In a nutshell, cloud hosting (often also referred to as clustered hosting) is a step up from the shared hosting infrastructure that is commonly used today.

By handling security, load balancing and server resources virtually you are no longer restricted to the limits of one physical piece of hardware. In basic terms, online operations are not limited to a single server, they have access to the processing power of a number of servers that are distributed in real time.

In a physical environment, a web site (for instance) is limited to the resource constraints that is housed within the physical unit (RAM, processing power, bandwidth etc). The concept of a cloud infrastructure no longer has this limitation – you, as a customer, can purchase as much computing power as you need from a virtually inexhaustible supply. The nature of the infrastructure means that scaling up and down is seemless and thus spikes in traffic aren’t problematic.

Load-balancing occurs at the software level and is dynamically load-balanced across a number of servers. Servers can be added or removed from the cluster with no impact or downtime on hosted applications meaning less disruption for customers. The cloud architecture has the ability to provide small and medium enterprises the stability and resilience of a web hosting architecture that a few years ago only huge corporate organisations could obtain through huge IT expenditure.

Scalability

Through your cloud hosting account, you can add and/or remove resources to your hosting environment, as and when you need them.

Instant

As you change your hosting environment settings, the effect is immediate.

Save Money

You only pay for what you use – gone are the days of renting additional servers for short periods of time to load balance your site.  Simply increase your cloud hosting requirements, until you no longer need them at that level.

The advantages of hosting in the cloud are very well documented, indeed on this site there are numerous articles explaining why the whole world and its dog should consider migrating to the cloud. This is the devil’s advocate article that describes some of the dangers that you may be taking on if you do choose to make the switch.

What is going on behind the scenes?

A new Software as a Service (SaaS) startup company (we’ll call it SaaSware) has decided to leverage the infrastructure of a major cloud hosting provider upon which it can build its proprietary software. It’s fantastic because SaaSware doesn’t have to fork out thousands of dollars on servers, storage and other expensive network equipment, and it also doesn’t need to understand much of what happens at the technical level – the cloud simply takes care of that.

The added layer of abstraction, whilst hugely beneficial in many ways, is also a double edged sword, especially when things start to go pear shaped.

As a cloud hosting customer, I don’t know how my data is being held, where it is being stored, how it traverses the network – I am simply at the mercy of the provider. Whilst I understand that the cloud is theoretically much more resilient and stable than a dedicated server, it’s also more complicated and in the event of an epic failure there may be no route to recovery, or at least a more difficult route than simply restoring a RAID5 array.

Vendor Lock-in

SaaSware have spent a year or two customising their CRM software for clients on a specific cloud platform and are beginning to reap the rewards. All of a sudden the cloud vendor realises it’s profit margins are too small and takes its consumers on a price hike of catastrophic proportions. It soon becomes clear that SaaSware can’t afford to pay the new prices and needs to look for another provider.

If SaaSware had its own dedicated server, it would be easy to replicate the environment through another provider. Another server with the same OS and configurations could be provisioned quickly and subsequently the files and data could be transferred across. The DNS settings would be updated and everything would work. Still an arduous task, but it doesn’t require any development changes.

In the cloud, whilst there are incentives to ensure inter-operability between providers (see the Open Cloud Manifesto) , we aren’t there yet making a provider transfer an extremely difficult task to undertake.

Vendor lock-in has already been mentioned as a possible danger by gurus in the web industry such as Richard Stallman (GNU Founder) – >Read More.

Pricing Sting

SaaSware modified their CRM software and migrated to another cloud hosting provider, one with a more competitive RAM/Hour rate. During the testing phase of their eagerly anticipated product release, the team of developers left their machines connected to the test server running test scripts that require significant processing power to complete. Overnight processing was the standard protocol when SaaSware had their own dedicated servers.

Unfortunately, the new cloud host charges per CPU clock cycle and the extensive testing performed each night for a period of one month resulted in a huge bill at a time when cashflow for the new startup is very tight.

Traditionally when you buy hosting, you pay in arrears and you renew after each year thereafter. In the cloud you are susceptible to rise and falls in server charges on a monthly basis and maybe stung with a freak bill that wasn’t foreseen.

Generally speaking, for the larger sites on the web, the cloud is proving cost effective. However, the service is still in its infancy and therefore pricing is not as competitive as it will be in the years to come.