The network has become the computer, and cloud computing is fast becoming a reliable infrastructure

THE TERM "cloud computing" encompasses many areas of tech, including software as a service, a software distribution method pioneered by Salesforce.com about a decade ago. It also includes newer avenues such as hardware as a service, a way to order storage and server capacity on demand. What all these cloud computing services have in common, though, is that they`re all delivered over the internet, on demand, from massive data centers.

The cloud has the capacity to universally level the playing field, bringing down barriers that stand in the way of smaller companies. On the more tactical side, the cloud offers a low-cost and expedient model for acquiring IT services for consumers and enterprises alike. Some of the early adapters have taken advantage of these benefits to launch applications in a matter of weeks (as opposed to months) and for fractional costs, as compared to those incurred using in-house computing facilities, services, and processes.

OPEN SEASON

If you think this is just a fad, think again. Those vendors that can adjust their product lines to meet the needs of large cloud computing providers stand to profit, so companies like IBM, Dell, and HP, for instance, are moving aggressively in this direction. One of the companies actively pursuing a cloud strategy is Rackspace Hosting, which recently announced its cloud hosting strategy that will be backed up by its acquisitions of Slicehost and Jungle Disk, and relationships with Limelight Networks, Inc. and Sonian Networks.

Lew Moorman, Rackspace Hosting`s chief strategist explains that cloud computing is changing the landscape. "Cloud computing is basically changing the economics of IT, particularly with its ability to save companies money," he says. "The concept has been advancing over the last couple of years, and now it`s starting to pull together."

According to him, moving into the cloud arena made too much sense not to - the cloud computing offering provides benefits to Rackspace`s customers in complementing its traditional managed hosting services. "It`s going to become mainstream in the next year," Moorman says. "Today, cloud computing is being used by early adopters, but it`s reached the tipping point. It`s definitely going to be on the agenda for companies of all sizes."

SMES

One group of businesses that particularly stand to gain from the cloud are SMEs. At the moment, too many of them don`t know what cloud computing is, and very few understand what benefits it can bring to them. Research has shown that more than half of UK (57%) and US (58%) SMEs are unaware of the term cloud hosting, and 27% of UK SMEs `don`t know how they would use cloud hosting as part of their IT mix`. A third of US SMEs (33%) agreed with this statement.

But it`s not just smaller businesses that stand to gain, so Rackspace is quickly developing one of the most comprehensive hosting solution suites ranging from dedicated managed servers and hosted e-mail solutions to highly scalable cloud hosting and storage services based on open standards and technologies. "Customers should use whatever is best for them," says Moorman. "Having computing so accessible and dependable is creating new demand, and it`s a big market, providing us with a good opportunity to grow."

IT departments and small businesses now have a full range of tools to power their computing needs, and Rackspace appreciates that being a leader in hosting means being a leader in the cloud. Some analysts say cloud computing represents a sea change in the way computing is done in corporations. Merrill Lynch estimates that within the next five years, the annual global market for cloud computing will surge to $95 billion. While concerns will linger in business areas that are traditionally resistant to change, these figures indicate that most of the business world will gradually come to grips with the reality of dealing with "virtual enterprises".