When my friend who works at an electronics retail store emphatically affirmed he knew what cloud computing was, it made me both nervous and excited.

Cloud computing is becoming a ubiquitous concept. It has mass-market implications for the technology industry, and it is advancing at speeds rarely seen with any major technological evolution.

As a business leader, do you know why cloud computing is important to you? What parts of your business should you be migrating to the cloud? Do you know what you don't know about cloud computing?

First, cloud computing is about reducing complexity. In the cloud, most of the technology you had to deal with in the past now remains behind the scenes. What used to be command lines and code is, in many cases, replaced with a lot of pointing and clicking.

Second, cloud computing is about flexibility. With cloud-based solutions, you can add or remove Web server hardware and bandwidth, virtually on demand. For example, you can order more computing "horsepower" to match a cyclical business cycle or a big new marketing promotion, but you don't actually have to purchase or deploy physical servers ... it all happens in the cloud. Also, the software platforms you use in the cloud are often designed to enable nondevelopers to rapidly customize your software's functionality.

Third, cloud computing is about speed. A regional firm recently won a contract in which they were required to have a custom business-management system online and functional in three months, something that easily could have taken them a year or longer using traditional tools. Another customer leveraged cloud-computing tools to completely automate a previously all-manual business. In doing so, the business increased its back-office productivity by 80 percent. They accomplished this in only five weeks with a payback period of not much more.

In the cloud, if you need to acquire servers and connect them to the Internet, this takes minutes. If you need to get your company using an off-the-shelf software application, you can do that in minutes. If you need to build a custom application from scratch, you are looking at days or weeks -- not years.

Time is money. The cloud is about your bottom line. It's about transitioning from large, risky capital expenditures to manageable operating expenditures. And it's about empowering people do a lot more than they could.

Visit the gadget cube for these posts in the next four weeks:
Week 2: Reduced complexity/increased empowerment in the cloud
Week 3: Hardware scaling in the cloud
Week 4: Software flexibility in the cloud
Week 5: Time and Cost Reductions in the cloud

Originally posted at The Central Penn Business Journal Gadget Cube