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What Is the Cloud?

 Posted on August 3, 2016 by Bill Langston

IBM, Oracle, HP, Google, Microsoft, Amazon, SAP, and virtually every other major technology company want you and your company to use their cloud. Each quarter, these companies release new products and acquire companies to bolster their cloud offerings and grow their cloud revenue. Industry analysts forecast remarkable growth in cloud spending. Yet, global spending on information technology has been nearly flat for several years now and Gartner expects it to remain that way for the rest of this decade. So what is the source of all this cloud growth?

As consumers, we generally think of the cloud as a place where we can backup and save files, access applications and websites to do online banking, pay bills, share photos and music, or communicate with our healthcare providers. But if you’re a publicly traded technology company striving to meet ever higher quarterly revenue targets, the cloud can be much, much more. Here are some ways technology companies increase their cloud revenue:

• If your company is located in a region prone to earthquakes and you move your on-premise hardware to a safer facility maintained by a publicly traded technology company, your service fees are cloud revenue.
• If your company finds it difficult to keep up with important software and security updates and you transfer your software licenses and data to run on a server maintained by that same technology company, you are contributing to their cloud revenue.
• If your business buys additional storage or computing resources to supplement your on-premise data center during peak demand periods, this purchase is cloud revenue. Gartner even counts fees paid for an outsourced IT help desk as cloud revenue.

Whether it’s software as a service (SaaS), platform as a service (PaaS), infrastructure as a service (Iaas), business process as a service (BPaaS), a private cloud, a public cloud, a hybrid cloud, or even remote backup, all these resources are commonly treated as cloud revenue today.

Yes, new technology is creating demand for cloud computing, and companies are using clouds in an effort to gain flexibility and reduce cost. But technology companies, eager to impress investors, will continue to creatively expand the definition of cloud computing to ensure they achieve their targeted rates of growth.

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