Cloud computing and cloud hosting practices have been around for some time, probably longer than you think. Long enough, in fact, to gain significant awareness and pique the interest of anyone starting, or growing a business. “I must have everything ‘in the cloud’” these entrepreneurs say!  While the definition and clear-cut use case for cloud hosting remains elusive, the promise of cost savings, “fair” usage based billing, and unlimited scalability has startups love struck.

Before you stroll thru the proverbial tunnel, do the modern dating ritual – a background check. Many companies (large and small) have come before you, and startups that are entertaining a cloud hosting solution today have many resources and case studies to help answer the question, “Is cloud hosting the right solution for my business?”

The realities both positive and negative are coming to light, and we’ve pulled together a list of evaluation criteria (pros and cons if you will) to help you:

Pros

Businesses that have flipped head over heals for cloud hosting enjoy it because it offers the following:

Simplicity
Entrepreneurs have enough on their plates as it is. Solutions that can simplify any part of their business operations are a welcome addition. Hosting in the cloud can streamline and simplify actions such as “pass thru” billing to end-users. In some cases, cloud hosting providers can even bill your customers directly.

Cost Effectiveness
Cloud hosting has a low cost of entry. There are no capital expenses to bear and it doesn’t require “IT-like” personnel to join you staff. Again, for a startup that isn’t depending on their site as a main business conduit this is a very inexpensive way to get going.

Moves as quickly as your business
Cloud hosting is extremely fast to implement in most cases and claims to be infinitely scalable. It also supports multi-platform development environments.

Doesn’t have what you don’t need
If you’re a start-up with no critical data on your Web site or applications, the security level of cloud hosting may be plenty.

Cons

If you’re planning to run most of your business through your site, expect (or already experience) a large amount of traffic, and house critical data there (such as E-commerce) then cloud hosting may be an unsafe bet. Here’s why:

Performance
In a cloud environment, all sites are competing for the hardware resources. If multiple Web sites spike coincidentally, it can result in everyone slowing down. Additionally, with cloud you never really know how much performance is available to you. The claim is that you get unlimited scalability, however many of the clouds’ early adopters are finding that is not the case as their Web site resource requirements grow and over-exceed this elusive capacity.

Security
Cloud hosting is simply not the most secure environment. It just isn’t there yet. If you’re looking to achieve and maintain data privacy requirements for PCI compliance, HIPAA compliance, SOX, E-commerce, and so on, then cloud hosting is not the solution for you.

Redundancy
One of the misconceptions of cloud hosting is that it’s hosted “in the sky and not in a datacenter,” which is not true. Cloud hosting resides in a single datacenter. Recently a large hosting provider’s datacenter went down leaving a lot of cloud hosted Web sites in the dark. The site owners had a huge reality check and quickly learned of the single-points of failure within a cloud environment.

Cost
The cloud gives businesses a hands-free method to scale their hosting, however some problems can arise that are financially surprising. For starters, automatic scaling can make people extremely lazy. If you’re not paying attention to your usage, you just might get a huge surprise on your next bill. One thing that’s a rising concern is hackers running up their victims’ hosting bills. One method that’s being used is a simple low-level DDoS attack (Distributed Denial of Service), which won’t take your site down but will keep your server very busy. Since you pay for usage with cloud hosting, your costs can spin wildly out of control. So if you’re using cloud hosting, make sure to pay daily attention to your usage.

While cloud hosting may provide some distinct benefits and cost advantages for start-ups or non-critical Web sites, it isn’t well suited for mission-critical Web sites and SaaS applications. In particular, you cannot achieve compliance mandates of HIPAA, PCI, SOX, etc. when storing data in and serving applications from “the cloud.”

So if you’ve been drawn in by the low cost of entry and fast implementation of the cloud, heed the warning that every rose has it’s thorn… even soft, fluffy, cloud hosting ones.

• Cloud computing is on-demand access to virtualized IT resources that are housed outside of your own data center, shared by others, simple to use, paid for via subscription and accessed over the Web.

• Cloud computing is a style of computing in which dynamically scalable and often virtualized resources are provided as a service over the Internet. Users need not have knowledge of, expertise in, or control over the technology infrastructure in the “cloud.”

Despite any confusion about the role cloud computing should play within IT organizations and how the solution will be carried out, it continues to gain momentum. In fact, 99% of the respondents to F5′s survey are actively discussing or implementing a cloud solution within their organization and more than half (66%) of the participants have budgets set aside for cloud solutions.

IT Managers have high expectations for what can be “offloaded” to cloud environments . 75% of the survey respondents believe PaaS (Platform-as-a-Service) is part of the cloud. 66% said Iaas (Infrastructure-as-a-Service) should be included. Interestingly, the more “popular” buzzword SaaS (Software-as-a-Service) registered as a cloud component with only 60% of the participants.

The core, organization-wide drivers behind the need for a public cloud are slightly different from the requirements reported by private cloud users.

• Public Cloud – #1 efficiency, #2 reducing capital costs, #3 easing staffing issues
• Private Cloud – #1 reducing capital costs, #2 agility, #3 easing staffing issues

Not surprisingly however, most IT Managers want to examine the critical technology behind the cloud infrastructure. The main concerns they want addressed before adopting could computing solutions are Access Control, Network Security, and Server and Storage Virtualization.