Called out on Cloud Computing

Anything Goes!: Cloud Computing has me in a cloud!

I saw this post by Matt (at least I think this is Matt’s blog) about cloud computing, and realized that I may be guilty of an over-simplification in class.  Matt rightly points out that there are a  number of terms that seem to be used synonymously – cloud computing, utility computing, grid computing, etc.  What’s the difference between these terms?

In my mind, the difference is similar to that of insourcing, outsourcing, and offshoring.  Yes, there are differences between the terms…but do they really make a difference?  In the case of insourcing, outsourcing, and offshoring they key issue is that a company is hiring someone else to performa key business process.   I’m sure for supply-chain experts these distinctions may be critically important, but for me the commonalities between the terms are more important than their differences.

In the same way, there are some key differences between cloud computing, utility computing, and grid computing.  (Technically, the example of renting storage and processing space from Amazon is utility computing).  I’m not sure that the differences between them are as important as their similarities, though.  The key issue here is that we’re seeing a shift in computing the hardware and software companies use to run their businesses are not owned by or located at the company.  Rather, they are owned and managed by third parties and companies simply pay for the rights (or ask for the rights in some cases of grid computing) to use the computing resources.

We business school types love to invent all sorts of cool-sounding terms to make it sound like the concepts we study are far more complex than than really are.  Nevertheless, I do thing the core concepts are relatively simple and its this understanding of the “big picture” that is most important.  We don’t want to miss the forest for the trees.

So, congratulations to Matt for noting the imprecision in my examples.  I regret that it may have caused him and others confusion, but I really appreciate the pushback.