Whether you call it hosted SharePoint or SharePoint in the cloud, you need to be aware of this growing trend in the SharePoint arena. Here are some FAQs to get you started.

1. What is the cloud?

"The cloud" is a trendy catch phrase that means different things to different people. Wikipedia's basic definition is useful: "Cloud computing is Internet-based computing, whereby shared resources, software, and information are provided to computers and other devices on demand, like the electricity grid." DevPro Connections magazine author Tim Huckaby further demystifies the cloud: “It’s an economic model in its infancy.”

2. What is the payment model?

One model involves paying for what you used (i.e., a utility). Another model involves paying for what you say you’ll use (i.e., a subscription).

3. How is Microsoft involved in hosted SharePoint?

Business Productivity Online Services (BPOS) is a suite of Microsoft products delivered as a subscription service. Within that suite is SharePoint Online. You can get it as a dedicated solution, where you’re the sole party using the service, or you can get it as a multi-tenant solution, where you share the SharePoint service with many other companies.

4. Who is looking at a hosted strategy?

EMC analyst Matthew Roberts says small and medium-sized businesses: “They just don’t have the budget to deploy and manage SharePoint because they might need a developer skill set, an admin skill set—plus there are issues of upkeep, archiving, replication.” Although large companies are exploring the space, he says, many are choosing a hybrid approach, “putting commodity teams to SharePoint Online, but the apps and data associated with them are on-premises.”

BPOS in particular has proven attractive to large organizations, according to Rob Koplowitz, principal analyst in content and collaboration with Forrester Research. He cites large, multi-national pharmaceutical companies that have been early adopters.

5. What are the pros and cons of hosted SharePoint?

For every concern voiced about hosted SharePoint, such as security, someone else can offer a counter argument, from cost savings to easier management to business continuity in the face of outages or disasters. Ultimately it depends, as most decisions in IT do, on the needs and particular situation of an organization. As food for thought, here are what some industry experts told us:

Pros: “I actually like it because it forces you to build very clean applications by the rules,” says Dave Chennault, an MCTS in SharePoint and BPA. (See his article in the November issue of SharePointPro Connections magazine, coming out the last week in October, “POV: IT Pro,”  about hosted SharePoint considerations.) BPOS “is supportable by anyone who knows SharePoint and frees you from custom code and being shackled to the developer who wrote the custom code.”

“A lot of organizations are still fairly early in deployment of SharePoint so you can start with that dynamic of ‘can someone else do this for me?’ In that regard, it might be more simple to move to the cloud,” says Rob Koplowitz.

 Cons: “There are a few reasons why you might not want to use a 'cloud'—some technical (like BPOS does not allow you to easily add third-party applications to your SharePoint environment) but most around governance, security, and compliance,” says Kevin Laahs, a strategist with HP. “You are basically handing over your service to someone else—are you sure they will take as good care of your service as you would yourself?”

Adds Ethan Wilansky, director in FTI Technology's R&D group: “The challenges of SharePoint 2007, in regards to its suitability for hosting, have been mostly resolved in SharePoint 2010. Still, in our experience, you need really clear security boundaries and you need dedicated support.”