Cloud computing draws its name from the cloud symbol used to depict the Internet in network diagrams. Besides being an easy way to render the complex infrastructure that comprises the Internet, the cloud is an appropriate metaphor. Like the Internet, clouds have no clear boundaries or borders and are constantly shifting and changing.

The basic idea behind cloud computing is to harness the massively scalable Internet infrastructure to deliver data, software and services to multiple customers. For example, compute facilities provide users with processing power without buying computers. Storage services provide a way to store data without having to continually grow storage capacity. Software-as-a-Service provides access to applications without buying software. These represent only a few of the options for delivering all kinds of complex capabilities to both businesses and individuals.

Cloud computing promises to lower costs, reduce data center complexity and speed time to market at a time when building or installing applications or IT infrastructure no longer provides any real competitive advantage. To reap all these benefits, however, organizations must do their homework and make good decisions up front. An excellent starting point is a cloud readiness assessment.

A readiness assessment can help organizations determine what applications can most effectively be shifted to a cloud platform. After all, the cloud isn’t a silver bullet — it may not be the most suitable choice for certain applications, particularly those with heavy performance, bandwidth and transaction processing requirements.

Here are five considerations for companies looking at cloud computing solutions:

Availability. The first step is to identify which applications must be highly available, which can accept downtime and how much downtime is acceptable. You also need to consider the business risk if data is unavailable. Applications that need to be highly available may be good candidates for the cloud, but it’s important to choose an enterprise-class cloud service that offers appropriate uptime guarantees. Such a service may provide greater availability than can be achieved in-house, and can aid disaster recovery/business continuity planning by creating an “always-on” service in the cloud.

Performance. As with a more traditional hosting model, it’s important to understand how workload demands will impact the infrastructure and what the potential bottlenecks are. Perform your own testing to evaluate how well the cloud environment can support your most demanding workloads.

Security. Security remains a key concern for businesses moving to the cloud. While cloud computing can actually improve security, it’s important to consider how the loss of control over their sensitive data affects security standards. Is the service provider’s shared environment segmented to prevent customer overlap? Is the cloud infrastructure ecure?

Compliance. Compliance goes hand in hand with security. Organizations in regulated industries need to understand where their data will reside, who will interact with it and how. They also need to understand which areas of compliance the service provider controls and how to audit against the standards and regulations to which they need to adhere.

Flexibility.  Will a “generic” cloud service meet your needs or is a more customized solution required? Before selecting a cloud-based solution, it’s important to consider how it will impact business processes and integration with in-house applications.

Bottom line: Cloud computing can deliver real business benefits but you need to understand how cloud services will impact your business processes. A cloud readiness assessment can help you make sound decisions about the role of cloud computing in your IT environment.