I present to you, the second part of my introduction of cloud computing. Enjoy. Oh, if you haven’t read part one yet, please do it first.
Discussion
Economy
Companies which have embraced the ideas behind cloud computing have often done this because of the idea they can save money by outsourcing. However, outsourcing and being part of the cloud doesn’t fit all types of businesses, nor is it profitable in all types of situations.
One of the main problems in companies which are speculating about outsourcing their data-center’s or applications, is the fact that it’s difficult to accurately calculcate the costs of running their applications in their own data-center. Many companies tend to evaluate the data-center costs in a black and white manner, but it isn’t always black and white.
2. The fact is that the cloud wont neceseraly provide the same level of service or even be less expensive than their own data-center. Normally it isn’t up the the IT department to decide whether or not they should outsource and take use of cloud, but normally its the executives in the company which rarely has the insight in what’s actually smart to do from a techie’s perspective. Executives tend to only not do a thoroughly cost evaluation, they tend only to see the decrease in capital expenses as a driving force.
A good reason why cloud services can be cost efficient are due to the fact they are rented services, which mean in general they can terminate their contract with the company they’ve rented the service from. And because contracts usually are SLA’s, services delivered by the cloud companies are covered in the SLA, and contain financial penalties if broken
1.
Risks and benefits
Integrating the company into the cloud has many pros, but also has many cons. I’ll try to summarize and look into some of them.
Benefits and advantages
Depending on the size of the company, or the task, taking use of public or private clouds can be very beneficial. Cloud is very useful for newly established companies who don’t need a large data-center, who might only need storage, business e-mail and some sort of CRM software (or ERP). If a company is large and have the need for high quality IT service, in regards to uptime, stability, flexibility and not at least security, cloud services might not be the correct path. However in projects, or for test environments and similar types, cloud services can be very cost efficient, as buying new hardware and licenses just for a timed project or for a test environment can be expensive, plus one might need to hire new IT professionals.
As mentioned renting/outsourcing certain (or all) IT services free’s the need for IT experts on site, and there is no need for large data-centers and all the costs which follows (cooling, support, licensing, repairs, hardware, software etc). The user isn’t locked in by licensing, and have the opportunity to change back and forth between different vendors and systems, because its normal to pay on a per-use basis or a monthly fee. It’s also future friendly in the means of not having to replace hardware, nor does one need to send IT experts on courses for training in new systems or versions. Also because services such a IaaS or PaaS is scalable, or as mentioned earlier has the rubber band effect, users can get more power if its needed without having to buy new hardware, but can simply order it through the control panel of the service (or it might even be covered in the SLA) if neede in peek periods.
Maintenance is easier as they don’t have to be locally installed on clients, and it’s easier to upgrade because the service is located at the service provider and not at every different customer’s location. This applies to all the services mentioned earlier. Because the services are centralized it’s also easy to monitor and measure how much the customers have used the service, or how many clients are using the service from a customer. This allows service providers to charge customers on a daily/weekly/monthly basis, and allows customers to choose a provider based on cost and reliability/”Quality of Service” (QoS).
Risks and disadvantages
As mentioned earlier, joining the cloud can be cost efficient but not always. It’s important for executives to evaluate the application costs thoroughly to see if outsourcing might be the correct thing to do. It’s important to calculate the long term costs and evaluate if the company might need specialized services which are suited exactly to their needs. One of the disadvantages with SaaS is the lack of personalization. If a company has special critical needs either when it comes to software or hardware, cloud might not suit them very well. The lack of control, personalization and questions about security is one of the most important reasons businesses still hold off on joining the cloud.
There are many unanswered questions when it comes to cloud services as it’s still considered such a new technology. Frank Dzubeck (2008) talks in his article “Five cloud computing questions”
10 about five important cloud computing questions which need to be answered, before cloud computing buyers will be satisfied. The questions can be seen as risks and disadvantages from a potential buyers eyes, which will need to be clarified. He mentions security, who is in charge of what when it comes to security, the customer or the cloud service company? The possible problems when it comes to performance, SLA’s might not cover everything a company needs (special needs), and who’s responsible in case of downtime caused by DDOS or other. He further mentions management, the difficulties of managing a virtual environment or monitoring SLA criterias. He mentions governance and regulatory compliance which is almost a overlap of the previous question. And lastly financial which I’ve discussed earlier in the Economy section.
All of these 5 questions which he mentioned are important criterias, risks which companies have to evaluate before they decide if cloud computing will be profitable.
Conclusion
Reading this article you should have gotten a better understanding of what the term “Cloud computing” means, and what types of different technology services it holds. The technology term is fairly new, even though it has been thought of all the way back in the 60′s. We’ve looked at the different delivery models, such as IaaS(Amazon EC2), SaaS(Google Mail etc), and PaaS(Google App Engine) and talked about what contracts usually follows buying such services, such as SLA. And the positive side by using SLA’s are a defined contract with potential economic penalties if terms defined by the SLA were to be broken. Also a general SLA might not suit all kinds of businesses as some have special technical, financial or insurance requirements. We’ve seen it’s difficult to evaluate data-center costs to decide if using cloud services instead of in-door housing data-centers is profitable or not, and that evaluating this isn’t always back and white.
Outsourcing the in-house data-centers might have potiential economic and technical benefits, such as IT agility, location independent and reduced capital and operational expenditures. Also it’s easier to do maintenance and upgrades seen from the service providers eyes. It allows customers to always have up-to-date software or hardware, based on their needs. We’ve also seen that when it comes to IaaS or PaaS it’s easy for a customer to get more power out of the system if it’s needed, because of scalability and rubber band effect (if the user is willing to pay more, or if its covered in the SLA).
Fibesides the fact it’s hard to evaluate the economical profits of implementing cloud computing, Frank Dzubeck (2008) talked about five very important unanswered cloud questions10. which still applies today. These questions were in regards to security (who’s in charge?), performance (what if not everything is covered in sla?), management (difficulties in monitoring systems and SLA), governance and regulatory compliance, and lastly financial (as discussed earlier). The questions are hard to answer because the technology is so “new” and still not that popular, perhaps because of these questions. One thing is however certain, the technology is getting more and more popular and has great potential, and it will be exciting to see where the technology leads us in the next years.
Sources
1 Wikipedia.org. 2010. Cloud Computing
2 Hurwitz, Judith, Robin Bloor, Marcia Kaufman, and Dr. Fern Halper. 2010.
Cloud Computing for Dummies. Indianapolis: Wiley.
3 Licklider, J.C.R. 1963. Topics for Discussion at the Forthcoming Meeting
4 Mohamed, Arif. 2009. A History of Cloud Computing
5 Amazon.com. 2010. Amazon EC2 FAQ.
6 Wainewright, Phil. 2008. SaaS star leaves SAP for Salesforce.com
7 Schofield, Jack. 2008. Google angles for business users with ‘platform as a service’
8 Google.com. 2010. Google App Engine General Questions
9 Hinchcliffe, Dion. 2009. Eight ways that cloud computing will change business
10 Dzubeck, Frank. 2008. Five cloud computing questions
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