A Few New IT Acronyms Business Owners Need to Know

My 17 year old step son, Chris (high school senior) started a part-time job in an established, well-run, forward thinking Austin software company. My step-son proudly considers himself an IT geek and has developed some impressive knowledge both in high school classes and by self learning.

My step-son’s new employer told us he hired Chris because he had so much knowledge of the digital generation and will have a much easier time making the quantum leaps from traditional computing to the models of the future than the average entry level network operations operator. Being a 50 year old with limited basic knowledge of Microsoft, Google products and the internet, I wasn’t sure what he was talking about. My step-son understands much of the dynamically changing IT landscape and how they will affect business. Even though mid-sized businesses are the first to embrace these new ways of computing, small businesses are increasingly seeing the cost and performance benefits of using them too.

In order to help financial decision makers like me who are “age challenged,” I have assembled a list of terms that apply to the coming changes in computing.

Cloud Computing. This is a term many of us can understand. In the early days of the Internet, a big puffy cloud was used in schematic drawings to depict “cyber-space.” In the context of business, cloud computing means that enterprise software and hardware don’t necessarily reside on the computer under your desk or even on the servers in your computer room. For example, because of increasing bandwidth and speed, accounting software and company books can be located anywhere. Owners and managers not directly overseeing people can be anywhere they can connect to the internet. Cloud computing offers companies flexibility and potential cost savings. Cloud computing also offers a company or organization the ability to quickly recover from a catastrophe that may affect the location where data servers are stored. Currently the 800 lb gorilla in cloud computing is Amazon Web Services, a subsidiary of Amazon.com.

SaaS stands for software as a service. While many of us know of applications where SaaS applies, we haven’t necessarily heard that acronym before. The concept is simple. Instead of making a capital purchase of software and hardware and spending additional money to implement it, we simply use an application that is Internet based (in the cloud) and pay on a per user, per month basis. Examples of popular SaaS oriented companies are: Salesforce.com, Google Apps, NetSuite and Intuit. There are many hundreds of well-known companies that are quickly and quietly developing SaaS applications.

IaaS stands for infrastructure as a service. Here is where Amazon and a few other companies fit in the new world order of IT. According to SaaSBlogs, a blog that demystifies the disruptive nature of IT’s new world order, “IaaS’ power lies in its massive on-the-fly flexibility and configurability. It can be equated to owning a magic wand that could conjure up a variety of network and server resources in zero time and occupying zero space.” Simply put IaaS can be implemented fast and with minimal up front costs.

I2 stands for Internet version 2. The Internet was originally created to share data and communications between research universities and the U.S. Department of Defense. It wasn’t until the late 1980s that the Internet became commercial. While the “plain” Internet has evolved significantly, Universities and the Department of Defense have been quietly designing and building out a “turbo” Internet over the past decade named I2. Currently I2 is being used by researchers, scientists and defense contractors to move massive amounts of data at extremely fast speeds all over the world. A map shows that I2 still has a small U.S. buildout today. Someday I2 is expected to replace the current Internet and that will open doors for businesses to have lightning fast, massive bandwidth, and extremely high reliability.

PVC stands for private virtual cloud. Companies that provide highly secure, highly reliable cloud computing can provide a secure private virtual cloud for their customers that require high levels of security. Right now, a small, multi-location company can afford to have its own private virtual cloud which will dramatically increase efficiencies and reduce operations costs.

Bill Gates’ book, Business at the Speed of Thought written in 2000, predicted that Microsoft could be put out of business by some of the technology or company that was to be developed in this decade. He predicted that the company or companies that developed the technology to “knock his company off,” would not have been started at the time his book was written. Clearly we are on the cusp of some very important disruptive changes in the way information is handled and software is provided. Baby boomer business owners and managers should be listening more to their digital teenagers and grandchildren who may have some of the smartest business ideas yet to come.