spare the expense of acquiring their own hardware or developing software systems in-house. They can also avoid the problems of spare capacity, where their in-house hardware is not fully utilised all the time. They are also free of problems caused by peaks in demand where their own systems would otherwise be overloaded. Spare capacity can be used on the service provider’s server “in the cloud” while the load is high, and this capacity only needs to be used and paid for at times of peak loads.

The rest of the time, when some of the capacity on the cloud is not needed, the cost of the vendor’s services is reduced, because payment will be on a pay-as-you-go basis related to the capacity used. Small companies can therefore use cloud computing to increase the efficiency and cost effectiveness of their business. 

However cloud computing also buys advantages for larger companies. They can use a cloud computing service such as storage capacity “in the clouds” to cater for peak loads on their system. As with a smaller company, this will mean that they do not need to invest so much in hardware, they can operate at near to full capacity with their own streamlined systems knowing that they can make use of extra capacity in the cloud when needed. This ensures that they have the flexibility to deal with fluctuating levels of operation in an efficient and cost effective way.

Developing the intercloud 

This advantage of flexibility and cost effectiveness could increase dramatically with the development of the intercloud. One of the first to introduce the concept of the intercloud was Cisco Systems who saw it as a natural development in cloud computing, analogous to the way that networks developed into the internet by “learning to talk” and having conversations with each other. The intercloud will later enable the different clouds owned by different service vendors such as IBM and

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