Cloud computing is a term that describes a significant change in the way organisations procure, manage and use IT. It represents a shift away from the concept of building and owning IT as an asset and moving towards a model where applications are hosted by a third party and paid for only when needed.

For a number of years after the term was coined, it remained conceptual, only appearing in the real world as small-pilots. The model has been proven to work now and many organisations are starting to consider it seriously as a method for delivering core business-critical applications into the workplace.

Cloud computing still suffers from a lack of clear definition and practitioners can mean a number of things when they use the term. While some are happy to include hosted IT that is still on the premises, third-party dedicated systems and third-party systems shared with other customers all under the Cloud Umbrella, others see many flavours of cloud service as merely old established models of IT procurement dressed up in the clothes of the new buzz-word to make them more sellable.

The hype around cloud services that have driven some suppliers to rebrand their wares as such has grown because the potential benefits of using hosted services on a pay-per-use basis are great.

Even non-IT executives have become familiar with the term, because they can see some of the benefits. Finance directors will be attracted by the possibility of moving IT costs from capital expenditure to operational expenditure that can be planned for with more certainty.

Operations officers like the utility model of IT use that brings its management in line with other infrastructure services.

Supply chain directors may like the fact that applications can be accessed on the move, through the internet.

Sales and marketing directors will be enthusiastic about the possibility of choosing their own tailored applications through the service.

And CEOs will warm to the opportunities for speedy growth, where in-house deployments have necessarily held the organisation’s expansion back, while systems are properly bedded in.

As a consequence, IT bosses may be under considerable pressure to migrate to a cloud model.

Many CIOs have gone for a staged approach by migrating important but non-critical systems to a hosting provider with a good reputation. They can assess the impact of doing so without exposing the business to too much risk in that way.

Many have switched to Google’s suite of web-delivered desktop apps, for instance, choosing to keep their transaction-processing systems in-house for the time being.

Others have opted to put business-critical systems in the hands of a third party, but with the provision that the systems involved are dedicated to their exclusive use.

It’s important to be reassured that the organisation’s data is secure and access to it is reliable, so it may be a little while yet before fully shared, hosted models are widely used.

It’s right that CIOs are diligent about which services they procure and how they extricate themselves from existing supplier relationships when considering a cloud services model.

For the IT department itself, cloud computing means a shift in the skills pool within it, from IT management to supplier and stakeholder management.

It offers the chance to free in-house IT teams from the mundane housekeeping aspect of their work and gives them more time to focus on ways to use technology to transform the business.