Cloud Computing- The business perspective Summary PDF

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Cloud Computing- The Business Perspective (Marston, Li, Bandyopadhyay, Zhang & Ghalsasi) Introduction   

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Computing reflects a paradox: computing per se is nowadays considered to be largely a commodity, however, at the same time, it is more expensive than ever Promise of cloud computing: to deliver all the functionality of existing information technology services, while dramatically reducing the upfront costs of computing Cloud computing represents a convergence of two major trends in IT: 1. IT efficiency- power of computers is used more efficiently 2. Business agility- IT can be used as competitive tool through rapid deployment, parallel batch processing, use of business analytics etc. Formal definition of cloud computing: An information technology service model where computing services are delivered on-demand to customers over a network in self-service fashion, independent of device and location o Resources required to provide quality-of-service levels are shared, dynamically scalable, rapidly provisioned, virtualized and released with minimal service provide interaction o Users pay for service as an operating expense without incurring any significant initial capital expenditure, with the cloud services employing a metering system that divides the computing resource in appropriate blocks Definition does not specifically require that the service be provided by a third party o Cloud computing can be provisioned using an organization’s own servers, or it can be rented from a cloud provider that takes all capital risk of owning infrastructure

Key Advantages of Cloud Computing 1. Dramatically lowers cost of entry for smaller firms trying to benefit from computeintensive business analytics that were previously only available to larger firms 2. It can provide an almost immediate access to hardware resources, with no upfront capital investments for users, leading to a faster time to market in many businesses 3. It can lower IT barriers to innovation, as can be seen from many promising start-ups 4. Makes it easier for enterprises to scale their services- which are increasingly reliant on accurate information- according to client demand 5. Makes possible new classes of applications and delivers services that were not possible before such as o (1) mobile interactive applications, (2) parallel batch processing, (3) advanced business analytics, and (4) extensions of compute-intensive desktop apps

Core Technological Concepts and Terminology 

There are three core technologies that will enable cloud computing:

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o Virtualization: technology that hides the physical characteristics of a computing platform from users, instead presenting an abstract, emulated computing platform o Multitenancy: A single instance of an application software serves multiple clients  better utilization of a system’s resources o Web service: A software system designed to support interoperable machineto-machine interaction over a network There are three different delivery models of cloud computing: o Software as a service (SaaS): The application runs on the cloud, eliminating the need to install and run the application on client computer o Platform as a service (PaaS): Facilitates the development and deployment of

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applications without the cost and complexity of buying and managing the underlying hardware and software layers o Infrastructure as a service (IaaS): Storage and compute capabilities are offered as a service There are four different cloud deployment models: o Public cloud: Available from a third-party service provider via the internet; cost-effective way to deploy IT solutions (for small/medium sized businesses) o Private cloud: Offers many benefits of public cloud (being elastic and servicebased) but is managed within an organization  Provide greater control over cloud infrastructure  suitable for larger installations o Community cloud: controlled and used by a group of organizations that have shared interests, such as specific security requirements or a common mission o Hybrid cloud: Combination of public and private cloud- non-critical information is outsourced to public cloud, while business-critical information and data are kept in private cloud

The Need for a Roadmap for IS Professionals and Researchers on Cloud Computing  

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Carr: “The biggest impediment to cloud computing will not be technological, but attitudinal” Corporate computing has developed its own standards regarding (1) reliability, (2) stability, and (3) stability of its information systems o All these need to be answered before cloud computing becomes viable option Some applications might not be currently suitable for transition to a cloud but might nevertheless interact with other cloud-based applications o Challenge: managing these interactions Cloud services are subject to outages or even data loss that could result from reasons ranging from hardware or software failure to acts of nature or terrorist attacks o Inherently unreliable

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Other limitations: weakness of bandwidth, and problem with short-lived virtual computers in carrying out IT forensics New environment brings to the fore the role of many regulatory agencies, at the local, national and even at the international level Due to sweeping changes, the role of IS researchers in the new environment is becoming very important o They bring forth holistic perspective that has often been lacking in many technology discussions

Cloud Computing: A SWOT Analysis Strengths Helpful for companies with demand spikes

Weaknesses Loss of physical control of data on cloud

Opportunities Potential to help developing countries reap benefits of IT without significant upfront investments

Reduced infrastructure costs, energy savings and reduced upgrades and maintenance costs ( economies of scale)

Wariness of entrusting missioncritical apps to cloud where providers cannot commit to high quality of service and availability guarantees

Potential for small businesses to use high-end applications not previously available to them

More secure environment with company having better control of resources on their network (control on when, where, how employees have access to data)

Mashups: web page or application that combines data from two or more available sources to create a new service in originally unintended ways Reduction of carbon footprint  smarter use of energy

Threats Possibility of backlash from entrenched incumbents (may be viewed as threat to corporate It culture or job security) Cloud providers going bankrupt in a shrinking economy

Security concerns due to lack of standards- need to set up regulation at local, national, and international level

Stakeholders in Cloud Computing 

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In traditional computing setup, the main stakeholders are the providers and consumers o Cloud computing changes the role of traditional stakeholders and adds new ones Stakeholders in cloud computing: o Consumers: subscribers, who only purchase the system from providers on an operational expense o Providers: they own and operate cloud computing systems to deliver service to third parties o Enablers: organizations that will sell products & services that facilitate delivery, adoption and use of cloud computing o Regulators: role that pervades across the other stakeholders

The Role of Regulation in Cloud Computing   

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The success of the computing paradigm will depend on how the regulatory bodies at all levels, design laws to regulate it Developing countries can possibly have an advantage here, since in many cases they don’t have to deal with an existing computing infrastructure The distributed nature of cloud computing alters many notions about residency and ownership of data and information o Companies are essentially handing over their data to third-party service providers which may then be stored in another country  many new legal considerations Standard contract clauses may deserve additional review because of nature of cloud computing o Parties to a contract should pay attention to their rights/obligations, data transfers, creation of derivative work, change of control, and access to data by law enforcement entities Governments have to be proactive in dealing with cloud computing Point of concern: forensics o There is no regulation in place to keep track of the use of cloud system and what is required to be audited and logged Many international differences in laws have to be considered

Recommendations Recommendations for Business Professionals  Which applications to move to the cloud: o General-purpose applications; there are rarely application requirements that are specific to one organization

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o Cloud-based applications have to cross the threshold in terms of security and reliability of traditional counterparts Who should move to the cloud: o Cloud computing makes eminent sense for SMEs- but there are significant issues which need to be tackled before clouds are used at enterprise level Large enterprises and the cloud: o Large enterprises can still benefit from using some core technological components of the cloud such as virtualization  cost savings o Corporations should proactively develop overall “cloud strategy” to determine time-based plan about which apps they can move to the cloud o Internal ‘cloud committee’ should recommend appropriate new projects that do not have any legacy component as candidate for cloud computing The cloud providers’ strategy: o Interests served by thinking of end customers and how their needs will be met o Two possible approaches: (1) develop comprehensive migration strategy for all existing apps, or (“) develop a “divide-and-conquer” strategy o Industry is in fluid state  best opportunities lie in small and medium segments of the market o Short term focus should lie on developing a customer base rather than on

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profitability o Important to manage user expectations Development of standards: o Providers should continue spending resources in development of standards that promote interoperability within diverse computing services o Development of standardized interfaces and automation tools for managing them in a mix-and-match environment

Conclusion   

Cloud computing is here to stay Many computing applications are general-purpose in nature, and therefore offer tremendous economies of scale if their supply can be consolidated The fluid and uncertain environment surrounding cloud computing, makes it very difficult to predict the future...