: By Mike Phillips :

Cloud computing might be one of the more poorly-defined technologies of recent years. But one way to describe it is by looking at the battle shaping up between Microsoft and Google.

Microsoft Office provides email, word processing and spreadsheets to help businesses communicate. A user can write a document then save it on a hard drive. The file can then be attached to an email and sent to colleagues who all separately view the document, make notes and revisions, save it on their hard drive then attach it to another email for another round of views. Sound cumbersome?

Google Apps also has a complete set of business communication utilities, also including email, word processing and spreadsheets. But with Google’s software as a service (SaaS) applications a user can write a document then invite others to view and edit the document, in real-time, all within a browser and accessible from anywhere on the Web, at any time. The key differences are immediate collaboration, and no need for storage.

Working in the cloud lets users access any number of utilities and applications, collaborate instantly, store files and manage infrastructure, without a single server on site. But cloud computing does so much more.

Resources and Cost Savings Perhaps the most immediate benefit of computing in the cloud is the cost savings for businesses. By using services in the cloud, many costly overhead items can be bypassed, such as servers, storage and expensive software.

There are many complete solutions for small and medium businesses that will enable a fully functional website without ever needing a server, Web host, design team or self-hosted, costly software. Sitemasher is one of them, offering hosting, design, SEO tools, CMS, analytics and more for one monthly fee. “Hosted CMS are very expensive,” says Nicole Denil, VP of Marketing for Sitemasher. “Through research, what we found was that companies were looking at cost of implementation, but not every day costs, like hosting and management.”

But working in the cloud does more than save startup costs. Beyond the need to purchase software, servers or storage space, traditional website management involves allocating large chunks of resources in order to keep everything operating at the most basic level. But by easing the burden on infrastructure through cloud computing, businesses can get back to what’s really important. “Cloud computing is changing the way that companies operate,” says Denil. “It shifts the way people think about their infrastructure and whether or not they should be spending their resources on it. You can shift resources to the actual business itself.”

So, instead of taking time to run a weekly test on a server, or ferret out a disruption in service, your IT professional can spend their time and resources developing a new functionality for your website that will enhance your overall Web presence. Instead of sorting and importing data between databases, a cloud-based analytics solution can deliver fast results — your analyst can dig deeper and faster to find the next target.

Security, Reliability and Scalability

A chief concern for many considering moving into the cloud is security. It can be frightening to hand over control of your data and overall website management to a virtual server, something not within your immediate reach. For online businesses, there’s nothing more valuable than their data and records. “There is a great deal of trust that goes into the safe keeping of these records,” says Steve Longbons, Director of Internet Technology at GTO. “And in the age of hackers and malware, aside from simply nosey employees, privacy in the cloud is a legitimate concern.”

As such, a careful screening process should precede selecting any cloud-based provider. In addition to 24/7 support, issues to address include how the application is secured through anti-virus and malware precautions, patches, encryption, data backup and redundancy, and that data centers are securely guarded and managed. Customers should not only ensure they own their data, but that they can take it with them, should they decide to export the HTML and bring it to another host.

However, many experts believe the cloud to be more secure than many in house operations. “Most security breaches are internal,” says Denil. This might include a lost laptop, smartphone or hijacked email, for example. In the cloud, there’s no hardware to lose. And the ability to collaborate over a document through a secure Web browser connection means there’s no document to attach and send with email. Sensitive data is controlled by the organization to minimize risk of a human mistake.

One of the worst nightmares of a Web professional is a down website due to a welcome, but unexpected overload of traffic. “If my website goes down, I’m out of business,” says Bert Armijo, Senior VP of Sales, Marketing and Product Management for 3Tera (3Tera.com). “And that happens when you’re getting the most customers, because of the load.” Unfortunately, a down website means not only a major loss in sales or branding opportunities, but also an extensive disaster recovery effort.

“Traditional disaster recovery meant managed services, and replicating your infrastructure in a second location,” says Armijo. “With cloud computing, there is the ability to package large sets of infrastructure. You can package the applications, make hundreds of copies, test it to scale, perform destructive testing, test out your disaster recovery and test load. You not only get economic benefit, but you get time-to-market and a better product in the end, because you can test it over and over again.”

By working through a cloud-based system like AppLogic, 3Tera’s turnkey cloud computing platform, entire websites are available for instant analysis. A site and its complete architecture — every working part — can be copied and immediately distributed through the cloud to its engineers to diagnose, test and solve a problem. In a standard environment, that process might have included making physical copies, slow distribution and down time while a patch was uploaded to multiple servers. It would have been much more labor-intensive and costly.

Higher Productivity and Convenience

Every small business owner knows that a key to success is squeezing the most out of what you have. And that means always seeking higher productivity. This is where cloud computing can make a big impact.

“These days it’s not about collaborating in a single office,” says Chris Yeh, VP of Enterprise Marketing for PBwiki. “You have partners, vendors and consultants...maybe even clients to collaborate with.”

Through a Web browser and a system like PBwiki, many different people can be working on the same project simultaneously. Documents can be viewed, edited, shared and stored all within the cloud. There’s no need to save and attach a file, and you can be sure that all parties involved are working on the most up-to date version of a project. And because everything is hosted in the cloud, it’s accessible anywhere, at any time.

As mentioned previously, less time spent managing infrastructure means more time focusing on growing a business. That means important resources can be reallocated to places where they have the potential to impact a business not seen before. A company’s IT staff, for example, may experience a rebirth of sorts.

“There are very creative people locked up in IT shops all over the place,” says Armijo. “We’re going to see that creative energy released. IT projects will now be faster, real-time in terms of its value proposition to the business. You’ll see IT jobs actually go up, especially if IT becomes in a position to add value to the company.”

Clearly, there are benefits to working within the cloud. It gives businesses of all sizes the opportunity to get more done, faster and smarter. In some ways, the cloud levels the playing field for small and startup businesses. They are now able to access some of the most powerful technologies available, previously reserved for major corporations with big budgets.

Of course, it may take some convincing too. There are still concerns over data security and overall control, and learning a new system. But cloud computing is gaining traction. According to a survey conducted by Evans Data, more than half of all developers around the world are expecting to work in some capacity on SaaS applications in 2009. Everyone from lawyers and marketers, to huge corporations like Microsoft, even the federal government are already working in the cloud.

Get Your Feet Wet!

Not sure if cloud computing is right for your business? In addition to the resources in this article, below are some simple tools and websites that won’t break your budget, but offer a way to jump into the cloud and see what works for you.

Joyent: Starting at $45 per month, Joyent offers cloud services including collaborative communications, on-demand storage solutions and scalable infrastructure. Joyent helped scale LinkedIn to one billion page views per month.

Amazon Simple Storage Service (S3): Store and retrieve any amount of data from anywhere on the Web. S3 is a pay-as-you go system, and there is a calculator on the website to help determine costs.

Basecamp: Just $24 per month will get you into a collaborative environment with Basecamp. The plan includes 3GB of space, unlimited users and 15 active projects. There’s also a free 30-day trial.

Mozy (mozy.com): Unlimited backup for your hard drive in the cloud, free for limited home use and starting at $4.95 per month for unlimited use. Pro and Enterprise solutions are also available.