Case Study 6: Should Businesses Move to the Cloud
Should Businesses Move to the Cloud?
Introduction
Cloud computing is a
general term for anything that involves delivering hosted services over the
Internet. These services are broadly divided into three categories:
Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and
Software-as-a-Service (SaaS). The name cloud computing was inspired by the
cloud symbol that's often used to represent the Internet in flowcharts and
diagrams.
A cloud service has
three distinct characteristics that differentiate it from traditional hosting.
It is sold on demand, typically by the minute or the hour; it is elastic --
which means that a user can have as much or as little of a service as they want
at any given time; and the service is fully managed by the provider (the
consumer needs nothing but a personal computer and Internet access).
Significant innovations in virtualization and distributed computing, as well as
improved access to high-speed Internet and a weak economy, have accelerated
interest in cloud computing.
A cloud can be private
or public. A public cloud sells services to anyone on the Internet. (Currently,
Amazon Web Services is the largest public cloud provider.) A private cloud is a
proprietary network or a data center that supplies hosted services to a limited
number of people. When a service provider uses public cloud resources to create
their private cloud, the result is called a virtual private cloud. Private or
public, the goal of cloud computing is to provide easy, scalable access to
computing resources and IT services.
Case Study Question
Question 1:
What business benefits
do cloud computing services provide? What problems do they solve?
Answer
The tiny internet start-up companies and smaller companies are benefited do
cloud computing, due to tight budgets have prevented many enterprises from
making IT investments, such as new hardware or the latest version of
business-critical software. The cloud computing has become a way for
enterprises to more cost-effectively upgrade their IT infrastructure, compared
to the price tag of a forklift upgrade of in-house hardware and software. The
process of enterprise harness simply and saving cost of no longer need to build
a data center and handle all of the maintenance and upkeep of IT
infrastructures by themselves. Another reason is utility pricing. By do cloud
computing, enterprises can easily scale up or down to meet their changing
needs. Cloud providers offer best-in-breed IT infrastructure. Because the
underlying infrastructure is leveraged across many organizations, the cost per
organization is a fraction of maintaining IT infrastructure in-house. The
enterprise just pays for exactly what they use.
Question 2:
What are the
disadvantages of cloud computing?
Answer
Possible downtime
loud computing makes
your small business dependent on the reliability of your Internet connection.
When it's offline, you're offline. If your internet service suffers from
frequent outages or slow speeds cloud computing may not be suitable for your
business.
Security issues
How safe is your data?
Cloud computing means Internet computing. So you should not be using cloud
computing applications that involve using or storing data that you are not
comfortable having on the Internet. Established cloud computing vendors have
gone to great lengths to promote the idea that they have the latest, most
sophisticated data security systems possible as they want your business and
realize that data security is a big concern; however, their credibility in this
regard has suffered greatly in the wake of the recent NSA snooping
scandals.
Cost
At first glance, a
cloud computing application may appear to be a lot cheaper than a particular
software solution installed and run in-house, but you need to be sure you're
comparing apples and apples.
Inflexibility
Be careful when you're choosing a cloud computing vendor that you're not locking your business into using their proprietary applications or formats.
Lack of support.
In These Issues
Need to be Resolved before Cloud Computing Becomes Ubiquitous, (OPEN Forum)
Anita Campbell writes, "Customer service for Web apps leaves a lot to be
desired -- All too many cloud-based apps make it difficult to get customer service
promptly – or at all. Sending an email and hoping for a response within 48
hours is not an acceptable way for most of us to run a
business".
Question 3:
How do the concepts of
capacity planning, scalability, and TCO apply to this case? Apply these
concepts both to Amazon and to subscribers of its services.
Answer
Capacity planning is
defined as the process of predicting when a computer hardware system becomes
saturated to ensure that adequate computing resources are available for work of
different priorities and that the firm has enough computing power for its
current and future needs. Indeed, Amazon must plan its future needs to be
capable of providing sufficient computing power for both AWS and Amazon retail
services, a lack of which will result in the aforementioned rejection by
subscribers. Related to capacity planning is scalability, which is defined as
the ability of a computer, product, or system to expand to serve a large number
of users without breaking down. Scalability relates to both Amazon and AWS
subscribers. Amazon must be able to provide its customers with services that
are scalable, as it claims to do on its website: “Take advantage of our massive
compute capacity and storage to build whatever kinds of applications your
business demands, no matter how fast it grows or how big it gets”.
Question 4:
What kinds of
businesses are most likely to benefit from using cloud Computing? Why?
Answer
1. Data Loss
Prevention
Loss of data in an
information economy can be one of the most devastating things that can happen
to a business. A company that previously had a great reputation could quickly
lose its popularity if it loses a significant portion of its data. This is
especially true if data about customers and business partners is lost, which
can bring the daily grind of commerce to a halt. Since backing up data using
cloud computer is incredibly easy, and requires fewer upfront costs, it will be
the better choice for many companies.
2. Applications
It is becoming more
common for businesses to choose the "software as a service" model
rather than the in house model. While common business sense might suggest that
it makes more sense to pay for a product once and move on, rather than paying a
monthly fee, this is not necessarily the case with software, especially in
rapidly changing fields such as customer relationship management. These tools
are constantly being improved upon, and choosing the pay as you go model allows
a business to use the latest software at all times.
3. Tracking Employee
Performance
Global companies
hoping to monitor the performance of employees, sales force, and various
locations throughout the globe can highly benefit from cloud computing. The
bird's eye view provided by this kind of network software was very difficult to
implement before the existence of cloud computing. Today, it is surprisingly
simple to implement, regardless of the size of a business.
4. Online Business
It shouldn't be
surprising to say that online businesses will use cloud computing. The primary
benefit is web server space. The costs of purchasing a sever and getting a
website up and running are high, especially if a significant level of traffic
is expected. Using cloud computer for hosting is the ideal solution, especially
for smaller businesses.
5. Collaborative
Businesses
In order for large
scale projects to be completed, it is often necessary for people who are
geographically separated from one another to collaborate. Bigger businesses
have the option of flying everybody into the same room, and there will probably
always be cases where this will be necessary, but there are many cases when it
isn't. Applications running on cloud based software make this process very
convenient. With the ability to communicate and share files over the network,
it is sometimes possible to avoid the costs of face to face communication.
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