Increasingly when we are looking at e-learning purchases we are coming across terms like Application Service Provider, Software as a Service, Grid Computing, Utility Computing, Platform as a Service… Just this past week Microsoft launch a web based version of Microsoft office.  All of these these terms and more, at one time or another have been referred to as “cloud computing.” With all the confusion in the marketplace today, you may well be wondering: what is cloud computing?

Cloud computing is the convergence of three major trends:

1.Virtualization, where applications are separated from infrastructure such as the server and network. Virtualization has become a  growing trend and for good reason. Implementing virtualization allows for more efficient utilization of network server capacity, simpler storage administration, reduced energy costs, and better use of corporate capital. This is often called infrastructure as a service.

2. Utility computing, where server capacity is accessed across a network as a variably priced shared service, depending on your companies size or the features you have turned on in an LMS for example. This is often called platform as a service as it adds software on top of the infrastructure.

3. Software as a service, where applications are available on demand on a subscription basis. The term “Software as a Service” has been in use since 2000 or soon after, describing a model for software deployment where an application is hosted and provided to customers across the Internet. SaaS is now a term in common use in the e-learning industry, with hundreds of software vendors providing SaaS solutions across the complete spectrum of business applications including the LMS, LCMS, TM, Authoring tools.

A pay-as-you-go feature is the hallmark of today’s cloud computing and one of the things that sets it apart from software as a service. Software as  a service is a great model and cloud computing builds on top of it allowing much more customization on a customer by customer basis.

Think of it this way. Imagine buying a bouquet of flowers online. The florists core competency is in choosing and creating those flower arrangements. They should not have to worry about providing a delivery service that has to scale up and down depending on orders and also worry about maintaining a fleet of vehicles.  If the florist can partner with a delivery company that has a range of delivery vehicles then the florist is separated from the delivery process and just pays the delivery company who has a range of vehicles that can cater for any eventuality order size. Each party concentrates on their core competency and costs are reduced for each party.

The company that really put cloud computing the enterprise radar is Salesforce.com, providers of a SaaS‐based Customer Relationship Management (CRM) solution. They have a great video on the topic which I would encourage you to watch below.