Wyoming Business Tips for July 4

June 28, 2010

A weekly look at Wyoming business questions from the Wyoming Small Business Development Center, part of WyomingEntrepreneur.Biz, a collection of business assistance programs at the University of Wyoming.

By Elizabeth Parks, Wyoming Market Research Center researcher

A quick internet search will reveal plenty of blog posts surrounding the topic of "cloud computing." It can be a confusing topic, especially since so many opinions weighing in on the subject can be found.

There are three levels of cloud computing -- an infrastructure level where the hosting takes place; a platform level where new applications are developed; and the top level where applications are stored to be accessed by end-users.

So let us back up a little. Suppose a business owner has a Web site and is hosted on a server somewhere (bottom level) with limited space. The owner is paying a monthly fee for a predetermined amount of hosting space.

As the business grows, the owner now needs more server space, which will cost more money. If the business owns its servers, investing in more storage space and more IT people will be needed. In either case the owner pays for the space whether they are using it or not.

There also is a Plan B -- cloud computing. Cloud computing allows the owner to use as much space as needed on a pay-as-you-go-basis. The owner can put data on a cloud server instead of a dedicated static server. If more space is needed, the owner can scale up almost immediately. If business slows and space is not needed, the business owner can reduce the amount of space that is actually being used.

Again, you only pay for what is used.

How is the "cloud" accessed? Simply by remotely using a computer. It does not have to be physically accessed; but no software/hardware issues have to be dealt with either. As a business owner, do you know where your e-mails are stored or your PayPal account or Netflix movies? Most only care if storage is reliable, stable, easy to use and secure. One additional benefit, no up-front investment in licensing with cloud computing is necessary. The new model is subscription-based or pay-as-you-use.

How does it work?

Companies that provide the bottom level infrastructure use special connections to network large groups of servers together. They act like a "cloud grid" of sorts and consume less energy because of the smaller, more efficient chips being used. It is like going to a huge mall for shopping instead of making several stops all over town to access wanted merchandise.

Companies in the middle platform layer provide sets of services especially for application developers. They also manage the top layer, which is the application layer, weaving all the pieces together.

The top layer is where end users access Web-based software-as-a-service or SaaS. Examples of SaaS are Gmail, Hotmail, Quicken Online, online banking services and thousands of others. Most retail consumers use the thousands of services in this layer.

A blog version of this article and an opportunity to post comments is available at

The WSBDC is a partnership of the U.S. Small Business Administration, the Wyoming Business Council and the University of Wyoming. To ask a question, call 1-800-348-5194, e-mail wsbdc@uwyo.edu or write 1000 E. University Ave., Dept. 3922, Laramie, WY 82071-3922.

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