The term Cloud Computing was derived from network diagrams using a cloud to represent the Internet. In general, the term refers to the migration of data center computing assets, most of which are currently located in datacenters behind firewalls, to the Internet. There are two primary types of Cloud Computing services available:

1. SaaS.

This type of cloud computing delivers a single application through the browser to thousands of users. For customers, it means no upfront investment in servers or software licensing; on the provider side, there is just one application and infrastructure to support. Salesforce.com is by far the best-known example, but SasS is also common for HR and ERP applications. Other well known SasS applications include Google Apps and Zoho Office.

2. Utility computing.

Recent advances in server performance capabilities now make it cost effective for very powerful servers to be shared over the Internet by many smaller companies. For customers, this results in cost reduction due to outsourcing of hardware and network infrastructure support costs. This form of Cloud Computing essentially replaces all or part of the customer’s datacenter, creating virtual datacenters from commodity servers, shared by many customers over the Internet.