CLOUD computing provides business services on demand via a secure online environment, referred to as the 'cloud'. Customers enjoy services such as hosted e-mail, Web publishing, office tools and HR applications on a subscription basis, without the need to install software, buy licences or manage ICT infrastructure.

In challenging economic times, it is imperative that businesses focus their limited resources and capital on revenue-generating activity. And increasingly, they are turning to cloud computing to avoid high upfront investments in infrastructure and maintenance and upgrade costs.

According to an August 2008 Springboard Research paper - Software-as-a-Service in Apac: The Momentum Continues - the Asia-Pacific cloud computing services is expected to register a compound annual growth rate of around 60 per cent in 2011.

Bill Chang, SingTel's executive vice-president for business group, notes: 'Cloud computing allows businesses to improve their productivity, yet cut their ICT costs by up to 90 per cent.'

What is cloud computing?

Traditionally, companies have had to buy software packages and licences by paying a one-time fee. Software support and updates are provided by the vendor or developer at an additional cost from time to time.

Cloud computing, on the other hand, does not require licences. Instead of paying a one-time fee, companies pay only a low monthly subscription to access and use the software.

There is also the flexibility to increase or decrease the number of users depending on business needs. In addition, the software is not downloaded and stored on company computers. Users can access the software any time, anywhere - as long as there is a broadband Internet connection.

The benefits of cloud computing are:

• No upfront hardware/software costs
• Pay per user, scalable according to business growth
• Fast to implement, low risk
• No upgrade and maintenance costs, so no need for specially trained IT personnel to handle maintenance, monitoring and software updates
• Increase productivity with better business process
• Direct resources to focus on core business
• Only low recurring monthly subscription fees
• Access any time, anywhere (24/7)
• No need for large storage, as software or data are not stored on computer

In other words, companies can potentially enjoy higher productivity at a lower cost with cloud computing. Virtualisation technologies can also allow users to pool disparate physical computing resources, such as servers and data storage, so they appear as one in a virtual environment. This simplifies and optimises the deployment and administration of computing resources.

Mr Chang says: 'Cloud computing is gaining momentum globally as broadband and smart devices become more pervasive and affordable, and virtualisation technologies mature. We expect this market to grow even faster with the launch of Singapore's ultra-fast Next Generation National Broadband Network in 2012.'

This article was contributed by SingTel, one of the partners of Emerging Enterprise 2010

This article was first published in The Business Times.