All of the technology and business contacts I regularly talk to keep mentioning cloud computing. But what is it, what does it really mean for business and what are the monetary and tangible upsides?

Cloud means Internet. The computing is done on the Internet – instead of the software you use running on your computer, it’s hosted on the Internet on a server installed in a data centre usually staffed by people who are adept in managing technology. This type of “cloud” software is sometimes called “on demand” or Software as a Service (SaaS).

Some well known examples of well established Software as a Service are:

Web based CRM Software (Customer Relationship Management) – Salesforce.com pricing about $9 per user/month.
Small business management and accounting software (small business ERP) – Salesorder.com pricing $45 per user/month.
Medium sized business ERP software – NetSuite pricing around $99 per user/month.

There are 3 significant benefits for every business here:

Time, cost savings and reliability

Businesses don’t require a dedicated systems expert to help them select, commission and support the technology platform thus cutting operating expenses and time to get operational. The task of regularly backing up data is removed as this is almost always an inherent feature of the “cloud” software. Cloud software “operators” normally have redundant systems that can be turned on in seconds should a significant problem occur.

Easier selection and wider choice

With just a web browser, businesses now have immediate access to a big selection of software packages they can in most cases immediately try and swiftly work out if the software fits their needs at zero expense. This makes it very easy for innovators in large enterprises to circumvent the restrictive information technology procurement processes and easily assess and prove their business case.

Superior user experience

The cloud provides immediate feedback to application makers and has led to substantial progress in user interface design resulting in more intuitive systems thus improving learning times and increasing user satisfaction. This of course means quicker adoption and better productivity.