The next big trend sounds nebulous, but it’s not so fuzzy when you view the value proposition from the perspective of IT professionals

Cloud computing is all the rage. “It’s become the phrase du jour,” says Gartner senior analyst Ben Pring, echoing many of his peers. The problem is that (as with Web 2.0) everyone seems to have a different definition.

As a metaphor for the Internet, “the cloud” is a familiar cliché, but when combined with “computing,” the meaning gets bigger and fuzzier. Some analysts and vendors define cloud computing narrowly as an updated version of utility computing: basically virtual servers available over the Internet. Others go very broad, arguing anything you consume outside the firewall is “in the cloud,” including conventional outsourcing.

Cloud computing comes into focus only when you think about what IT always needs: a way to increase capacity or add capabilities on the fly without investing in new infrastructure, training new personnel, or licensing new software. Cloud computing encompasses any subscription-based or pay-per-use service that, in real time over the Internet, extends IT’s existing capabilities.

Cloud computing is at an early stage, with a motley crew of providers large and small delivering a slew of cloud-based services, from full-blown applications to storage services to spam filtering. Yes, utility-style infrastructure providers are part of the mix, but so are SaaS (software as a service) providers such as Today, for the most part, IT must plug into cloud-based services individually, but cloud computing aggregators and integrators are already emerging.

InfoWorld talked to dozens of vendors, analysts, and IT customers to tease out the various components of cloud computing. Based on those discussions, here’s a rough breakdown of what cloud computing is all about:

1. SaaS
This type of cloud computing delivers a single application through the browser to thousands of customers using a multitenant architecture. On the customer side, it means no upfront investment in servers or software licensing; on the provider side, with just one app to maintain, costs are low compared to conventional hosting. is by far the best-known example among enterprise applications, but SaaS is also common for HR apps and has even worked its way up the food chain to ERP, with players such as Workday. And who could have predicted the sudden rise of SaaS “desktop” applications, such as Google Apps and Zoho Office?

Cloud computing is a general term for anything that involves delivering hosted services over the Internet. These services are broadly divided into three categories: Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS). The name cloud computing was inspired by the cloud symbol that’s often used to represent the Internet in flow charts and diagrams.

A cloud service has three distinct characteristics that differentiate it from traditional hosting. It is sold on demand, typically by the minute or the hour; it is elastic — a user can have as much or as little of a service as they want at any given time; and the service is fully managed by the provider (the consumer needs nothing but a personal computer and Internet access). Significant innovations in virtualization and distributed computing, as well as improved access to high-speed Internet and a weak economy, have accelerated interest in cloud computing.

A cloud can be private or public. A public cloud sells services to anyone on the Internet. (Currently, Amazon Web Services is the largest public cloud provider.) A private cloud is a proprietary network or a data center that supplies hosted services to a limited number of people. When a service provider uses public cloud resources to create their private cloud, the result is called a virtual private cloud. Private or public, the goal of cloud computing is to provide easy, scalable access to computing resources and IT services.

Infrastructure-as-a-Service like Amazon Web Services provides virtual server instances with unique IP addresses and blocks of storage on demand. Customers use the provider’s application program interface (API) to start, stop, access and configure their virtual servers and storage. In the enterprise, cloud computing allows a company to pay for only as much capacity as is needed, and bring more online as soon as required. Because this pay-for-what-you-use model resembles the way electricity, fuel and water are consumed, it’s sometimes referred to as utility computing.

Platform-as-a-service in the cloud is defined as a set of software and product development tools hosted on the provider’s infrastructure. Developers create applications on the provider’s platform over the Internet. PaaS providers may use APIs, website portals or gateway software installed on the customer’s computer., (an outgrowth of and GoogleApps are examples of PaaS. Developers need to know that currently, there are not standards for interoperability or data portability in the cloud. Some providers will not allow software created by their customers to be moved off the provider’s platform.

In the software-as-a-service cloud model, the vendor supplies the hardware infrastructure, the software product and interacts with the user through a front-end portal. SaaS is a very broad market. Services can be anything from Web-based email to inventory control and database processing. Because the service provider hosts both the application and the data, the end user is free to use the service from anywhere.