Although the term cloud computing has recently spread like wildfire, many people are still left wondering, what really is the cloud? Here’s a quick breakdown of common cloud terminology to help you better understand how your logistics business might use the cloud.


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What is Cloud Computing?

It refers to a collection of servers hosted in a data center, allowing resources (CPU, memory, and storage) to be accessed and consumed remotely, via the Internet.

Put simply, instead of keeping your servers in-house, when ‘in the cloud’, your business servers are located in a data center and accessed online.

When your business needs more computing power, you can add more for a monthly fee, and you can scale back if you need less, saving money in the process. Cloud-based systems adapt as you need them.


What is IaaS?

Let’s get the terminology down first. IaaS stands for Infrastructure as a Service and it means exactly that—the ability to use a complete IT infrastructure (firewalls, network switches, servers, etc.) as a service instead of having to buy or build it on your own.

In other words, you pay a monthly fee to a provider to run your software, data, and transactions from their equipment. In return, your provider is fully responsible for buying and maintaining your IT infrastructure and ensuring it runs around the clock.

Note: The IaaS provider is only responsible for the availability of your hardware. Your IaaS provider is not responsible for your operating system, software applications, and/or data.


What is SaaS?

Software as a Service (SaaS) is a similar concept to IaaS, but SaaS refers to software services only. SaaS refers to software that is:

  • Licensed in a subscription model
  • Hosted and managed by a company
  • Consumed by others remotely via the Internet

The software provider installs, manages, and maintains the software and is responsible for the availability of the system and the data. Examples of popular SaaS solutions include Microsoft Office 365 and Google Docs.


What is a Public Cloud?

The public cloud is simply a collection of cloud computing resources (servers, storage, and networks) shared by a large number of users and accessed via the Internet.

In this model, all the hardware is shared among a large number of companies and the subscriber lacks full control over the performance of servers, computers, network, or storage—because everything is shared.

Although some logical segregation of computing resources exists, a sudden spike that deviates from the normal consumption of server resources can impact the responsiveness of computers and servers running from a shared environment. Plus, because public clouds are shared, they’re inherently more at risk for security exploits.

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What is a Private Cloud?

Private clouds are significantly different from public clouds in terms of privacy and the way resources are consumed. Just like public clouds, private clouds are a collection of servers, storage, and network devices consumed by remote users via the Internet.

The most important way public clouds and private clouds differ is that in a private cloud environment, the customer has higher levels of security, privacy, and control than in a public cloud.

In a private cloud environment, customers use dedicated hardware (not shared) and additional layers of network segmentation and protection are used to protect the privacy and integrity of data and services.


What is a Hybrid Cloud?

The term hybrid cloud has two distinctly different meanings.

1. The practice of running some systems from the public cloud while running other systems from the private cloud.

Most businesses with security compliance requirements (financial and medical offices, for example) select this model to run and store sensitive systems and data in a private cloud while running less sensitive systems from the public cloud.

2. Run some parts of their systems on in-house servers and some from the cloud.

This is particularly useful when companies decide to move systems with a high cost of ownership to the cloud as a way of reducing overhead, while keeping low-cost systems in-house.

For example, many companies decide to migrate their email system to Office 365 (a cost-intensive system)—while keeping applications or file servers in-house. A hybrid approach is not only great for cutting costs, but also for the added convenience and security of the cloud.


Is the Cloud Right for Your Supply Chain Business?

The convenience of cloud computing can offer many benefits to any supply chain organization, large or small. The cloud can allow you to access your data and systems from any device so you and your people can work and collaborate from anywhere. The cloud can even help your employees file contracts, invoices, and agreements from clients right on the spot, in real time. The cloud can also guarantee round-the-clock availability and seamless software and hardware updates.

However, moving your business entirely to the cloud isn’t always the best solution, and making the move requires a lot of careful planning. Also, when considering to move systems to the cloud, it is very important to select a cloud provider that aligns with the technology the company currently uses and technologies the company plans to use in the future.


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