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There's a lot of buzz today about "the Cloud". At Kern, we like the term because it’s a simple reference to that big network in the sky without dishing out arcane acronyms describing services delivered over the internet. We think of looking at all of those systems diagrams that show their connections to a wide area network or the internet drawn as a cloud and suppose that is the origin of the term. Since many in our industry are using the term "SaaS", or Software as a Service, we’ll refer to that as well. A SaaS or Cloud service has several characteristics that make it different than hosted applications.

Hosted applications require that the user buys the computing platform, the operating system for that platform, and the needed systems tools and application software to complete the solution. All of these components need to be purchased or leased with implications to capital expenditure planning. The user’s IT organization needs to be ready to support the installation and maintenance of the hosted application and the platform selection needs to conform to their standards for consistency and supportability.

Cloud services, on the other hand are as described; services. As technology has enabled faster, better and cheaper internet connections, compute platforms, storage and security, these functions can be centralized to a specialist. All of the components we mentioned before can be optimized and access to the application can be essentially rented as a service. Of course, rental means that the costs are now operating expenses.

Cloud services can be public or private, meaning that the user can select the option of having their application share the use of a server or have their own dedicated private server. The preference is really up to the user as even public cloud services can be configured to load balance across multiple servers to maintain performance and the access to the data is secured to ensure that only those with permission rights to access the application.