Cloud Computing as a New IT Paradigm - Essay Example

Cloud computing is a new IT paradigm that allows provisioning of IT infrastructure through the flexible pay-per-use model. Its application in industry is still new because it has not yet been fully understood. This paper aims to educate industry on the value of cloud computing to business starting by defining it, outlining its pros and cons and describing its applicability. The paper also discusses how to manage and secure devices on the cloud, cloud economics and how to go about beginning one’s journey to the cloud. Table of Contents Abstract 1 Cloud computing is a new IT paradigm that allows provisioning of IT infrastructure through the flexible pay-per-use model. Its application in industry is still new because it has not yet been fully understood. This paper aims to educate industry on the value of cloud computing to business starting by defining it, outlining its pros and cons and describing its applicability. The paper also discusses how to manage and secure devices on the cloud, cloud economics and how to go about beginning one’s journey to the cloud. 1 Table of Contents 2 1.0.Introduction 3 2.0.Pros and Cons of Cloud Computing 4 2.1.Infrastructure as a service 4 2.2.Platform as a Service 5 2.3.Software as a Service 5 2.4.Advantages of cloud computing 5 2.5.Disadvantages of Cloud computing 6 3.0.Applicability 7 4.0.Applications in the Industries 8 4.1.Amazon Web Services 8 4.2.Netsuite.com 9 5.0.The Value of the Cloud for Business 9 6.0.Managing and Securing Cloud Services 10 7.0.Managing Desktops and Devices in the Cloud 11 8.0.Virtualization and Private Clouds 12 9.0.Banking on Cloud Economics 13 10.0.Starting Your Journey to the Cloud 14 11.0.Conclusion 15 References 16 1.0. Introduction Cloud computing is arguably the most popular emergent computing paradigm of the last decade (Hayes, 2009) and a technology at the peak of the Gartner hype cycle (Schonfeld, 2008). Cloud Computing aims at reducing the costs associated with management of hardware and software resources by shifting the computing infrastructure from on-site to on-network through the use of a variety of technologies that offer everything as a service under what could be generalized as “XaaS” (Rimal et al., 2009). X here could refer to software, platform, hardware, infrastructure, database, business, framework, organization and so on. One of the major challenges for the proponents of cloud computing has been to clear the confusion over the definition of cloud computing. Geelan (2009) analysed definitions from 21 cloud computing experts and none of them provided a unified definition as they all seemed to focus on different aspects of the cloud. To remove confusion with regards to what the cloud is in this research, we shall use the definition proposed by Vaquero et al. (2009) in this paper. Vaquero et al. (2009) built upon the work of Geelan (2009) and additional definitions from other experts to arrive at the definition below: Clouds are a large pool of easily usable and accessible virtualized resources (such as hardware, development platforms and/or services). These resources can be dynamically re-configured to adjust to a variable load (scale), allowing also for an optimum resource utilization. This pool of resources is typically exploited by a pay-per-use model in which guarantees are offered by the Infrastructure Provider by means of customized Service Level Agreements (SLAs) (Vaquero et al., 2009, p.51). 2.0. Pros and Cons of Cloud Computing To appreciate the advantages of cloud computing and to analyse its disadvantages we have to first comprehend the different modes of delivery of this new paradigm. Each of these forms of delivery offers different advantages and disadvantages to different businesses. Cloud computing allows delivery of computing resources as services in the form of Infrastructure as a Service (IaaS), Platform as a Service (PaaS) or Software as a Service (SaaS) depending on the level of abstraction that the client desires. 2.1. Infrastructure as a service Under IaaS, instead of the traditional purchase of physical servers and software needed to set up a datacentre, a business opts to access this computing infrastructure from a Cloud provider through software known as Application Programming Interfaces (APIs). Examples of IaaS providers are: Amazon S3, Rackspace and Flexiscale. 2.2. Platform as a Service In PaaS the Cloud provider avails all the facilities that an application developer would require to build, test and deliver applications over the Internet from a single cloud. This means that the entire software lifecycle is supported on the same computing environment which reduces development costs, project risk and time-to-market (Bhattacharjee, 2009). Examples of PaaS providers are Microsoft Azure and Google App Engine. 2.3. Software as a Service This is the most common form of Cloud services delivery; here applications are delivered across the Internet with the web browser being the interface for delivery(Gerhardt, 2008). Examples of SaaS providers are: Salesforce, NetSuite and Google Apps. 2.4. Advantages of cloud computing To start with cloud computing gives companies / XaaS users the ability to develop new business models to expand their markets or meet new consumer demands. Accompanying the emergence of Web 2.0 a new category of consumers that is rapidly increasing in size and influence and referred to as “Prosumers” also emerged. A prosumer is someone who blurs the distinction between a producer and a consumer especially through the adoption of Web 2.0 technologies such as social networking, video on demand, blogging, mobile communications, virtual realities and so on (Gerhardt, 2008). SaaS enables services to be accessed anywhere and at any time, easier data sharing and collaboration, and better data storage redundancy in the infrastructure that meets the demands of such new and growing markets. Secondly, cloud computing offers organisations the capacity to meet the increasing need to perform analytics. A growing share of computing resources is now spent on understanding customers, supply chains, buying habits and so on. Whereas, this growth of decision support requires greater computing power many IT departments are finding it difficult to match these new business requirements while maintaining control of their IT spend (Staten et al., 2008). With cloud computing businesses need to only hire the computing power on demand. Another advantage of cloud computing is that it support one of this centuries great game changers; mobile technologies. Mobile applications require more resources than can be made available on the devices for real time information processing and interactivity to enhance user and community experiences (Kovachev et al., 2010). With cloud computing, businesses can exploit the use of mobile technologies with the comfort that the extra computing power shall be derived from the cloud. Finally, the commonly cited advantage of cloud computing is that it enables businesses convert IT from being fixed costs to being operating costs. This implies that consumers will be able to pay for use of computing resources on a short-term basis as needed and also to relinquish them as needed. 2.5. Disadvantages of Cloud computing The commonly cited reason for business apathy towards the Cloud is data confidentiality, security and trust. To begin with, the non-uniform structure of legislations across the world for example the United States’ Patriot Act makes European business unwilling to move their data into the Cloud. Cloud providers are trying to work around this by building data centres in more parts of the world but this only solves the aspect of legislation. Then there is the difficulty of winning consumer trust. The end-user perspective of trust makes this a highly subjective property. According to Savola et al. (2010) the most important aspects that enforce trust in the cloud are good levels of security and privacy. Another disadvantage of cloud computing is the lack of a variety of services. With the technology uptake still low many application developers have shied away from the Cloud thereby reducing the variety of “everyday” enterprise applications available (Bhattacharjee, 2009). This means that for organisations contemplating moving to the cloud, they have to be willing to use a hybrid system that comprises both off-network and on-network solutions. Dependent on the size of the business and its previous investment in IT resources, switching costs could be included as a disadvantage of cloud computing. To migrate to the Cloud enterprises have to be prepared to incur not only the cost of migrating data and application but also the cost of restructuring their organizations to fit this new computing paradigm. 3.0. Applicability There has been lots of successful work done with regards to the progress of Cloud computing over the last few years and the future appears brighter. The major barriers towards the adoption of cloud computing have been identified and solutions proposed. Cloud computing bears the ability to make commercial sense to Cloud providers irrespective of the very huge capital required to build and run them. Cloud providers can make a profit by statistically multiplexing among a large group of customers (Armbrust et al., 2009). On the other hand, new software start-ups are especially advantaged by the Cloud computing model because it removes the need to heavily invest in acquiring software and hardware. With Cloud computing these smaller companies now have access to competitive IT infrastructure, despite their fewer resources, and are still be able to easily ramp demand up or down as needed. Furthermore, Leavitt (2009) predicts that the current difficult economic climate will boost the appeal of Cloud computing to companies running on tight budgets. He adds on that companies want to spend less of their resources on the traditional IT vendor management, procurement, estimating future needs and managing large in-house IT staffs. 4.0. Applications in the Industries Currently there are many companies offering cloud computing services. These companies could be categorised as either cloud providers or SaaS providers. Cloud providers are the large internet companies that have invested in extremely large datacentres to leverage on economies of scale, and similar huge investments in large-scale software infrastructure and technical manpower to run these datacentres. Examples of these companies and their services are Amazon Web Services, Google App Engine and Microsoft Azure. SaaS providers, on the other hand, are those organisations that develop applications on the cloud and provide them to SaaS users on demand. Examples of SaaS providers are SalesForce.com and NetSuite.com. 4.1. Amazon Web Services Amazon pioneered the cloud computing industry and dominates the industry with its Amazon Web Services, a set of four services: Elastic Compute Cloud (EC2), Simple Storage Service (S3), Simple Database Service (SDB) and Simple Queue Service (SQS). Amazon EC2 provides on-demand processing power to developers. It gives developers complete control of their computing resources while reducing the time needed to obtain and boot new server instances to minutes (Sainath et al., 2010). Amazon S3 offers a simple web services interface that can be used to store and retrieve any amount of data, at any time, from anywhere on the web. Amazon S3 allows read, write and delete of objects, and these objects can be made private or public, or rights can be granted to specific users of each particular object. Amazon SQS offers a reliable, highly scalable, hosted queue for storing messages as they travel between computers. Finally, Amazon SDB is a web service for running queries on structured data in real time. It works in close conjunction with the Amazon S3 and EC2, collectively providing the ability to store, process and query data sets in the cloud. 4.2. Netsuite.com Netsuite is a global leader in provision of accounting, inventory, ERP, CRM, and ecommerce as SaaS. Its flagship product, Netsuite ERP is the world’s premier cloud ERP solution. NetSuite CRM+ delivers powerful customer relationship management (CRM) capabilities, including sales force automation (SFA), marketing automation, customer support and service, and flexible customization, all in single cloud CRM solution (Anon, 2011). 5.0. The Value of the Cloud for Business As elaborated under the advantages of cloud computing, the value of this new paradigm to modern businesses is numerous. To begin with cloud computing offers a platform that supports the high need for analytics in businesses today. As Staten et al. (2008) argues, most businesses are faced with the dilemma of controlling their IT spend while at the same time needing to invest in better IT infrastructure to be responsive to the new business requirements. There is an increased need for computing resources to be spent on understanding customers, suppliers, buying habits and so on. The second value of cloud computing to business is that it offers a highly scalable and affordable IT infrastructure to meet the spikes in market demand while minimising risk of overinvestment in IT. Cloud computing allows deploying SaaS and scaling on demand without building or provisioning a datacentre (Armbrust et al., 2009). The paying for use of computing resources on a short-term basis as needed and releasing them as needed rewards businesses with flexibility to let machines and storage go when they are no longer useful. Finally cloud computing supports deployment of new business models and offers a platform for new application opportunities. Adoption of Web 2.0 technologies such as social networking, video on demand, blogging, mobile communications, virtual realities and so on are a clear indicator of the new “low-touch, low-margin, low-commitment” self-service business model supported by cloud computing. 6.0. Managing and Securing Cloud Services Managing security begins with policy, not with technology (Herrin, n.d.). Many a business leader believes that they need to purchase best-of-breed technology solutions in order to effectively manage information security. Instead of rushing to purchase technology, Michael Schrage advises business leaders to first appreciate that information security starts with an organization’s culture for accessing and processing information, and with sound policies. In cloud computing, end users’ data is stored in the service provider’s data centres rather than storing it on user’s computer. This naturally makes users concerned about their privacy. The concern over whether the Cloud environment can be made as secure as that for most in-house IT environments is downplayed by Armbrust et al. (2009) who state that use of well-understood technologies such as encryption, Virtual LANs and network middle-boxes could easily make data in the Cloud as secure as that on any local data centre. Security depends on level of abstraction that company acquires from the cloud. At the network level, the cloud provider will monitor, maintain and collect information about the firewalls, intrusion detection or/and prevention systems and data flow within the network. At the host level, it is very important to collect information about system log files. In order to know where and when applications have been logged. At the application level, auditing application logs, which then can be required for incident response or digital forensics, are used (Almulla & Yeun, n.d.). 7.0. Managing Desktops and Devices in the Cloud Every company today has to deal with employees from the low level to the corporate suites who want to use devices like smartphones and iPads to conduct the business. Michael Schrage advises organisations to approach the management of desktops and devices in the cloud by creating scenario-driven use cases that illustrate how devices are used, what information is shared, and how that information is used (Herrin, n.d.). Unlike in the past when device management and device security were handled as two separate issues, organization now need to renegotiate their roadmap to accommodate the integration of these two functions. As a start Schrage advices organisations to consider finding answers to the following key questions: What are the 20 most common uses for devices today? How do people want to use devices in the future? What data do employees want to access through devices? Who are the three highest-ranking employees using devices to access information in the cloud? And what are the greatest risks associated with frontline employee and executive activity (Herrin, n.d.)? The good news for companies is that today numerous tools and technologies exist to help manage desktop and devices in the cloud. Having honest answers to the above questions and conducting use cases should enable organisations to shop more wisely for the precise device management and device security automation tools that will meet their specific needs. An example of a tool that an organisation can use here is a virtual sandbox administrator (VBA). VBAs are able to monitor which applications come into the company, identify applications that are accessing data, and determine which applications initiate device-to-device connections and so on. 8.0. Virtualization and Private Clouds Virtualization refers to the abstraction of logical resources away from their underlying physical resources that makes it possible for the dynamic creation, expansion, shrinking or moving of computing resources as demand varies (Rimal et al., 2009). Virtualization has existed in one form or another since the days of the IBM mainframe, thus it is not a new phenomenon. It increases the agility and flexibility of computing resources that ensures scalability and high availability of resources (Rimal et al., 2009; Armbrust et al., 2009). The latest virtualization technologies allow different operating systems to be hosted on the same physical hardware at a datacentre. Virtualization can be of different types such as server virtualization, storage virtualization and network virtualization. Private Clouds are internal datacentres of organizations that are not made available to the public (Armbrust et al., 2009). The drivers behind private clouds are large corporations that want to have a greater control over their IT infrastructure. These corporations are aiming to build flexible computing networks after public providers such as Amazon and Google. The technologies behind private clouds are virtualization for flexible management of resources and data centre automation for auto-provisioning of physical hosts. The companies also implement chargeback metering to enable them see the real cost of IT and identity-based security to restrict access and thus enhance security (Knorr, 2010). 9.0. Banking on Cloud Economics The commonly cited economic appeal of Cloud Computing is that it converts capital expenses to operating expenses. Armbrust et al. (2009) do not dispute this, though they argue that a better phrase that directly captures the economic benefit to the buyer is that cloud computing offers a pay-as-you-go model. To begin with the absence of up-front capital expense in cloud computing allows the enterprise to redirected this capital to core business investment. Secondly, Cloud Computing offers the superior economic benefits of elasticity and transference of risk, especially the risks of overprovisioning (underutilization) and under-provisioning (saturation) (Armbrust et al., 2009). With Cloud Computing an organisation is able to add or remove resources one at a time and with a lead time of minutes rather than weeks. This enhances the accuracy of matching resources to workload. In real world estimates of server utilization the observation is that for many services the peak workload exceeds the average by factors of 2 to 10 (Armbrust et al., 2009). Few companies deliberately provision for less than the expected peak, and therefore they must provision for the peak and allow the resources to remain idle at nonpeak times. This leads to increased waste of computing resources to handle the spikes in demand. Elasticity is valuable to both established companies and start-ups. Under cloud computing, the risk of misestimating workload is shifted from the company that pays for the service to the SaaS provider and Cloud Provider. Other additional benefits to the cloud computing user are that: (1) it eliminates the penalty that a business will ordinarily pay for unexpectedly scaling down its operations; and (2) when new technologies or pricing plans become available to a cloud provider, existing applications and customers can potentially benefit from them immediately, without incurring a capital expense (Armbrust et al., 2009). 10.0. Starting Your Journey to the Cloud Dell (2011) suggests that an organisation use a three step approach towards moving to cloud computing: investigation, experimentation and adoption. In step one, investigation the company needs to conduct a shared learning program where the executive and IT staff are taken through educational sessions to acquire in-depth comprehension of cloud computing. Here too the company conducts a thorough assessment of its current environment. The executives view cloud computing from a business perspective whereas IT staff view it from a technical perspective. The organisation then comes up with a strategic plan for using cloud computing. The second step is experimentation. Armed with deeper understanding of cloud computing from step one, and clear business strategy and needs from business and technical perspectives, the company can now decide to start with a pilot project to test this new computing paradigm. The pilot project allows the firm to have first-hand experience of the pros and cons of cloud computing without committing its financial resources (Dell, 2011). The final step is adoption. It is only advisable to move to the adoption phase if the experimentation phase was successful. At this phase we are assuming that the company has already assessed its needs and experimented successfully (Dell, 2011). The important thing to remember here is that the adoption strategy adopted should be led by business needs and not technology. The business needs will help the organisation decide whether to evolve current IT infrastructure or whether to build everything into the cloud from scratch. Other questions here include whether to move all functions to the cloud or just some of the functions, whether to build a private cloud or outsource from a public cloud and so on. Once the company has decided how it would like to run its business in the cloud that is when it can begin looking for the technology that will match its business needs. 11.0. Conclusion Cloud computing has made real the long held dream for having computing as a utility. Under this new IT infrastructure, organisations do not have to make huge investments from the outset sine they can easily acquire these computing resources using a pay-as-you-go model. This means that start-ups have lower entry barriers in so far as competing on IT infrastructure is concerned. That said, cloud computing has still got numerous obstacles that it needs to overcome. Winning consumer trust is probably the greatest challenge considering that this is largely a subjective issue. Also, the lack of a variety of services on the cloud in comparison to traditional IT infrastructure may also cause apathy towards adopting this new IT paradigm. The motivating fact is that Cloud providers are aggressively seeking solutions to reduce, if not to eliminate, these downsides of cloud computing. References Almulla, S.A. & Yeun, C.Y. (n.d.). Cloud Computing Security Management. Anon (2011). Cloud ERP, Business Accounting Software, CRM, Ecommerce. [Online]. 27 November 2011. NetSuite. Available from: http://www.netsuite.com/portal/home.shtml. [Accessed: 28 November 2011]. 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