Once it was realised that there was the wonderful concept known as electricity with one of the initial uses being a light bulb to light up the night, there needed to be a way to generate electricity.

Sure, you could have your own coal-fired power station at your house that you could provide fuel for and run some electrical cabling in your house to use but it was quite obvious that this was not going to be an efficient method of producing electricity.

Thomas Edison devised the first commercially viable incandescent light bulb in 1879 but I believe his real genius was the fact that he developed the first large scale electrical utility when he organised investors to back six jumbo dynamos that were housed at Pearl Street Station in lower Manhattan.

In 1882, Edison had 85 customers with a total of 400 light bulbs. He owned the electrical network, he generated the electricity and sold the light bulbs as well.

He had completely wrapped up a vertical market segment! Edison’s genius was that he realised that it was inefficient for each location that wanted a light bulb to also have to generate its own electricity. By connecting to his electrical network, the electricity could be generated more efficiently at one central location and that power is then distributed to those who need to use it.

Fast forward 134 years, and we have an incredibly complicated system called the electrical grid that has houses and businesses connected with electrical cabling to a complicated network of transformers and cabling that goes back to centralised locations where large amounts of power are produced for the network.

When we turn on a light in our kitchen, we don’t really think about the power that is produced at a centralised coal-fired power station ‘somewhere else’ which is then delivered to us by this network of cables and transformers. We simply flick the light switch and go about our day.

This electrical example is analogous to our modern cloud computing environment.

We have an incredibly complicated system of interconnected computers around the world that you may have heard of. It is called the Internet. ARPANET adopted the TCP/IP protocol on 1 January 1983 and from there the ‘network of networks’ began to form what is the basis of our modern Internet. If you think of the Internet as the electrical grid, cloud service providers are the equivalent of power generation companies. They generate services on a massive scale so individual users and businesses can choose the functionality they require in much the same way that we choose to use power when we flick on a light switch.

While all this may sound largely irrelevant to you, over 90 per cent of computer users in the world use at least one form of cloud computing.

Think of e-mail. If I go back 20 years in my IT history, I can remember selling clients Microsoft Exchange Servers for their e-mail needs. It was a massive investment. The physical server required along with the software and setup was easily $10,000 – maybe more.

For a small business of just a few employees, it was incredibly expensive to have e-mail in their business. Fast forward to today and you can have basic cloud e-mail services (Gmail; Hotmail; yahoo; etc.) for free or you can have full-blown modern Exchange e-mail environments for less than $10 per mailbox per month.

Cloud computing is not a binary decision.

Cloud computing is an à la carte menu.

There are a huge number of services available in the cloud. Your decision is simply to choose the items from the menu that you require and pay the appropriate fee.

You also need to trust that your cloud provider is going to continue to deliver on the sales promise. Welcome to the cloud!