Lower costs, easier upgrades and anywhere access through off-sit e IT

As the Marketing Manager of Business Development for Four Seasons Hotels and Resorts, Stacy Stone has seen the future of IT, and it’s not in a mainframe in the basement or in a datacenter across town. It’s in cloud computing, the gamechanging technology that’s turning IT upside down.

“With our old in-house system, it sometimes took 24 hours to run CRM [customer relationship management] reports,” she says. “We had no remote access, and if we wanted to make changes, it could take days or weeks to get it done.”

Fast-forward to last summer when the company switched over to a webbased CRM program that allowed sales staff around the world to see reports from anywhere at any time. “The data is all right there,” says Stone, “and if we want to create a new report, we can build it in five minutes or less.”

Such results come as no surprise to Bruce Francis. As the vice president of corporate strategy for Salesforce.com— the company that developed Four Seasons’ CRM program—he already knew that such speed and flexibility is what cloud computing is all about.

So, what exactly is cloud computing? Among IT professionals, the term is open to interpretation (and endless debate), but according to the National Institute of Standards and Technology (NIST), cloud computing “provides scalable IT capabilities that are offered as a service over the Internet to multiple users.” Furthermore, says NIST, “the cloud” is defined by five essential characteristics: on-demand self-service, broad network access, resource pooling, rapid elasticity (or scalability) and measured service.

In other words, instead of investing massive amounts of money, space and manpower in on-site IT infrastructure and personnel, companies can utilize the computational resources of independent providers. “We do the heavy lifting of IT infrastructure,” says Adam Selipsky, vice president of Amazon Web Services (AWS), an arm of Amazon.com and a leading provider of cloud services. “You don’t need to worry about purchasing it, managing it or even knowing where it physically is.” Equally important, users pay only for the resources they use, which can be scaled up or down as business needs warrant.

At Amazon, the cloud began to coalesce 10 years ago when it developed distributed-computing systems to manage its own exponential growth and its growing ranks of thirdparty sellers. “We’d built this very large application that gets very busy, particularly every November and December,” says Selipsky, “and we realized that there were tons of other companies out there who had all the same pain around their infrastructure costs.”

Today, Amazon—along with other cloud providers, including Google, HP, IBM and Salesforce— provide software, storage and other services to hundreds of thousands of companies. Large or small, Internet startup or global enterprise, the common denominator is that cloud computing lets companies focus on their core competencies and business goals rather than the infrastructure they need to reach them.

So, perhaps it’s not surprising that cloud computing is one of the fastestgrowing sectors in IT. According to industry analysts at IDC, worldwide spending on cloud services is expected to grow from $17.4 billion in 2009 to $44.2 billion in 2013. And while traditional on-premise IT still dominates the market, cloud computing is growing five times as fast.

Of course, the cloud is not the answer for every company. Maintaining confidential corporate or customer information outside the company can raise issues of security, performance and availability. Most cloud providers have suffered significant outages, and it remains to be seen who bears responsibility should sensitive data be lost or compromised.

Ultimately, though, the forecast is for an increasing prevalence of cloud computing. As individuals, we’ve all gotten used to Internet-based applications; as business travelers, we’ve come to demand access to our data wherever we are. And for companies, it represents a logical progression to a more efficient way of doing business.

In fact, according to Selipsky, we’ve been here before: “If you go back 120 years, every manufacturing facility had its own electricity generator—it was a fact of doing business. But when the electricity grid came on line, it didn’t take many years before producing your own power was seen as an anachronism. We may be in the early stages of that kind of fundamental transformation.”