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Cloud computing is being marketed as something new, but it’s not. A cloud is simply a server – a computer you don’t own or maintain – that sits somewhere other than in your building, that you access to run applications or store data. The loan calculators that are ubiquitous on the web run in a cloud that you access via the internet. Data backup services run in the cloud, as do other web tools such as Dropbox and Google Drive.

In fact, cloud computing, technically speaking, can be considered as any software you access that is functioning outside your desktop computer and outside any server that is physically on your company’s premises or within your company’s security firewall.

If you read an ad that says: “Get more out of your data with business intelligence in the cloud,” it could be a vendor selling a SaaS application, database hosting services, or both.

Companies with limited IT resources should always consider a cloud solution. What is new in cloud applications is an expanded range of products and services – today some companies can run nearly their entire business in a cloud environment.

Instead of investing millions in a traditional on-site suite of integrated applications for sales, accounting, logistics and human resources, companies can securely access these solutions as if they were residing on a server inside their building, but without the cost and maintenance of on-premise applications.

Enterprises using cloud applications also do not need to employ a staff of experts to maintain, troubleshoot and periodically upgrade the server(s) or software – all of that is managed by the cloud application provider.

The cloud is made possible by high-speed internet connections and the huge decrease in the cost of computer processing and memory over the past decade. Stronger security methods have also contributed to the growth of the cloud, although some companies are still hesitant to trust a third party with their sensitive corporate data.

Inexpensive cloud applications are available if you can run your business with standard, non-customized applications. Enterprises can access what is called a multi-tenant version of the software – where several companies use the same software, but whose transactions and data are separated from one another by functioning in a different location or “node” of the software. This scenario is also effectively software-as-a-service (SaaS), because you don’t own the software, the vendor does, and you are simply renting it by paying a periodic access fee or a fee based on number of transactions or users.

Another option is for your enterprise to own its own customized software, but outsource the hosting of it on one or more servers and networks. This model has been around for years – many companies outsource the hosting of their applications to data centers. This is why cloud computing, for all its hype, is nothing new.