Infrastructure-as-a-Service (IaaS) is often referred to as Utility Computing because it offers a “pay-based-on-what-you-use” model for data storage.  Via IaaS, Cloud Computing enables companies to only pay for the storage capacity that they need and use.  IaaS is, in essence, an on-demand virtual hosting environment.

IaaS is used to deploy Web service, VM- or SOA-based applications to the Internet. Examples of vendors using IaaS are: Amazon, AT&T, GoGrid (ServePath), Rackspace, Savvis, Terremark and Verizon. Estimated cost to implement IaaS starts at $0.10 per CPU hour.

As Forrester Analysts, Jennifer Bélissent and James Staten, state in a recent whitepaper, “despite the overwhelming buzz of cloud computing, few firms worldwide have adopted a pay-per-use, self-service model of computing, based on virtual service at a public service provider.” Adoption varies from region to region; IaaS clouds are local and so are their implications.

Forrester’s data shows that IaaS adoption is slower in North America and Western Europe than in other emerging markets such as Latin America and Asia.  Data security and privacy concerns are certainly top of mind for IT professionals in North America considering cloud computing as an option.

The physical location of the cloud data center is important because of data protection regimes.  Customers need to understand where their data will be transferred, processed and stored.  According to Forrester, “Rather than merely claiming that data is in the cloud, tech vendors must be prepared to identify the location of data and provide location guarantees (at a premium) if required. The implications of local legislation necessitate a greater degree of transparency than that currently offered by some cloud providers.”