Recognized by Gartner as one of the top 10 strategic technologies of 2010, cloud computing is being embraced by organizations of all sizes and across all industries. For all the interest -- and investments made -- in cloud computing, vendors and consumers can't pin down a single definition of this rapidly evolving space. In general, everyone agrees that cloud computing delivers scalable and elastic IT resources as a service via Internet technologies; also, cloud computing should make IT provisioning faster, more efficient, and more cost effective with on-demand resources, pay-as-you-go or subscription pricing, and scalability beyond what most enterprise networks are capable of internally.

Analysis

The industry also agrees that there are three different classes of cloud computing: public clouds, private clouds, and hybrid clouds. They all share the same basic features -- the differences are in who is allowed access to the different clouds.

Public Clouds

Public cloud computing is the most widely adopted class as well as the most thoroughly understood -- it's often considered the standard model of cloud computing. In a public cloud, a service provider makes IT resources, such as collaboration, CRM or payroll applications, storage capacity, or server compute cycles, available to any customer via the Internet.

A few public cloud offerings have already become such an ingrained part of the business community, such as Cisco's WebEx meeting space and Salesforce.com's Sales Cloud, many of their users aren't even aware that they're accessing applications in a cloud environment.

Cisco and Salesforce.com aren't the only major vendors to jump in with a public cloud offering -- WebEx is joined by Amazon Elastic Compute Cloud (EC2), Google Apps, and Microsoft Azure.

The benefits of cloud computing are compelling. In a public cloud, IT services are easy to set up via browser-based UIs, inexpensive with zero hardware and software costs, and can scale up or down depending on how much capacity you need at that moment. However, for many enterprise organizations, these benefits come with certain risks: no control over the resources in the cloud, the security of confidential data, network performance issues, and interoperability.

Private Clouds

Private clouds mitigate these concerns, with the security of an internal network. Because the customer owns all of the equipment powering the cloud environment (often a very large data center), the customer has complete control over the IT resources as well as the data and is responsible for securing it. In a private cloud, enterprise IT resources are consolidated and pooled so users across the company can have self-service access and increased scalability. Also like a public cloud, a private cloud also makes provisioning an automated service request rather than a manual task processed by IT.

Unlike a public cloud, setting up shop in a private cloud requires expertise with network integration as well as with sophisticated virtualization and cloud platform technologies; you'll have to run your own hardware, storage, networking, hypervisor, and cloud software. Many names familiar to the enterprise now offer cloud platforms for build a private cloud, including Cisco and EMC, IBM, Microsoft, Oracle, and VMware, as well as services to help manage it. It's a market crowded also with smaller names, such as Cloud.com, Platform Computing, and Enomaly.

Public clouds may be the standard, but private clouds are taking hold in enterprises with surprising speed. In May 2010, research firm IDC reported that private cloud spending will soon dominate the sales of servers, with $12.4 billion in sales going towards creating cloud computing environments by 2014. The same report states that $718 million in server sales will be used for public clouds by the same year.

Hybrid

Hybrid clouds use a combination of internal resources, which stay under the control of the customer, and external resources delivered by a cloud service provider. Like the private model, a hybrid cloud lets an organization continue to use their existing data center equipment and keep sensitive data secured on the organization's own network. And like the public cloud, a hybrid model lets an organization take advantage of a cloud's almost unlimited scalability. It's a way to solve some of the trust issues of the public cloud while getting the public cloud's benefits.

Amazon's Virtual Private Cloud (VPC) is one of the leading examples of a hybrid cloud. Still in beta, VPC lets an organization securely connect its existing data center infrastructure to an isolated set of compute resources within the Amazon Web Services (AWS). With VPC, a company can also extend its security measures, such as firewalls and intrusion detection systems, to its AWS resources in the cloud.

Conclusion

Whether private, public, or hybrid, every model of cloud computing allows organizations to use -- and pay for -- only the IT services, including application hosting, SaaS, infrastructure as a service (IaaS), and platform as a service (PaaS), employees actually need. Companies are increasingly turning to cloud computing as a way to cut costs as well as to modernize the way they deliver IT resources to users.

In late 2009, Aberdeen Research recognized this approach to the cloud in its Business Adoption of Cloud Computing report. The IT research firm said, "For businesses of all sizes, cloud computing can deliver operational efficiencies while establishing the building blocks for the next major wave of IT innovation and business architectures."