With all the hype around "the cloud," it's difficult not to be skeptical about its value. While cloud computing seems complex, it is possible to understand the building blocks that help make the cloud more tangible for businesses of all sizes. In fact, understanding the innovation the cloud delivers can profoundly impact critical parts of your business and may be the key in providing business growth and scalability. However, before diving into cloud adoption, it's worth doing your homework.

There are many terms in the cloud computing lexicon, including popular terms like IaaS (Infrastructure as a Service), PaaS (Platform as a Service) and SaaS (Software as a Service). As the owner of a growing business, you will likely have direct experience with SaaS - software applications most often hosted in the cloud. You'll find that the SaaS market is considerably larger than the PaaS or IaaS markets, and SaaS adoption continues to grow. According to a recent Techaisle survey on SMB Business Application Cloud Computing, over 70 percent of respondents have already implemented cloud business applications in the past three years and plan to add an average of 2.9 cloud business applications to their current suite in 2012. In any case, let's break down these terms as they relate to the cloud, removing needless complexities and using a language even technophobes can understand.

IaaS - Systems, Storage and Processing Delivered from the Cloud
IaaS means delivering a virtual server, desktop computer or remote storage from the cloud. In other words, a hosting provider gives you a remote data center - where it manages the infrastructure, servers and virtualization - and you access your virtual computers and storage from the Internet through a secure virtual private network (VPN) connection. Unlike PaaS, this model does not provide any of the core building blocks or components for developing applications.

An IaaS approach to infrastructure can offer:

• Faster responses to changing business conditions or customer needs, enabled by rapid system provisioning and rapid scalability, without the long-term lock-in of hardware purchases
• Productivity increases resulting from the ability to access your applications and data anywhere/anytime and the reliability that comes from a distributed computing model
• Reduced capital outlay for hardware acquisition, maintenance, data center real estate, and power and cooling when using a pay-for-use (public cloud) model

PaaS - Core Components for Developing and Hosting Applications from the Cloud
The PaaS delivery models enable you to use a vendor to provide hardware and software - as well as provisioning and hosting capabilities - needed to develop, deliver and maintain applications and other resources in the cloud.

A PaaS approach can address key application management and development issues, offering benefits such as:

• Low barriers to entry by doing away with the need to make upfront investments in new hardware and software resources
• Innovation without hassle since the PaaS model frees your IT staff to collaboratively develop and test applications outside the constraints of your in-house infrastructure
• Greater flexibility since PaaS enables automatic, scalable application deployment and greatly simplifies patch and update management

SaaS - Applications Delivered from the Cloud
SaaS means delivering a software application from the cloud, often to users' browsers as a Web-based application. You may already use SaaS applications without even knowing it. For example, Salesforce Service Cloud helps you connect with customers faster and become more responsive.

SaaS offerings save you the costs and headaches of deploying new applications in your own environment, whether on premise, or on a PaaS or IaaS environment. SaaS applications are built upon and delivered from the application vendor's own PaaS and IaaS environments. For example, Salesforce.com's Sales Cloud SaaS application is built upon their Force.com PaaS environment. With SaaS you pay only for the resources you use on a subscription model. You can start small, with a minimal investment, yet be able to scale up (or, later, back down) as your needs change. You can even integrate your SaaS applications to your on-premise applications or with other cloud applications to give users a seamless experience.

SaaS enables growing businesses to get access to applications that were traditionally only affordable by larger enterprises. SaaS can be seen as an equalizer that levels the playing field with larger competitors, without incurring large investments in technology and resources.

Bottom Line
The fact is, there is no special formula for moving to the cloud. Ask yourself if moving to the cloud makes sense for you. Does it map well to your business processes? Does it give you a competitive advantage? Are your industry peers successfully moving to the cloud?

It's important to define these items to ensure you're using a solution that's customized to your business needs. With a better understanding of cloud computing, you are better prepared to take the next step in your cloud journey.