Software-as-a-service applications are bringing enterprise-level functionality to small and midsize businesses, often with greater reliability and at lower cost than packaged alternatives. Could on-demand IT infrastructure, procured via the cloud, be next?
Who has time for managing IT infrastructure? Think of all the hardware that needs tending, not to mention the licensing arrangements, maintenance agreements, vendor evaluations, bandwidth monitoring, troubleshooting, and sheer number of salespeople who come calling.
No wonder many small and midsize companies rely on contractors or managed service providers (MSPs) well-versed in IT arcana to handle some or all of their infrastructure requirements. But with the rise of software-as-a-service (SaaS) applications -- including Google Apps, hosted Microsoft Exchange, Salesforce.com, and NetSuite -- many businesses are now wondering: Why not procure IT infrastructure via an on-demand model in which a vendor manages all of the hardware and software, and charges only for what's actually used?
Just think: No more bothering with individual application licenses, software subscriptions, servers, or data centers. Simply procure an application -- and everything required to run it -- in a moment's notice from a cloud computing provider, and pay a single fee to cover a fractional application license fee and for CPU cycles consumed.
Sound like a pipe dream or a near-term reality?
In fact, an increasing number of IT infrastructure services are becoming available on the fly. "Most recently, for example, cloud computing has surfaced with very raw services like extending storage in the cloud, and getting a platform for running a software image or operating system," says Mike West, VP of Saugatuck Technology, a research firm based in Westport, Conn. In the future, cloud-computing capabilities may take this a step further by not just providing the platform, but everything a small or midsize business needs to run on top of it.
Early One-Off Projects
So far, however, the biggest users of on-demand infrastructure services are SaaS vendors, which use them to host their applications, facilitate integration, and store application data; as well as "startups, bootstrapped companies, and Web 2.0'ers," says Michael Sheehan, technology evangelist at GoGrid, a division of San Francisco-based MSP ServePath. "However, SMBs are edging into it, as is the enterprise, through one-off projects, development environments, [and] skunk works."
Don't Miss: Running Your Business In The Cloud
For example, The New York Times used Amazon Web Services -- which includes the Elastic Computing Cloud (EC2) and Simple Storage Service (S3) -- for a one-time batch operation to generate PDFs of 11 million articles. Meanwhile, ScribbleLive, a blogging platform, employed GoGrid to help it scale up during this year's Apple Worldwide Developer conference, when its page views spiked from 181,000 per day to 2.3 million per day. The cost to ScribbleLive: $15 per day, plus SQL Server and bandwidth charges -- or less than many Apple fanboys' bar tab for the conference.
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