I am frequently asked by client and colleagues about the exact nature of “Cloud Computing”. Recent commercials have end users charging “to the cloud” and this further blurs the lines between real business value and consumer marketing for cloud services. Here I will try to break down common services that can be obtained from the cloud. I think that you will find that you are well aware of “the cloud” and have already come to depend on it. This does not exhibit an all-inclusive list, but these simplified categories will give you an idea of the variety of available services.

1. SaaS (Software as a Service)

This type of cloud computing delivers a single application through the browser to thousands of customers. On the customer side, it means no upfront investment in servers or software licensing; on the provider side, with just one app to maintain, costs are low compared to conventional hosting. Salesforce.com is by far the best-known example among enterprise applications, but SaaS is also common for HR apps and has even worked its way up the food chain to ERP.  And who could have predicted the sudden rise of SaaS "desktop" applications, such as Google Apps and Zoho Office?

2. Utility computing

The idea is not new, but this form of cloud computing is getting new life from Amazon.com, Sun, IBM, and others who now offer storage and virtual servers that IT staff can access on demand. Early enterprise adopters mainly use utility computing for supplemental, non-mission-critical needs, but one day, they may replace parts of the datacenter.

3. Web services in the cloud

Closely related to SaaS, Web service providers offer programing interfaces that enable developers to exploit functionality over the Internet, rather than delivering full-blown applications. Some web services that you may have used are Google Maps that have been embedded in an independent web site like a hotel, ADP payroll processing, the U.S. Postal Service, Bloomberg, and even conventional credit card processing services.

4. MSP (managed service providers)

One of the oldest forms of cloud computing, a managed service is basically an application exposed to IT staff rather than to end-users, such as a virus scanning service for e-mail or an application monitoring service. Managed security services and cloud-based anti-spam services can filter your network traffic and deliver clean purified traffic to your doorstep. Other offerings include desktop management services that can alert a service provides to problems areas in your network before they progress to full blown outages.

Today, cloud-based services might be more accurately described as "sky computing," with many isolated clouds of services which customers must plug into individually. These loosely coupled services running on an agile, scalable infrastructure is among the biggest of trends that is here to stay. Now, when you hear of “The Cloud”, you understand that it has value and you probably have been using it all along.