What is Cloud Computing?

Efficiencies of scale

Innovation in the computing industry continues to provide new opportunities for society, from a “PC in every home” to “cloud computing.” This recent, nebulous image refers to the use of computing power that is located elsewhere, in “the cloud” of remote networks. The computing power is supplied from large datacenters in the network, which can connect with and process data for all types of devices.

Consumers have used online services to manage and store data, like Hotmail for email or Flickr for photos. On the other hand, businesses and governments have preferred to keep and control their data in IT systems that they own and manage directly, using the Internet for communication but not for storage and processing of data. Usually this means that such organizations have hundreds, even thousands, of server computers that they have purchased and need to maintain.

Cloud-based services are now more powerful and reliable for such users, and they reduce the need to purchase and maintain hardware and software. Large datacenters offer economies of scale, drastically lowering the per server cost of computing power, with the flexibility to pay only for what you use. Like electricity, you don’t need to own the generators; you can plug in and pay as you go. A smaller number of large-scale datacenters are far more efficient, in terms of costeffectiveness as well as energy usage, than large numbers of smaller in-house IT systems.

Responsibilities and Concerns

While the economics of cloud computing are compelling, every survey around cloud computing also reveals that users are concerned about privacy and security. A 2010 survey by the World Economic Forum found that 90 percent of respondents in Europe see privacy as a “very serious” constraint on adopting cloud computing³. As people and organizations around the world move information from desktops to their mobile devices and into the cloud, they want to know that their data will remain safe and protected.

Addressing privacy and security concerns in the cloud is industry’s responsibility in the first instance. Microsoft fully embraces this responsibility. We are engaging with our customers to help them understand their rights and make informed choices when using cloud computing, and for consumer services we have proactively adopted measures like Tracking Protection in our browser to enable users to filter out content on a web page that may have an impact on user privacy. Governments also have a critical role to play to promote privacy and security in cloud computing, including updating legal frameworks to make clear whose laws apply – and how they apply – to data in the cloud and avoiding overly restrictive laws on the movement of data across borders. A proactive but balanced approach will best help spur innovation and drive resulting investment, job opportunities, and other benefits.

“Microsoft is totally committed to maintaining high standards of privacy, security and interoperability in the cloud and across our business.“
Jean-Philippe Courtois,
President of Microsoft International

Privacy by design

Privacy by Design at Microsoft means that we engineer privacy into our products and online services at the outset of development. We review all products and services to identify privacy issues at an early stage and help product groups follow Microsoft privacy policies and standards. We also encourage the continued consideration of privacy and data security throughout the project lifecycle, including following the release of the product or service onto the market.