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It's with this in mind that the metaphor of the cloud was borrowed from old telecoms network schematics, in which the public telephone network and later the internet was often represented as a cloud to denote that the just didn't matter -- it was just a cloud of stuff. This is an over-simplification of course; for many customers location of their services and data remains a key issue.

Cloud computing as a term has been around since the early s, but the concept of computing-as-a-service has been around for much, much longer -- as far back as the s, when computer bureaus would allow companies to rent time on a mainframe, rather than have to buy one themselves. These 'time-sharing' services were largely overtaken by the rise of the PC which made owning a computer much more affordable, and then in turn by the rise of corporate data centers where companies would store vast amounts of data.

But the concept of renting access to computing power has resurfaced again and again -- in the application service providers, utility computing, and grid computing of the late s and early s. This was followed by cloud computing, which really took hold with the emergence of software as a service and hyperscale cloud computing providers such as Amazon Web Services. Building the infrastructure to support cloud computing now accounts for more than a third of all IT spending worldwide , according to research from IDC.

Meanwhile spending on traditional, in-house IT continues to slide as computing workloads continue to move to the cloud, whether that is public cloud services offered by vendors or private clouds built by enterprises themselves. Analyst Gartner predicts that half of global enterprises using the cloud now will have gone all-in on it by It's also growing at a faster rate than the analysts expected. But it's not entirely clear how much of that demand is coming from businesses that actually want to move to the cloud and how much is being created by vendors who now only offer cloud versions of their products often because they are keen to move to away from selling one-off licences to selling potentially more lucrative and predictable cloud subscriptions.

Cloud computing can be broken down into three cloud computing models. Infrastructure-as-a-Service IaaS refers to the fundamental building blocks of computing that can be rented: physical or virtual servers, storage and networking. This is attractive to companies that want to build applications from the very ground up and want to control nearly all the elements themselves, but it does require firms to have the technical skills to be able to orchestrate services at that level. Research by Oracle found that two thirds of IaaS users said using online infrastructure makes it easier to innovate, had cut their time to deploy new applications and services and had significantly cut on-going maintenance costs.

However, half said IaaS isn't secure enough for most critical data. Platform-as-a-Service PaaS is the next layer up -- as well as the underlying storage, networking, and virtual servers this will also include the tools and software that developers need to build applications on top of: that could include middleware, database management, operating systems, and development tools.