Overview of Cloud Computing - Case Study Example

Management Solutions in Practice Table of Contents Overview of Cloud Computing 3 About The Company 4 Task 4 4 Task 5 6 Task 6 8 References 13 Bibliography 16 Overview of Cloud Computing The term cloud computing can be comprehended as provision of the scalable IT resources over the internet. The resources are not hosted and operated locally, for instance, on college or on university network. The resources may comprise of applications as well as services along with the infrastructure in which they operate. One of the main advantages that a company receives of cloud computing is that it is capable of buying the resources as per the requirements and therefore reduce the capital costs related to software as well as hardware. The adjustments related to IT capacity in order to accommodate the transformations in the demand is possible only through cloud computing (Educause, 2009). With the assistance of the cloud computing, the IT organizations are served with distinct models of operation. Since the cloud providers are experts in particular applications as well as services, they are capable of managing upgrades and maintenances, failover functions, backups and disasters recoveries. Therefore, the customers using the cloud computing services are capable of gaining reliability and there is decline in the cost as well because of economies of scale and other factors of production. The current needs of the organizations can be monitored with the help of cloud computing and therefore they are capable of adjusting the capacities according to their requirements. The standardization of the protocols as well as processes can be stimulated in order to interoperate the many pieces of the cloud computing model (Educause, 2009). However, it has been found that the companies face the issues related to security, privacy, data integrity along with audit trials among others because of the usage of cloud computing. About The Company Salesforce.com is one of the companies that is offering cloud computing to its customers and is perceived to be one of the disruptive technologies based companies. It has been able to maintain competitive advantage and has made a mark for itself with the help of its innovative business model as well as has achieved resounding success (Salesforce, 2011). Task 4 The main challenge that the Salesforce will face in the near future is the expansion of the business model in other areas. It has been identified that one of the significant challenges that they will face in the near future is related to increase in competition. The reason behind this is that the industry leaders as well as the new challengers would like to replicate the success of Salesforce. It can be stated that both the globalization and the information technology are collaborating together in order to create an unstable business environment and thus the new entrants as well as the pressing innovations are reducing the income of the companies (Holland & Et. Al., 1997). Globalization has completely changed the way in which the companies tend to operate. In the present days, there is no barrier that once deterred the abilities of the companies to communicate as well as to interact with people across the globe. Since the last few years, developments in the information technology also have had an influence upon the global landscapes along with the progression of globalization. It has been information technology that has been one of the driving forces behind the globalization (Lawlor, n.d.). It has been noted that with the rise in the globalization, there has been increase in the competition as well. It is because of the globalization, one company is competing against other companies all around the world. It has been noted that with globalization huge amount of data get generated since there is rise in the number of companies. Therefore, there will be requirements of huge databases that can effectively store this information. It is relatively easier for the companies to keep proper track of the information as well as data that the company tends to receive on a daily basis. However, the task becomes hard if the companies are required to keep track of the amount of information on a national level or on a global scale. With the rise in the information the paper-based documentation such as e-mail, spreadsheets, word processors are becoming obsolete with the pace of time (Lawlor, 2007). If any company wants to execute global business strategies, it must be capable of storing, accessing, managing and distributing the enormous amount of data and information into the company. In the recent times, the information technology permits the companies to organize data as well as information flow on a global level (Lawlor, 2007). Salesforce needs to prepare new strategies in order to keep track of the changing business environment. It needs to keep itself updated with the changing needs of the companies which will assist it to maintain competitive advantage. The company needs to meet the expectations of the customers and thus provide them with the customized goods and services. By keeping track of the movement of the competitors, Salesforce will be capable of identifying the strategies which are likely to make a company successful. It needs to manage the change effectively so that its operations do not get hampered. Task 5 It can be stated that there are wide ranges of risks which are associated with the cloud computing. The risks identified are internal security breaches, data protection risks, data losses, system outrages, and vendor lock-in and vendor failure. Internet Security Risks When a company tries to restore its desktop background with the help of web-based applications along with the assistance of externally hosted systems, then it becomes quite easier for them to become accessible over the internet. However, it can be mentioned that there are internal security risks associated with such cloud computing. Internal Processes During the process of joining or leaving of the employment of the employees in the organization, the companies tend to make use of the checklists. However, with the use of the IT systems in case of public clouds will endanger the development of the internet security processes which is more evident in case of IT systems developed by non-IT staffs. Therefore, while developing new cloud-based systems, it is quite significant for a company to modify the checklists instantly. The company needs to ensure by means of good internal procedures that the employees’ ‘user accounts’ are deactivated instantly in order to minimize the danger of these accounts being manipulated by the competitors. External Security Risks When the data is stored in public clouds, there can be failure in provider’s security technology as well as operational security practices. This is considered to be one of the significant risks in case of multi-occupant system which permits the competitors of the business to share the similar IT infrastructure. Data Protection Risks The companies also face with the problem of data protection risks because of cloud computing. If any company breaches the security and it loses significant data of the customers, then the business houses may be sued by the customers and prosecuted by the national authorities. Cloud computing providers are capable of letting the customers know what information are being stored in their system but are not capable of stating where the information has been stored since the public clouds tend to be distributed and virtualized. It is quite significant for the cloud provider to adhere to the data protection principles. Data Loss It has been noted that the companies tend to relieve themselves by placing computing resources in the public clouds. By doing so, the companies eradicate the burden of their business and let others worry about their back-ups as well as failed systems. A company needs to worry if the cloud computing providers do not have redundant systems in various geographic locations and are not capable of explaining how they recover data in case of disasters. It has been identified that Salesforce which provides its customers with the cloud computing services also faced numerous service outages. It was in the year 2009, when the network device failed miserably and therefore it stopped data from being processed for approximately 38 minutes in Europe, North America and Japan. More than 177 million dealings got affected. Some of the customers of Salesforce believe that IT services which they receive from cloud computing are going to be available to them little less than full time whereas other customers are skeptic regarding the soundness of the cloud computing after the outages that badly affected their successful operation. Salesforce was found to be breaching the security and it was in the year 2007 when an employee of Salesforce was found to be divulging his corporate password to scammers which led to divulgence of the customer list of the company. Therefore, it is evident that cloud computing has numerous disadvantages to the companies and thus it becomes quite significant for any company to evaluate the potential risks that cloud computing involves prior to implementing it. By doing so, the companies will be less vulnerable to any sort of risks and therefore they will be capable of enhancing protection of its useful data (Williams, 2010). Task 6 Prior to deciding if Salesforce.com can be made part of business, it is significant to conduct SWOT analysis and PEST analysis. It is through PEST analysis the companies are capable of evaluating the political, economic, social and technological environments that impact industries as well as companies (Babson, 2008). SWOT analysis is stated as a model that tends to provide direction and therefore assists the firms in the preparation of the marketing plans. The main task of the SWOT analysis is to collect the information by means of environmental analysis and therefore divide them into internal as well as external issues. After completion of this, it is the task of the SWOT analysis to identify if the information that was obtained will help the firms in attaining its objectives or if the information achieved tries to entail that the obstacles need to be minimized or reduced in order to attain the desired results (Danca, 2011). Strengths The main strength of Salesforce is its brand value in software. In order to build its brand, the company provides its customers with cloud software. It added Force.com and therefore diversified its product suite so that it can influence its cloud computing to enhance the revenues. It is ensured by the business model that the company can keep adding new customers because of the ease and speed of the implementation of the product. In addition to that the cloud computing is scalable in nature. Therefore, Salesforce’s coordination of cloud computing with the Customer Relationship Management (CRM) offering provides the company competitive advantage. Although there are competitors of Salesforce.com such as SAP, Oracle as well as Microsoft but Salesforce has been capable of achieving higher market share and at the same time, its other competitors are losing market share by considerable extent. Weaknesses The key weakness of the company is that it chiefly focuses upon single product in the context of CRM and there is no proper suppleness in serving its customers. It has further been apparent that Salesforce.com is quite small in comparison to its competitors and therefore is not capable of competing against the huge resources of these larger companies. Opportunities By providing complementary products, the company can aim at achieving higher growth. Akamai, which tends to provide effective delivery of cloud computing services, can offer advantage for Salesforce’s original CRM offering to capture the market share. If the delivery of the company’s product becomes rapid, then complementary products will make the company more attractive and appealing to the customers. In addition to this, it can be stated that if Salesforce.com keeps on increasing its market share, then there is likelihood of enhanced revenues and profits. Threats The entry of Microsoft into cloud computing market can be considered as a threat to Salesforce.com. There are many established companies such as Amazon.com and Google that can effectively compete with Salesforce.com. The companies such as SAP and Oracle have adequate marketing resources which can ruin the position of Salesforce (Olson & Et. Al., 2010). PEST Analysis It can be mentioned that cloud computing is subjected to numerous geopolitical issues and therefore the providers of the services need to satisfy different regulatory requirements. According to US Federal IT budgets, it is expected that by the year 2014 the spending on cloud computing may reach US $1 billion. There is huge growth in the global cloud computing market and it is expected that it will get to US $25 billion by the year 2013 (Slideshare, 2010). Salesforce.com is one of the pioneers in web-based customer relationship managements along with enterprise cloud computing applications. It has been found that Salesforce tends to provide its customers with the cloud applications and the cloud platforms. A company can therefore avail its cloud computing services as well as its cloud applications. Through cloud applications, the companies will be capable of subscribing to numerous application services that are built for the internet. With the help of the Force.com platform the developers are able to develop applications and therefore sell them on Salesforce’s AppExchange. AppExchange is considered to be a marketplace which permits the developers to sell the applications that they develop on Force.com platform. By availing the unique services of Salesforce.com, the other companies can leverage their financial as well as marketing activities. Most of the IT departments are required to spend their time on implementation as well as up gradation of the projects which do not add value to the companies. Therefore, it has become significant for the IT departments to turn to cloud computing technology so that they can reduce the time that they spend on activities that are of lesser value and permit IT to center on strategic activities which will have significant impact on the business (Salesforce, 2011). References Babson, 2008. PEST Analysis. Overview. [Online] Available at: http://libguides.babson.edu/PEST-SWOT [Accessed November 03, 2011]. Danca, A. C., 2011. SWOT Analysis. What is SWOT Analysis. [Online] Available at: http://www.stfrancis.edu/content/ba/ghkickul/stuwebs/btopics/works/swot.htm [Accessed November 03, 2011]. Educause, 2009. Cloud Computing. What Is It. [Online] Available at: http://net.educause.edu/ir/library/pdf/EST0902.pdf [Accessed November 03, 2011]. Holland, C. P. & Et. Al., 1997. “The Impact of Globalisation and Information Technology on the Strategy and Profitability of the Banking Industry”, IEE Computer Society. Lawlor, B., No Date. The Age Of Globalization: Impact Of Information Technology On Global Business Strategies. Abstract. [Online] Available at: http://digitalcommons.bryant.edu/honors_cis/1/ [Accessed November 03, 2011]. Lawlor, B. R., 2007. The Age of Globalization: Impact of Information Technology on Global Business Strategies. Introduction. [Online] Available at: http://digitalcommons.bryant.edu/cgi/viewcontent.cgi?article=1000&context=honors_cis&sei-redir=1&referer=http%3A%2F%2Fwww.google.co.in%2Furl%3Fsa%3Dt%26rct%3Dj%26q%3Dimpact%2520of%2520globalisation%2520on%2520informatiion%2520technology%2520site%253Aedu%26source%3Dweb%26cd%3D5%26ved%3D0CEQQFjAE%26url%3Dhttp%253A%252F%252Fdigitalcommons.bryant.edu%252Fcgi%252Fviewcontent.cgi%253Farticle%253D1000%2526context%253Dhonors_cis%26ei%3DG3-yTs_4FJDPrQfcnI3kAw%26usg%3DAFQjCNFcNAc4uhhki7wMlLRZ6PxXL3g4-Q#search=%22impact%20globalisation%20informatiion%20technology%20site%3Aedu%22 [Accessed November 03, 2011]. Olson, A. & Et. Al., 2010. Strategic Report. Salesforce.com, inc. [Online] Available at: http://economics-files.pomona.edu/jlikens/SeniorSeminars/vector2010/pdf/crm.pdf [Accessed November 03, 2011]. Salesforce, 2011. What is Cloud Computing. Products. [Online] Available at: http://www.salesforce.com/cloudcomputing/ [Accessed November 03, 2011]. Slideshare, 2010. Cloud Computing- Saas, Paas, Laas Market, Mobile Cloud Computing, M&A, Investments, And Future Forecast, Worldwide. Cloud Computing Market Worldwide. [Online] Available at: http://www.slideshare.net/renubresearch/cloud-computing-market-worldwide [Accessed November 03, 2011]. Salesforce, 2011. Salesforce.com. About Us. [Online] Available at: http://www.salesforce.com/company/ [Accessed November 03, 2011]. Williams, 2010. Risks of Cloud Computing. Cloud Computing. Bibliography The University of West Indies, 2011. Case Study - Salesforce.Com: Cloud Services Go Mainstream. Lectures. [Online] Available at: http://www2.sta.uwi.edu/~anikov/info1400/lectures/05-ITF-tutorial-case-study.pdf [Accessed November 03, 2011]. Read More