Designed to offer a higher level of scalability, resilience, availability and cost savings that other forms of computing cannot, cloud computing is becoming an increasingly popular way to obtain computing capabilities and services without a substantial capital outlay. But like any business transaction, it is vital to have a solid understanding of the business and legal risks and rewards associated with it prior to entering into any contract arrangement.

What Is Cloud Computing and What Are Its Benefits?

The “evolving paradigm” of cloud computing, as recently defined by The National Institute of Standards in Technology is “a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.” Cloud computing is designed to offer a level of scalability, resilience, availability and cost savings that other forms of computing cannot. For example, cloud computing provides unlimited capacity and protection against technology obsolescence, as well as access on demand from anywhere at any time. These features and other key characteristics of cloud computing minimize or even eliminate the need for a significant capital outlay to acquire infrastructure or on-site software applications and in-house IT resources by providing on-demand self-service, broad network access, resource pooling, rapid elasticity and “metered” service. Put simply, cloud computing is a “pay as you go” model of computing.