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De-Mystifying Cloud Computing

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BY KENNETH J. SOLE

Much of a credit union’s computing activities take place in the cloud these days, but what is this nebulous space in the Internet skies really all about? Credit Union BUSINESS’s tech expert takes away some of the mystery surrounding cloud computing and clarifies it in language your CU can understand.

As a holder of a private pilot’s license, I have been taught that flying through clouds requires specialized knowledge and the use of sophisticated electronic instrumentation for navigation. So too with venturing into the world of cloud computing – the credit union should be fully prepared through education and diligence …..

The term “cloud computing” has been applied to all forms and manner of remote processing in recent times. It is utilized to describe everything from a simple VPN (virtual private network) link to a remote service provider (the traditional data center) and often includes myriad other iterations of remote computer processing as well. In some ways, these applications may all apply, but the formal definition of cloud computing is “the practice of using a network of remote servers hosted on the Internet to store, manage and process data, rather than a local server or a personal computer.” This definition is further broken down into three main sub-categories or types of cloud offerings (i.e., IAAS (Infrastructure as a Service), SAAS (Software as a Service) and PAAS (Platform as a Service)).

Taking a closer look at each of these definitions, IAAS is the practice of utilizing hardware that resides in the cloud to store data and programs. This hardware can come in the form of file servers, PCs, data storage, telecommunications and other traditional network components. Advantages of IAAS include rapid deployment of resources, not having to be burdened with maintaining and securing hardware, not having to deal with obsolescence and never having to worry about backup computer capabilities in the event of an unplanned outage. IAAS also easily facilitates scalability – the practice of adding and eliminating computer resources based upon demand.

SAAS tends to identify itself more closely with what the industry has known to be the traditional service center type of application processing. A service provider might have an application processing system such as a loan origination capability or a financial analysis function and offer it via a cloud-based infrastructure. In this instance, the subscriber of the cloud capability does not have to deal with software upgrades, patch applications, regulatory changes and other normal software maintenance functions that are usually associated with management of software.  

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