“Cloud” is a metaphor for the Internet. Thus, cloud computing is Internet computing or in other words, the usage of the Internet as a computing infrastructure and resource. In cloud computing, the Internet is used to provide services such as data storage, software applications, and email and file exchanges.
The key aspect of cloud computing is that the users do not have or need the knowledge, control or ownership of the computer and network infrastructure. Users just simply access the software or service they require to use and pay for what they use. Therefore, “in cloud-service engagements, buyers [users] just need to care about the service [level or quality] without worrying about its implementation” (Khan, 2009).
A simple example – if your organization is a user of Microsoft Excel®, typically, your organization would have a client-server networked computing environment with Excel running off an application server and/or off numerous Microsoft Windows®-based desktop PCs and laptops – collectively known as fat clients. In a cloud computing environment, your organization invests in thin clients (low cost scaled-down desktop PC and laptops) networked to the server to access a spreadsheet application from the “cloud”. In the case of an individual, if you have a broadband connection to the Internet, you can use an inexpensive laptop, for e.g. a netbook (from your home or neighbourhood Starbucks) to access a spreadsheet application from the “cloud”. Furthermore, most cloud computing services for the individual are free.
Obviously, organizations have greater computing needs and the cloud computing service providers have more to offer than just spreadsheets.
Stroh, Acker & Kumar ideally define cloud computing as, “Cloud computing is nothing more than the collection of computing software and services that can be accessed via the Internet rather than residing on a desktop or internal servers. Such services include applications as simple as e-mail – Yahoo! Mail, Google’s Gmail, for example – or as complex as Salesforce.com, which helps manage customer relations and sales leads” (2009).
Cloud computing evolved from Software as a Service (SaaS), and will lead to increased:
- Virtualisation
- Usability
- Collaboration
- Scalability
- Standardisation
Cloud computing collectively propagates:
- Infrastructure as a Service – defined as the fully outsourced delivery of computer or computing infrastructure as a service. In the business model’s upstream, the cloud-infrastructure providers can dynamically allocate the required resources to cloud-service providers. Downstream, this means that end-user businesses do not need to purchase or own computer hardware, software and related equipment.
- Platform as a Service – defined as the ability to provide all the necessary facilities to support the complete process of developing and delivering Web applications and services to cloud-service providers and end-users.
- Software as a Service – defined as service-on-demand where cloud-service providers will license customized software for end-user use for the duration of the service agreement.
2.0 Major cloud computing vendors and popular cloud-services available today
2.1 The major vendors are:
- Amazon http://aws.amazon.com/ec2/
- Google http://www.google.com/apps/intl/en/business/index.html
- Hewlett Packard http://www.hpl.hp.com/research/cloud.html
- IBM http://www.ibm.com/grid/
- Microsoft http://www.microsoft.com/azure/default.mspx
- Salesforce.com / Force.com http://www.salesforce.com/cloudcomputing/
2.2 Popular cloud-service offerings are:
- Human resource management (HRM) applications
- Office applications
- Customer relationship management (CRM) applications
- E-Procurement applications
- Remote backup and storage
- Project management applications
3.0 Why is cloud computing gaining interests?
So, why is cloud computing gaining interests? While the critics and supporters of cloud computing continue to debate on the virtues of cloud computing, “… more and more companies are quietly making the transition, and they are finding that Web-based computing services can provide the power, low costs, functionality, flexibility, and mobility that has long eluded traditional enterprise computing” (Stroh et al, 2009).
Business sustainability issues and challenges in the following areas have also driven companies to explore alternative solutions and acted as a catalyst for high technology solution providers to innovate.
i) Increasing total costs of ownership – upgrades, maintenance, and obsolescence
Traditional enterprise computing systems require regular hardware and software upgrades and maintenance. The introduction of new technologies has shortened product lifespan thus accelerating obsolescence, and increases the need for hardware and software refresh.
ii) Cost savings
The overall need of firms to drive down costs in operations, production and wastes to maintain competitiveness can only go as far as not compromising on product and service quality and efficiency in order to continue to meet customer expectations and satisfaction. Other areas of cost savings can come from a reduction on capital expenditure and maintenance costs of enterprise computing systems.
iii) Risk of new computer system project failure
Growing firms, for e.g. SMEs, new to adopting enterprise computing solutions may reconsider the high acquisition cost and unproven usage and maintenance capability in favour of alternative computing solutions with lower risks.
iv) Human capital
Failure to hire and retain skilled computer human resources is becoming more prevalent today. In some less-developed countries, there is a shortage of skilled computer systems and technology manpower, and the issue can be further aggravated when universities produce graduates equipped with the wrong skills and knowledge compared to industry needs, probably due to the fast pace of change in the industry.
3.1 The key advantages of cloud computing
- Reduced hardware and software acquisitions i.e. reduced capital expenditure
- Lower hardware and software maintenance costs
- Up-to-date software functionality from regular software updates
- Greater accessibility and mobility (a basic laptop, broadband Internet connection, a free operating system and Web browser such as open source Linux® (e.g. Fedora®, Ubuntu®, etc) and Firefox®
- Pay-for-what-you-use
- Flexibility and agility – companies can easily increase or decrease their computing needs
- Increased collaboration with suppliers and customers at a lower transaction cost
- Companies can focus more on business challenges such as markets and competition, marketing and demand generation, product development and innovation, profitability and sustainability without worrying about the implementation and maintenance of enterprise computing infrastructure
4.0 Major concerns, issues and challenges
While the benefits of cloud computing are clear, corporate buy-in is slower than expected chiefly due to the following areas:
i) Security and Reliability
Security and reliability concerns about storing corporate data with a third party continue to be debated. “For some corporate users, keeping the cloud in-house alleviates the security and privacy concerns that can come with running key applications and data outside the company. However, cloud providers insist that data is safer and less vulnerable with them” (No Man is, 2009). This is generally true because cloud-service providers offer and maintain state-of-the-art facilities and implement security updates immediately as the nature of their business pose a higher risk.
Also, there is on-going debate among technology gurus on the issue of data residency – the time delay between data being requested and delivered i.e. a question on performance in a real business environment.
ii) Privacy and Confidentiality
This issue is closely related to security and reliability. While cloud-service providers may implement high system security measures to ensure and enhance reliability, the human element of potential greed and corruption among the cloud-service providers’ employees of lesser ethics still appear as a point for concern.
iii) Responsibility and Accountability
The level of responsibility and accountability expected by end-users versus what the cloud-service providers are liable to in their service level agreements (SLA) differs. Cloud-service providers cannot afford to extend too much in terms of responsibility and accountability should security or data privacy become breeched as doing so would severely increase their business risks. Thus, it is the norm that cloud-service providers limit themselves to ensuring that the latest security measures are in place and every precaution is checked and double-checked. However, should breeches or failure occur, to what extend are cloud-service providers answerable? Are the answers in long drawn-out legal suits?
iv) Cost savings doubts
In a study conducted by McKinsey & Co., and published in March 2009, McKinsey based their research on Amazon.com’s Web service offering and concluded that it would cost more than double! (Clearing the Air, 2009).
“Forbes, The Wall Street Journal, The New York Times and others have all written pieces quote the report saying ‘clouds are NOT very cost-effective’” (Cohen, 2009).
v) Too many cloud computing platforms?
As cloud computing represents one of the next growth areas in information and communication technology for the IT industry, several cloud computing players exist today championing their flavour of the cloud computing platform, creating some confusion, and leading to concerns and questions about standards and interoperability.
5.0 The future of cloud computing
As companies continue to be driven to reduce costs or better manage costs in the increasingly competitive regional, international or global market, cloud computing is a fast emerging technology that is revolutionizing information and communication infrastructures, providing flexibility and potential cost reductions.
Hardware, software or applications are becoming increasingly costly to maintain as business volumes grow. Thus, with cloud computing, the pricing model of pay-for-what-you-use or rent-what-you-need removes the need for costly capital expenditure in acquiring, implementing and maintaining an enterprise computing system infrastructure. In this aspect, cloud computing can replace corporate private datacentres and multi-dedicated server infrastructures.
Cloud computing enables companies to utilize standard applications or develop and deploy customized applications, and monitor and scale those applications using resources accessed over the Internet.
Presently, cloud computing is still in the infancy stage, where companies and individuals use it for small projects or simple needs, for e.g. office applications. For a greater rate of adoption to take place, a higher level of trust or business buy-in must be achieved in the critical areas of security, privacy and reliability.
References:
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