Recently cloud computing has become one of those terms that s permeated the IT world. So what is it?

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1 Cloud Computing November 2010

2 Recently cloud computing has become one of those terms that s permeated the IT world. So what is it? Cloud computing refers to anything that involves delivering hosted services over the Internet. Rather than running software off of a machine or server in-house, users subscribe to the software as a service that s hosted elsewhere. This eliminates the need for companies to purchase and maintain servers. Also, unlike traditional hosting, a cloud service provider can sell services on demand (by the minute or hour); the service is elastic meaning a user can have as little or as much of as service as they want; and the service is fully managed by the provider (a consumer just needs a personal computer and Internet access). The major segments of cloud computing include: SaaS (Software as service). SaaS is a type of cloud computing that delivers a single application via browser to thousands of customers while using a multi-tenant architecture. Utility computing. Similar to public utilities, these providers bundle computing resources such as storage, backups and computational capacity on a metered basis. Web services in the cloud. This is a similar category to SaaS. APIs (Application Programming Interfaces) are delivered over the Internet to developers. This keeps developers from having to develop full-blown applications. Platform as service. This is also another variation of SaaS. This form delivers development environments as service. Developers can build their own applications that run on the provider s infrastructure. The apps are then delivered to users via the Internet using the provider s servers. 2

3 MSP (Managed Service Providers). This was one of the first forms of cloud computing. MSPs typically deliver applications to the IT industry rather than end-users. Examples include virus scanning service for or application monitoring services. Service commerce platforms. This is a hybrid of SaaS and MSP. They re most common in trading environments, such as expense management systems that allow users to order travel or secretarial services from a common platform that then coordinates the service delivery and pricing within the specifications set by the user. Internet Integration. Currently, the web integration of cloud-based services is in its infancy. Today, these services are more accurately described as isolated clouds that end-users have to individually plug into. As cloud computing is a trend within the overall IT industry, it is helpful to look at recent trends and growth within the overall industry. The beginning decades of the 21st Century may become known as the Broadband Age or Convergence Age. A few years back, the advent of the networked computer was truly revolutionary in terms of information processing, data sharing and data storage. In the 90s, the Internet was even more revolutionary in terms of communications and furthering the progress of data sharing, from the personal level to the global enterprise level. Today, broadband sources such fiber-to-the premises, Wi-Fi, and cable modems provide high-speed access to information and media, creating an always-on environment for many users. The result is a widespread convergence of entertainment, telephony and computerized information: data, voice and video, delivered to a rapidly evolving array of Internet appliances, PDAs, wireless devices (including cellular telephones) and desktop computers. This will fuel the next era of growth, leading to a steady evolution in the way we access and utilize software applications. The convergence of information sets the stage for cloud computing. A widespread convergence of entertainment, telephony and computerized information will fuel the next era of growth, leading to a steady evolution in the way we access and utilize software applications. 3

4 Targeting Cloud Computing Companies As cloud computing is a trend within the information technology industry, we recommend starting with the following NAICS codes. NAICS Code Description Electronic Computer Manufacturing Other Computer Peripheral Equipment Manufacturing Semiconductor and Related Device Manufacturing Printed Circuit Assembly (Electronic Assembly) Manufacturing Software Publishers Data Processing, Hosting, and Related Services Custom Computer Programming Services Computer Systems Design Services In addition to the NAICS codes listed above, we would also recommend applying the following key words when searching for companies. Key Words 4

5 Target Universe for Information Technology The following parameters were used to identify the information technology universe Sales: $10M minimum Employment: 100 minimum Events: Predictive events such as growth, executive change, merger/ acquisition, new market development, new products/services, new contracts, initial public offerings, and raising of funds. Information Technology Universe Target Universe ($10M+ sales or 100+ employees) With Growth and/or Events 5,682 1,967 Sources: Plunkett, Jack. Introduction to the InfoTech Industry. InfoTech, Computers & Software Industry. Last updated February 11, Houston: Plunkett Research Ltd. Online Database. 26 April 2010; What Cloud Computing Really Means, Eric Knorr & Galen Gruman, InfoWorld. The Top 10 Cloud Computing Trends, David Hakala, Apr , 5

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