Interest in cloud computing is certainly gaining momentum in the overall market and a turn to any technology news and the concept cannot be missed. In a recent Metro Corp Counsel article, this trend was examined.

The amount of interest and coverage surrounding cloud computing has been largely driven by the significant benefits of using cloud-based software applications versus buying, installing and maintaining on-premise solutions.

One interesting trend in media coverage surrounding cloud computing is the constant referral to the platform as a homogenous concept, yet it is virtually the opposite. It is important to note that there is really no such thing as the cloud and this metaphor is merely used in place of the Internet.

The National Institute of Standards and technology refers to cloud computing as a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources that can be rapidly provisioned and released with minimal management effort or interaction from the service provider.

In truth, there are many different types of clouds for a number of different purposes. Consider consumers who will use online banking, Internet retailing and online airline reservations. Businesses, on the other hand, will consume very different cloud-based business applications to achieve their goals.

A few cloud computing situations have snagged headlines as of late as they involve high-profile players. One in particular involved Eli Lilly and AWS. Eli Lilly pulled back from AWS as the two players were unable to come to an agreement on legal liability and indemnity issues. Amazon wanted to go with the standard agreement and Eli Lilly felt the larger and more sensitive projects deserved customized agreements.

The lesson here is that the company needs to truly understand what it is willing to sacrifice in working with certain vendors in the cloud. Not all providers will be as stubborn as Amazon and not all companies will require the sensitivity in negotiations as Eli Lilly. Understanding what needs must be met is essential before entering any type of cloud computing contract.

This identification process is worth it as cloud computing does deliver specific benefits when compared with on-premise solutions. Cloud computing offers scalability, cost efficiency and collaboration for any company, no matter their industry, needs or security issues in relation to the projects involved in the cloud.

It is also important for a company to determine whether or not they want to operate in a public cloud or prefer the inherent security in the private cloud. Both can deliver expected benefits, with different comfort levels. Understanding risk tolerance is the first step to a successful cloud computing launch.