Definition: Cloud computing describes the hosting and delivery of information and on-demand computing resources on the Internet using a remote network of servers. The alternative is storing, managing or processing data on a local server or personal computer. Many technology applications that gained popularity as installed software are now preferred as cloud applications to the ease of use and reduced maintenance.

Benefits of Cloud Computing

Cloud computing has opened the world to consumers and online retailers. It offers many benefits over traditional computing; it has helped online businesses increase earning potential as well as offering customers access to thousands of stores. Additional benefits of cloud computing include:

  • Scalability - It can dynamically increase or decrease based on the online retailers requirements.
  • Data Security - Information is stored on a remote server; if a personal computer or internal network fails, no information is lost.
  • Accessibility - Remotely storing a catalog of products or services means that potential customers can access the ecommerce site from virtually anywhere in the world.
  • Pay-Per-Use - Computing resources are measured at a granular level, end users only pay for the resources they require.

Private, Public or Hybrid?

Making the choice of whether to invest time and money into private, public or hybrid cloud computing can be a difficult decision for online merchants simply because of the ambiguity of the three choices. The highlights of these three types of cloud environments are:

  • Private - Cloud services are delivered by a single organization, data center or infrastructure to internal users.
  • Public - Third-party providers deliver services hosted in the cloud over the internet. They are usually sold as pay-per-use services. These services include applications for customer and transaction management.
  • Hybrid - Capitalizes on the advantages of both public and private environments.

Cloud Computing Service Categories

In addition to private, public and hybrid cloud environments that host and store information, clouds are also separated into service categories used for different types of computing. There are three basic service categories:

  • Software as a Service (SaaS): The most popular among online retailers, allows merchants to run direct sales applications such as shopping carts in the cloud without their customers having to download or install programs to make a purchase.
  • Platform as a Service (PaaS): Although not as prevalent in the ecommerce world, PaaS is used for applications and development such as Apprenda, which runs applications like Java.
  • Infrastructure as a Service (IaaS): Primarily focuses on providing datacenter infrastructure on-demand. Examples include Amazon Web Services used by Netflix to house their database of movie and television offerings.

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