Everyone in the IT industry is talking about cloud computing, but there is still confusion about what the cloud is, how it should be used and what problems and challenges it might introduce. This FAQ will answer some of the key questions enterprises are asking about cloud computing.

What is cloud computing?

Gartner defines cloud computing as "a style of computing in which massively scalable IT-related capabilities are provided 'as a service' using Internet technologies to multiple external customers."

Beyond the Gartner definition, clouds are marked by self-service interfaces that let customers acquire resources at any time and get rid of them the instant they are no longer needed.

The cloud is not really a technology by itself. Rather, it is an approach to building IT services that harnesses the rapidly increasing horsepower of servers as well as virtualisation technologies that combine many servers into large computing pools and divide single servers into multiple virtual machines that can be spun up and powered down at will.

How is cloud computing different from utility, on-demand and grid computing?

Cloud by its nature is "on-demand" and includes attributes previously associated with utility and grid models. Grid computing is the ability to harness large collections of independent compute resources to perform large tasks, and utility is metered consumption of IT services, says Kristof Kloeckner, the cloud computing software chief at IBM. The coming together of these attributes is making the cloud today's most "exciting IT delivery paradigm," he says.

Fundamentally, the phrase cloud computing is interchangeable with utility computing, says Nicholas Carr, author of "The Big Switch" and "Does IT Matter?" The word "cloud" doesn't really communicate what cloud computing is, while the word "utility" at least offers a real-worth analogy, he says. "However you want to deal with the semantics, I think grid computing, utility computing and cloud computing are all part of the same trend," Carr says.

Carr is not alone in thinking cloud is not the best word to describe today's transition to Web-based IT delivery models. For the enterprise, cloud computing might best be viewed as a series of "online business services," says IDC analyst Frank Gens.

What is a public cloud?

Naturally, a public cloud is a service that anyone can tap into with a network connection and a credit card. "Public clouds are shared infrastructures with pay-as-you-go economics," explains Forrester analyst James Staten in an April report. "Public clouds are easily accessible, multitenant virtualized infrastructures that are managed via a self-service portal."

What is a private cloud?

A private cloud attempts to mimic the delivery models of public cloud vendors but does so entirely within the firewall for the benefit of an enterprise's users. A private cloud would be highly virtualised, stringing together mass quantities of IT infrastructure into one or a few easily managed logical resource pools.