What is the Cloud? (No really, what is it?) - Part 1

We see it everywhere in the business world: the mention of SaaS, cloud-based solutions, or a company moving to “the cloud.” As cloud computing becomes the norm and its costs decrease, now may be the best time to start thinking about scrapping your costly computer servers and bringing your organization into the future. Let’s talk about the history of the cloud, where it’s headed, and how you can take advantage of this technology.

Unless you have been living under a rock for the last decade, you have likely heard countless mentions of “the cloud.” Perhaps it was a company announcing their migration from servers to the cloud using a new SaaS software provider. Or maybe you personally decided to save storage and move your photos from your ever-crowded smartphone to Dropbox or Google Drive. The fact is, you’ve experienced the effects of the cloud – perhaps without even knowing it! However, the details and mechanics of cloud computing remain a mystery to most, even as it changes the digital world as we know it. To understand the concept of cloud computing, let’s think back to a time, not too long ago, before cloud computing.

The origin story of cloud computing

Remember using your personal computer, which was generally made up of a monitor connected to a boxy, constantly fanning CPU? (Stay with me, Gen Z…) Whenever you downloaded a song, or saved a document, that file was saved onto the hard drive of your CPU hardware. As that hard drive filled up, you either deleted older files to clear space, or you purchased an additional external hard drive for extra space. This was the same case for businesses – a company would connect its computers via an internal network to servers that are larger computers and able to fit an organization’s mountain of information. When a company needed more file space, purchasing additional servers and related hardware was a hefty but necessary investment.

As internet speeds and computer power skyrocketed, products like Amazon Web Services (AWS) and Microsoft Azure began to invest in “server farms,” or large buildings that housed massive numbers of physical servers. Individuals and companies could then connect with these server farms via internet connection and essentially rent a portion of computing power and capacity at the server farm. Then, anytime a file or program was accessed, a company’s computer could then access what was needed over the internet via connection to the separate server. This is what has come to be known as cloud computing.

A cloud by any other name

As the number of confusing acronyms in the tech world grows day by day, let’s take a moment to look at a few of the most common cloud-related services.

  • Infrastructure-as-a-Service (IaaS) – This type of cloud service relates to the location of a company’s programs and related information. Companies can subscribe to various amounts of server capacity from a cloud provider and store their data offsite.

  • Software-as-a-Service (SaaS) – Historically, software was required to be installed locally on a computer, and any saved information remained locally on that computer. With SaaS programs, the software is located on a cloud server, and users access the software through a website or web-connected interface. This format offers real-time updates and the ability to share with other users via the internet.

  • Platform-as-a-Service (PaaS) – While more focused on the companies performing software development, dedicated servers were historically required for developers to create code and provide updates to programs and applications. A PaaS solution provides developers with the ability to easily maintain development and production servers, share current work with other team members, and push patches and updates on a real-time basis.

Now you’re a cloud expert. Well, sort of. It’s important to have foundational knowledge of any new system to assess its value for your company. Next week, we’ll dive into the potential benefits of migrating to the cloud.

In the meantime, share with us: What cloud providers do you use (e.g. Google Drive, Dropbox, iCloud) for your personal data, if any? What do you like (or not like) about them?

Kyle Geers

Kyle Geers is a seasoned professional based in Los Angeles, CA. With 10+ years of public accounting experience, including seven years with global CPA firm Grant Thornton LLP, Kyle has been involved with financial statement and integrated audits of both public and private businesses, ranging from emerging start-ups to multinational corporations with complex operations. He also holds extensive advisory experience in assisting businesses with their technical accounting and financial reporting. He is a graduate of the Goldman Sachs 10,000 Small Businesses accelerator program, and a member of the 2019-2020 Class of ACG Los Angeles’ Rising Stars Program.

Kyle is a licensed Certified Public Accountant in the state of California. He has significant knowledge of accounting standards under US GAAP, covering a wide range of accounting topics, and has led numerous engagements in transforming client accounting/finance functions to comply with US GAAP. He holds a Bachelor’s Degree in Business Economics from University of California, Los Angeles, with a minor in Accounting.

Previous
Previous

What is the Cloud (No really, what is it?) - Part 2

Next
Next

What the Russia-Ukraine Conflict Means for Global Accounting