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This paper explores cloud computing and its merits and de-merits which may help an
organization in taking a wise decision either in favor of it or against it. Cloud computing is
the buzz word now in the field of information technology. It is the concept of where an
organization has its data and application hosted on a third party infrastructure. Sometimes the
applications are designed and developed by the service provider and the company using it
uses that application against its own data. There are several factors for deciding in favor of it
as well as several factors that raise strong questions for its acceptance. It is totally based on
the need of the organization, whether it leverages cloud computing or not.
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What is Cloud Computing?
Cloud computing is Internet-based utility computing, basically shared resources, software and
information that are used by end-users hosted on virtual servers. Some people term anything
beyond a companies or user’s personal firewall to be in cloud (Knorr, Gruman, n.d., para.
2).Personal computing has evolved in three phases. The first phase was where the data and
application was stored on a local desktop. The second phase is where the applications reside
on a local server and utility software on the desktop along with the internet to provide
valuable information. The third phase is where most of the data and software will reside
somewhere on the internet. This phase is identified as cloud computing. Although more than
80% of world-wide computational data is being predicted to move into clouds in the next five
to ten years, there are a number of unanswered questions which will decide the speed of
development in this arena (Nelson, 2009, para. 1). It is a new concept in the field of
information technology still trying to get acceptance, where-in the technological services/
applications are provided by a third-party.
Cloud Computing – Nomenclature
From the days when use of internet started becoming popular, the network architecture
diagrams show internet as cloud to hide the complexities from the end-user – hence the name
cloud computing. The applications/ software are provided as services which reside in data
centers with server farms and redundant storage. End-users can access them via web browsers
in laptops or hand-held devices. Google Apps, Facebook and salesforce.com are examples of
cloud computing which are becoming very popular especially with the younger generations.
A very basic example of cloud computing is a web-based email service like Gmail where the
complexity of storage and presentation of user data is provided by a third party, and users are
leveraging them by means of web browsers(Nelson, 2009, para. 12).
Benefits of Cloud Computing
Cloud Computing is a totally different paradigm of personal as well as corporate computing
which drifts away from the traditional software business model. There are several positive
factors for deciding in favor of moving to cloud computing. Some of the important favorable
factors are discussed below. Entry cost for a business to set itself up in cloud is much less
compared to traditional setup. Cost for running Information Technology (IT) business in
cloud world can be visualized as operational cost. Organizations no longer need to shell out
big amounts for hardware and software upgrades (Cunningham & Wilkins, 2009, p. 3). They
no longer need to worry about end of life for hardware/ software. Companies no longer need
to spend huge amounts on buying new hardware for scalability. In short, infrastructure costs
to get in to cloud are much lower than that for the traditional model. Pricing is generally
based on usage options. Organizations do not need to maintain a workforce of IT people and
can focus on strengthening their business domain knowledge.
Organizations can use only applications which are suited for their need and not pay huge
amounts on licenses for using a software suite. Most of the time buying a software suite is of
lesser worth from the business perspective as only few features of the suite are really used
and the cost associated with upgrades and licenses are expensive. With canned applications in
cloud, business can decide and pay for only the applications that they need. Using
virtualization as the main technology, additional computing resources can be added
dynamically without having any downtime. By monitoring peak load and server usage, an
application can be dynamically switched over to a virtual machine with greater computing
speed or the current virtual machine can be augmented with more computing resources
(Zhong, Wo, Li & Li, 2010, p. 2). The organization using the application does not need to
pay extra for the scalability feature. In virtualization, high performance servers are split into
multiple machines catering to different customers. Some of the popular products are VMware
and XEN. With the infrastructure being located in multiple data centers and huge server
farms, users can be productive anytime from anywhere in the world using web-browsers in
laptops, desktops or hand-held devices. Business executives travelling to client locations need
not carry hard copies and everything with them, as with a simple click of the mouse they can
reach the information gateway.
With infrastructure being maintained at multiple redundant sites, it gives more confidence to
business organizations in regard to business continuity and disaster recovery. Nowadays in
the industry, one of the buzz words is collaboration. Tools like sharepoint are becoming very
popular where multiple people can work on the same document and access them without
having to store the document locally and work on it and send it via email for edits by other
users. With web 2.0 where everything is going to be on the internet, collaboration will be
very easy and simple (Cunningham & Wilkins, 2009, p. 4). Since the infrastructure for cloud
computing is centralized and the client is a thin client like a web-browser or a WAP browser,
the upgrade and maintenance of the system is much easier compared to the system where we
require a desktop client connecting to a server where each client desktop needs to be
upgraded when the server version is getting upgraded (Cunningham & Wilkins, 2009, p. 3).
Concerns with Cloud Computing
As there is darkness after light similarly with the benefits discussed in the earlier sections
there are a few concerns floating around with the acceptance and utilization of cloud
computing. With the applications provided as service and being used by different customers,
personalization seems to be one limitation. The characteristics are similar to a COTS product
but if proper negotiations are made, product-based companies most of the time do allow
customization. There is a serious concern with data being centralized and out of business
control. Sensitive data will now be under the control of a third-party and according to some
experts this is a compliance issue and some feel that this is probably going to be the end of
confidential records management (Cunningham & Wilkins, 2009, p. 7). When it comes to the
disclosure policies, some people do not know where to draw the line and knowingly or
unknowingly share vital information and with data out on the third-party space that concern
becomes even more critical. With everything accessible through internet, business will be
totally dependent on the network and the service provider’s infrastructure. Business will
come to a halt if the network/ internet are down. As illustrated by Patrick Cunningham in his
article (2009), currently in the IT world when we need to troubleshoot an issue, one
advantage in our favor is that the application logs and the database are within the premises of
the enterprise. With the shift to cloud, this aspect will be lost and thus special support or
contract binding needs will be there between the service provider and the business for ediscovery. With business sensitive internal data being maintained by the vendor the
dependency on the vendor’s unique API and proprietary interfaces could create a possible
lock-in with the vendor. If under some circumstance the business is dissatisfied with the
vendor, moving to a new vendor means data needs to be reformatted and converted which can
be time consuming and expensive (Brandel, 2009, p.1).
Return on Investment
By moving to cloud computing companies can save huge amount of money. As illustrated by
Raichura (2009), in couple of online articles please find below charts showing examples of
savings that an organization can achieve by moving to the cloud. The first table illustrates the
difference in cost of having infrastructure on premises versus having it in the cloud. The
second table illustrates the cost saving considering storage, service, infrastructure and
platform in the cloud.
After having discussed the merits and de-merits it clearly stands out that there is no one clear
answer in favor or against of cloud computing. So far it seems that is going to be a hybrid
solution from the corporate standpoint. Some critical, business sensitive applications will
continue with the traditional business model till the concerns about privacy and legal matters
are cleared from cloud computing whereas simple canned applications will become more and
more popular in the cloud space. The concept and technology is here to stay but it still in its
infancy and there is a long road ahead to get to maturity.
Brandel,M.(2009).The Trouble with Cloud Vendor Lock in. Retrieved from
Cunningham, P. & Wilkins, J. (2009). A Walk in the Cloud. Information Management
(15352897), 43(1), 22-30. Retrieved from Computers & Applied Sciences Complete
Erdogmus, H, (2009). Cloud Computing:Does Nirvana Hide behind the Nebula?
Knorr, E. & Gruman, G. (n.d). What cloud computing really means. Retrieved from
Nelson, M. (2009). The Cloud, the Crowd, and Public Policy. Issues in Science &
Technology, 25(4), 71-76. Retrieved from Computers & Applied Sciences Complete
Raichura, B.J. (2009). The cloud ROI Framework. Retrieved from
Raichura, B.J. (2009). The Economics of cloud computing. Retrieved from
Zhong, L., Wo,T, Li, J. & Li,B. (2010). A Virtualization-based SaaS Enabling
Architecture for Cloud Computing.2010 Sixth International Conference on
Autonomic and Autonomous Systems. pp.144-149.