Cloud Computing is the next big trend in the way,  Information Technology will be managed in the future. The  definition of cloud computing usually varies from: Simply  utilizing virtual servers available on the internet for computing  power. Increased computing capacity on demand without any  capital investment on new resources like infrastructure,  resources & licensed software. Generally the spend on cloud  computing is in terms of a fixed subscription fee on a periodic  basis (monthly) or simply pay-as-you-use a service.
          According to Berkeley scientists, "Cloud computing  refers to both the applications delivered as services over the  Internet and the hardware and systems software in the  datacenters that provide those services. The services  themselves have long been referred to as Software as a Service  (SaaS), so we use that term. The datacenter hardware and  software is what we will call a Cloud." Users get to access  software that resides on servers in the "cloud" from any where  using the internet.  
According to Berkeley scientists, "Cloud computing  refers to both the applications delivered as services over the  Internet and the hardware and systems software in the  datacenters that provide those services. 
          Dont buy Software but subscribe it on a need basis
          In a cloud, software is hosted out of servers belonging  to Service Providers. Users need not buy software anymore.  Users pay per usage or simply subscribe on a period basis. 
  Cut down Software maintenance costs
                        Organization plan and deploy hardware infrastructure  & may setup private data centers for software applications,  based on peak capacity requirements. Instead Organizations  can now use Software hosted on a SAAS platform without  having to spend on software hardware maintenance. The  Service Provider owns the responsibility of scaling the  capacity available to their customers. Adequate Backups,  Redundancy, Disaster recovery mechanisms, "No-down-time",  Complete Protection of data, are all part of SLA Governing  the offering  
                        New Upgrades to software will also be done automatically  without any user intervention. No down time and high  reliability  
  Increased reliability stems from the fact that the cloud  runs on systems that are extremely reliable and provide  various forms of redundancy. If a storage server on the cloud  fails due to hardware or software issues, the service provider  needs only to shift the load over to other servers or bring up a  backup server in its place. If it is occurred at an users premises  with installed software a simple issue can turn to hours of  technical support over the phone, costly downtime, and  unhappy users and customers
                        Scale up or down at will  
  In a cloud computing environment, Enterprises can  subscribe & have storage capacity scaled up or down  depending on their requirements. Service providers need only  to add servers or shift load from one server to another to  accommodate for the additional use of space. The same goes  for software application use. 
  Reduce cost – move marginal costs from CAPEX to OPEX   
                        There is no need to invest in terms of hardware and  software licenses. The cost now shifts to OPEX (Operating  Expenses) because of the need to pay nominal subscription  fee on a periodic basis. Additional IT staff head count and the  salary paid out to them will be reduced.  
                        Environmentally friendly  This model leads to a better Carbon foot print across  the globe because the need for number of sophisticated  hardware that consumes lots of energy deployed will be  reduced, as more and more enterprises disinvest on data  centers and move to the SAAS platform  
Read More                                             Access anytime, anywhere, pay-as-you use!
                        Through this model, software and related services are  rendered through the internet, which means "anytime  anywhere" availability without location constraints. 
  Seamless version upgrades to hosted software 
  Cloud computing provides a common platform for all  enterprises accessing the software or services to work on the  most-recent / up to date / modern technology. The users will  only experience new or better functionality as hardware &  software are upgraded with newer versions. 
  CLOUD COMPUTING SERVICES & Offerings 
  Cloud computing provides a common platform for all  enterprises accessing the software or services to work on the  most-recent / up to date / modern technology. The users will  only experience new or better functionality as hardware &  software are upgraded with newer versions. 
  Saas (Software as a Service)
  An application accessed through a browser by  thousands of customers using a multitenant architecture.  Salesforce.com is the best example for a SAAS based solution 
  Infrastructure services  
  This is a model by which Storage and virtual servers are  available on rental / demand. Usually it begins as a non  mission critical need. Amazon.com, Sun, IBM are providers  of Utility computing services.  
  Application integration services   
  Web service providers offer APIs that enable  developers to exploit functionality over the Internet, rather  than delivering full-blown applications. They range from  providers offering discrete business services -- such as Strike  Iron and Xignite -- to the full range of APIs offered by Google  Maps, ADP payroll processing, the U.S. Postal Service, Bloomberg, and even conventional credit card processing  services.  
  Platform as a service
  This service delivers software development  environments on demand to programmers, who build their  applications that run on the service providers Infrastructure  and delivered to users via the Internet. Prime examples  include Salesforce.com Force.com,
  Managed services 
  This is an old form of cloud computing, where in the  IT department of the enterprise plays a crucial role. Services  such as a virus scanning service for e-mail or an application  monitoring service (which Mercury, among others, provides)  are already there in town. 
                        Examples are SecureWorks, IBM, and Verizon   
                        About the author  
  --Suresh Jagannathan is currently working as Solutions Architect  in TAKE Solutions. He has over 7 years of Supply Chain Management  practice with Organizations like P&G, TTK-LIG, IFF & 7 years of  SCM IT Products experience as Specialist & Solutions Architect.