In the world of information technology, it seems that every few years a new concept comes along that emerges as being the next great leap in technology. One of the current concepts that fits that description in the IT world is called cloud computing. However, before a company decides that it will embrace cloud computing, it needs to make sure that it understands all the implications of this new offering. As with most technologies, there are many benefits that can be gained, but along with understanding the benefits, the business risks must also be evaluated. When making this evaluation, it is important to keep in mind not only the short term needs, but the long term objectives and goals of the organization. In recent years, the Obama administration has pushed for all federal agencies to investigate cloud computing to see if it will benefit each agency. "The Federal CIO Council under the guidance of the Office of Management and Budget (OMB) and the Federal Chief Information Officer (CIO), Vivek Kundra, established the Cloud Computing Initiative to fulfill the President's objectives for cloud computing."5 With the recent push from the current administration, cloud computing is expected to grow by leaps and bounds over the next few years. In some studies, there are predictions that "cloud services will reach $44.2 billion in 2013, up from $17.4 billion of today, according to research firm IDC."4 This paper will lay out the considerations that an organization should consider at before making a decision to use or dismiss cloud computing at the present time. Overview of Cloud Computing:
"Cloud Computing is a model for enabling convenient, on-demand network-based access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interactions."2 This definition is one of many that have been introduced within the IT industry, but what does this actually mean? The concept of a cloud can be looked at as a "leasing-versus-owning concept - an operational expense versus a capital one."4
To understand the cloud computing concept more clearly, let us compare it to a more common concept: paying for electric utility. Each month, a household or business utilizes a certain amount of electricity which is monitored by a company and the consumer is billed based on their usage. If each household had their own power source, that would be congruent with non-cloud computing; there is no central power source that households take advantage of. If, as is the standard case, households buy their power from a consolidated power source (e.g. a power plant), that would be like taking advantage of a cloud; many users sharing a resource to fulfill their independent needs. Using this simple example, the cloud would be similar to the power plant, providing either infrastructure or software to customers on pay-per-use basis.