Let's first start with a look at another technology that developed over the years and enabled efficiency, agility, and many other benefits namely electricity.

In the early days of the industry in U.S.A., at the end of the 18th century, each factory had its own power plant. Factories were located close to rivers so electricity could be generated from the flowing water. A waterwheel converted the power of moving water to a rotation, which drove a power generator. This worked but it was a fragile system of cables running everywhere and it was hardly scalable.

Thomas Edison decided to start Edison Illuminating Company and build an electricity generation station in New York City. That was realized in 1882. His thoughts were based on the principle that if enough factories used electricity generated by his power plant, the costs of electricity would be much lower than on-premises, self-made electricity. Also, the available capacity would be unlimited. There was however one issue to solve. At that time, electricity was only available as direct current. The problem with direct current was that it could be economically transported only within one and a half miles (about 2.4 km) from the generating station. Nikola Tesla, a brilliant scientist who was working for Edison, got into an argument with him. Tesla eventually developed a way to generate alternate current (AC). AC could be transported over very long distances using thinner cables. Tesla later sold his patent on AC to George Westinghouse. Soon, a war of currents started in the United States between Edison and Westinghouse. In the end AC won, which finally resulted in a victory for AC and enabled a widespread usage of power plants. Electricity became a utility. Westinghouse is currently one of world's largest companies in the electrotechnical business. General Electric Company started in 1892 as a merger between Thomson-Houston and Edison General Electric.

The development of generating and consuming electricity is very similar to the way we consume computing services now. Before the Internet, each company had its own IT infrastructure and locally installed applications. In the first half of the 90s, more and more personal computers were used and the first Internet browser was launched. I will never forget the place and time when I first saw the browser Netscape being demonstrated by a co-worker. In July 1996, Microsoft launched Hotmail—the first free, web-based e-mail service. This could be considered the first-ever cloud service.

So, here we are in 2015—but what is cloud? Nowadays, cloud is used by about every vendor in IT. They all offer cloud services, if we have to believe the sales pitches. However, what is the cloud or cloud computing?

I remember the first time I heard about the cloud was during VMworld in Cannes. That was in 2009. VMware was looking for a way to make IT services more consumable for businesses. However, a couple of years before 2009, the cloud was already available.

The original provider of large-scale cloud computing targeted at organizations was Amazon. Amazon started as a book-selling company. Selling of books is very much driven by peaks. The highest peak in number of book sales is in the weeks before Christmas and New Year. To be able to cope with the demand, Amazon had to invest in large computing capacity just to cover the peaks of a couple of weeks. The rest of the year, a major part of the IT infrastructure was not used. Then, someone working at Amazon had a smart idea: let's rent out our excess capacity to others. This is how Amazon Web Services (AWS) started in 2006.

Nowadays, each and every IT vendor lets their customers believe that they sell some sort of cloud-compatible solution. Pretending something is the cloud while in fact it is not is called cloud washing.

A virtual infrastructure where an IT professional needs to manually provision a new virtual machine is not a cloud. A hosted, single-tenant Exchange Server infrastructure running in a remote data center with fixed costs per month is also not cloud.

Many definitions of cloud computing are available. The definition given by National Institute of Standards and Technology (NIST) is one of the best:

While this describes the characteristics of the cloud, it does not describe the value. What is the driving force for organizations to use cloud computing?

For me, the cloud is not a new technology, but a service. It enables a much more efficient consumption of IT services than using traditional IT, which still has a lot of human intervention, limited resources, strictly IT control, slow delivery, and focus on delivering a platform (keeping the lights on) instead of delivering services that enable the businesses to reach their goals.

Cloud is for IT consumption what electricity is for a household appliance. Just plug it in and you can use it. There is no need to call the electrician to have a new wall outlet built into the house when you buy a new appliance.