Cloud computing is arguably the hottest topic in the IT field. In fact, many observers are saying the technology is right in time for the bubble economy that is currently upon us. When considering the cloud’s highly flexible and scalable nature, this isn’t surprising at all. Cloud computing gives companies a viable alternative to their in-house applications and infrastructures. It doesn’t call for any costly upfront investments on a data center or internal IT staff, no lengthy service contracts, and you can scale up or down based on your needs. In such hard times when businesses of all sizes are holding onto their wallets tighter than ever, any pay-as-you-go model comes out looking like an ideal solution.

The current economic downturn is increasingly leading businesses under the umbrella of cloud computing services. The cost efficiency and ease of use is just too attractive for many organizations to pass up. Billy Marshall, co-founder for startup rPath, believes that the cloud will help businesses of all sizes thrive during the recession. Specializing in the creation and maintenance of applications and virtual appliances, Marshall revealed that the cloud worked wonders at helping the company cut costs off its training courses to the tune of nearly $3,600. “We set our training classes up in the Amazon Cloud where we’re able to give each student their own environment. For a day it costs $2.40 for each student and totals about $400 per year verses $4,000.” Marshall stressed that if you can’t muster up hundreds of thousands of dollars on new server hardware and infrastructure, putting your applications in the cloud is the next best option.

One of the greatest benefits of cloud computing is that it knows no geographical boundaries as the technology is being rapidly deployed in more regions around the world. Kennedys, an insurance firm based in the U.K., reports that it is leveraging the cloud to save more than £350,000 a year. These significant cost savings were obtained by virtually eliminating expenses for maintaining software applications, dramatically reducing hardware requirements, lowering power consumption and ultimately, shelling out no capital expenditure on a new infrastructure.

Ian Readman, chief executive at Intercept IT, believes that the reason we are noticing this trend across the world is because the cloud can not only lower costs, but also improve overall reliability and the end-user experience. “For larger firms this approach can be used to centralize, virtualize and optimize their own corporate data centers, or SMEs may look to outsource their complete IT to a specialist virtual IT provider,” he says. Readman also has a strong belief that the cloud is particularly useful for mobile businesses that frequently need to access corporate data over the Internet.

In a recent online audio interview, economist Ludwig Siegel, shares his thoughts on why the current economic climate will lead more businesses to embrace the concept of cloud computing. “One of the big promises of cloud computing is to do more with less.” This statement is attributed by the fact that businesses are no longer tied down to their server rooms. All the cloud requires is a capable client device and Internet access, enabling workers and even the entire company to function as a mobile entity. Echoing all the sentiments that tell us the cloud is here to stay, Siegel also remarks, “It follows naturally from the combination of ever cheaper and more powerful processors with ever faster and more ubiquitous networks. As a result, data centers are becoming factories for computing services on an industrial scale.”

The cloud is certainly here for the long haul, but despite all the hype, this computing technology has yet to be embraced by larger companies. Right now, startups and smaller businesses stand to reap the most benefits as the cloud allows them to leverage the same infrastructure as a large enterprise. You also have to consider that the current economic strife that has seen increased credit restrictions will prevent many would-be SMBs from starting new businesses, thus resulting in less demand for cloud solutions. This can be combined with the likelihood that large companies thriving with their existing infrastructures will stick to the proverbial script instead of introducing new concerns and complexities the cloud brings during a recession. Benefits aside, revamping IT strategies and worrying about unnecessary security threats and regulatory compliance are issues some companies just aren’t ready for.