Cloud computing is emerging as a potential driver for business innovation and growth. Cloud computing promises new business models, planning for business strategies to obtain competitive advantage in markets and offers global business potential. All of us understand, cloud is a service model that offers IT resources and services for any type of business and ensures flexibility in terms of volume and scale. Users can access cloud services and applications, using any web browser on a desktop, laptop or on a mobile device connected to the internet. Some of the key enablers offered by cloud in terms of business benefits include,
- Flexibility in terms of cost: The costing in cloud models is a variable. Cloud implementations allow business companies to ‘pay for the resource as and when needed.’ This offers the benefit of reduced capital expenditure in upgrading and running an in-house IT infrastructure.
- Business scalability: Cloud provides flexibility. Resources in the cloud can scale up or down to support business growth and in times when business is lean. This is another benefit.
- Adaptability in the market: All cloud models enable faster time to market, and provides scope for business innovations and explore new opportunities.
- Context-driven variability:Increases the relevance of products and services and enables user defined experiences.
- Connectivity with the existing ecosystem: Cloud models offer capabilities to fully integrate into existing infrastructure.
In cloud models, business firms have the opportunity to leverage cloud business enablers for achieving competitiveness in markets through innovation across customer value propositions and in the industry value chain. Cloud services are available in three major service models namely, Platform-as-a-Service (PaaS), Software-as-a-Service (SaaS) and Infrastructure-as-a-Service (IaaS). Cloud computing models are available in three deployment types namely, Private Cloud, Public Clouds and Hybrid Clouds to suit the requirements in different types of operations.
Making the right choice – Selecting the most appropriate model
It is highly important to have a closer look into the service offerings while choosing the right infrastructure model.
- PaaS: This service allows applications and programming models to be deployed easily. Specialized services such as authentication, payment gateways, data access, etc. are implemented in PaaS. It offers the benefit of creating web applications and eliminates the need to buy hardware and software that is required in software application development scenarios. System developers need not worry on how processing is done, how much memory and storage is to be used, etc. these are taken care by the cloud infrastructure. PaaS offers all the services required to fulfill the processes (end-to-end lifecycle of development, testing, deployment and hosting complex web based applications) of application development in order to deliver it as a service. Creating and maintaining an infrastructure for efficiency and scalability is time consuming and costs lot of money. PaaS model help businesses to get rid of this major problem. PaaS is gaining popularity and adoption by IT solutions companies, engineering enterprises, etc.
- SaaS: This service offers the benefit of deploying applications online thereby attracting consumers (users). In SaaS, applications and software can be used by a web browser over the internet and the software is managed centrally. Since applications are centralized, software upgrades, patches, security, etc. are handled by the service provider or client. API integration is possible between different software components. SaaS is very popular because it provides various benefits for business companies. SaaS offers the maximum benefits in scenarios such as, email applications and business productivity tools, e-commerce portals, helpdesk/support services, data processing capabilities over the web (payroll processing, billing, etc); collaboration software, etc. Applications are available for multiple clients using a variety of devices. SaaS model is widely used by businesses for the purposes of e-mail, helpdesk/support services, logistics tracking, monitoring progress in sales and marketing domains, financial management, customer relationship management, etc. SaaS can be a viable option for SMEs looking to maximize business value with minimal IT budgets.
- IaaS: Infrastructure as a service enables on-demand provisioning of servers running several choices of operating systems and customized software. IaaS delivers the infrastructure (servers, storage, network and OS). This is a fully outsourced service available for on-demand access and offers to deliver resources, provides dynamic scaling, pricing model based on utility usage, support for multiple users and so on. IaaS is suited for organizations without capital to invest in hardware and most suited for organizations where growth is rapid and there are problems in scaling up. IaaS eliminates the need of maintaining expensive server hardware and network components within the firm which is saves hardware costs. In fact, IaaS is a facility given to businesses that allow users to leverage on compute, network and storage space in servers and data centers.
Companies looking for the right cloud service must choose from PaaS, SaaS or IaaS Service models depending on their need and the chosen service model must fulfill their business objectives. It is important to ensue the chosen service model must blend seamlessly into their existing business operations. In addition to choosing the service model, there are some factors to consider by business in choosing their deployment model.
Factors to consider in Implementing Cloud Computing Services in Business
Deployment models available in cloud are private clouds, public clouds and hybrid clouds. Firstly, companies must develop a blueprint which is developed by exploring answers for the following questions,
- What is the current state of business and how well it operates today?
- Where are the efficiencies, gaps, risks, and opportunities for change?
- What is the plan to manage change and achieve the intended ROI?
When a company is considering a cloud for improving business outcomes it should consider how the cloud can fit into its business strategy and associated functions. Cloud implementations are not limited to one type of deployment. There is a wide spectrum of choices available for a company to choose from. Here are some more criteria to consider for selecting a cloud deployment model.
- Criteria for Public Clouds: The public cloud provides a cost-effective service to business services. Public service model helps businesses to understand the missing components in existing IT portfolio such as outdated applications, issues in extra processing, storage and capacity when needed. The major reasons for adopting a public cloud model for business are cost, speed and specialization. The public cloud offers pay-as-you-go pricing model which gives substantial savings compared to capital expenditure (CapEx) and operational expenditure (OpEx).
- Criteria for Private Clouds: A private cloud is deployed mostly by very large enterprises and works on the notion of self-service on premise infrastructure managed and maintained by in-house IT. The private cloud can fulfill both the perspectives of business goals and the expanding IT workloads due to increased business activity. A private cloud is designed to deliver better service results, improve agility and efficiency and improve collaboration between the various departments within the organization. A private cloud is designed to solve many of the IT and management problems and offers service availability and centralization of data and applications.
- Criteria for Hybrid Clouds: Hybrid clouds are a mix of private and public clouds. Hybrid clouds are often viewed by enterprises as an ideal solution to fulfill compliance, avoid vendor lock-ins and to overcome data security and privacy issues. Hybrid clouds are also seen as a strategic option when the private cloud environment cannot always provide the resources required by an application with unpredictable growth patterns. As the application grows the available resources in a private cloud may not be able to support the growing user base. In such cases a hybrid cloud is considered by the organization to own some portion of the infrastructure and the public cloud is used for the remaining resources. In order for a hybrid cloud to be effective, the company must define policies for security loopholes.
A few architectural principles to consider when implementing cloud for the business will include aspects such as
- Service Orientation
- Service Foundations for workload profitability between private and public models
- Service Standards are maintained to ensure business operations without disruptions
- Ensure Ecosystem alignment to mitigate issues in service or resource availability
Despite the advantages and benefits offered by the cloud models one should make a decision on the right model after carefully weighing the pros and cons and examine service level agreements (SLA) carefully before adoption.
What is Cloud Computing?
Simply put, cloud computing is a method of providing a standard set of shared computing resources with the objective of providing ubiquitous IT services delivery. Cloud computing can be understood as an approach to a shared infrastructure in which large pool of systems are linked together in public or private networks to provide IT services. Cloud infrastructure normally consists of clusters of servers, networked storage, and related hardware with adequate fault tolerance to provide service availability. Cloud computing services focus on the user, since they decouple computing services from underlying technology resulting in extremely user friendly. The need for adopting cloud services is very much in demand by enterprise organizations, government, educational institutions, SMEs and also small organizations and individuals.
In cloud a business company can use an appropriate resource to accomplish a task and return the resource back to the pool. From the perspective of the user the technology virtually remains invisible. Cloud computing service is available for many service areas and the major services are: IaaS, PaaS, SaaS and PaaS. They are briefly given below:
- Infrastructure as a service (IaaS) allows users to obtain storage, networks, and basic computing resources as a service. Users can deploy systems software (an OS) on the infrastructure.
- Platform as a Service (PaaS) provide the facility to build and deploy newly developed applications on the cloud infrastructure. PaaS also has the ability to provide a computing environment and the related development and deployment stack needed to deliver a solution to the consumer.
- Software as a Service (SaaS) offers to deliver the application in which the processes are matured to run on a cloud infrastructure. The application can be accessed from clients in different locations through a web-browser. A typical example is web-based email.
The cloud computing services are available as three models namely the private cloud which is a secure infrastructure owned and used internally by an organization, like in a corporate office; the public cloud model which allows global use of resources, but the infrastructure is owned by one party, for example Gmail from Google; the other model is called the hybrid cloud which is a combination of both private and public cloud model scenarios.
Cloud models provide services that are not easily available in a normal client server based network infrastructure. The advantages of using a cloud in businesses are many. The advantages include,
- The ability to scale up or down as the need for resources increases or decreases. This is also known as elasticity
- Provisioning and de-provisioning of resources is automatic respectively with self-service metering
- Centralized pooling of IT resources (storage, data and applications)
- Billing and metering of service usage. Users can monitor their resource usage and pay for per resource or pay for each service availed.
- Applications and services are available efficiently and without disruptions
- Reduced costs in IT infrastructure maintenance and management
Larger enterprises have higher IT budgets and they are able to reach the global market quickly by using the internet. SMEs often face the challenge of competing with bigger enterprises and the cloud provides the much needed leverage for them to capture potential opportunities found beyond their geographical boundaries.
The Cloud Maximizes Business Performance
During the last decade, the technological advances in electronics and digital equipments have progressed rapidly resulting in massive use of hardware components to increase the operational efficiency in IT environments. This trend has invited many issues related to manageability of resources, high costs for running the equipment and power related issues for efficiently using IT infrastructure to achieve business objectives. CIOs and IT managers often come across these issues in their day-to-day working. The need to manage IT as a unified resource gave rise to cloud computing because the infrastructure is scalable, flexible, and can be managed by the users themselves. Moreover, the cloud can provide superior computing performance for business operations and market expansion without failure. This paved the way for adopting cloud computing models that are currently available from major IT and data center vendors.
- Elasticity: In a normal client-server system the resources are fixed and are designed for certain amount of computing power, network and storage. When the need for more storage or computing power arises additional hardware is required. Similarly when the volume of transactions is low, the higher configurations and resources become redundant. In the case of a cloud, the resources are available to expand as the business data expands and can also scale down. This feature offers the availability of bandwidth, storage, etc the company can utilize the exact amount of resources required and pay for what is used.
- Economy of Scale: Cloud computing provides the ability to allow many companies to share their best practices and technical expertise. For example, a SME may not be able to incur cost on hiring skilled personnel, but by collaborating in a cloud they may obtain this benefit without any cost.
- Self-service and Metering: This is ideal for most companies because IT staff in a company can request the amount of resource required to fulfill the company’s needs. Cloud service providers offer an interface by which the user can request the resource, or a seat or license for one or many user(s). The user is billed for the type of resource and the number of resources used in the system.
- Business Process Services: The cloud infrastructure can has the ability to handle repetitive business processes such as payroll processing, supply chain monitoring, automated production processes, etc. A self-service interface allows the use of this service and customization is also possible.
- Security and Management Services: Cloud services use the same internet data-links for transferring data and they co-exist with the world-wide web. Hence it critical to protect these systems from viruses and threats related to data protection and privacy. A well-planned security strategy is mandatory for companies planning to adopt any type of cloud service.
- Optimized IT and cost benefits: IT optimization is possible in a cloud computing because resources are configured for maximum cost-benefit. Cost benefit is high in the cloud because the cloud models supports massive scalability to meet periods of demand while avoiding extended periods of under-utilized IT capacity. Users with a mouse click can quickly expand or contract a service without requiring overhauls to the core data center. Business companies can eliminate cost on deploying and running an on-premise IT infrastructure. There is cost savings in personnel too. The other cloud benefits include low cost of ownership, which fosters higher profitability, enabling a business to more easily reinvest in their business expansion programs.
- Collaboration Services: With the cloud it is easy to collaborate because of its ability to use networks on the internet. The cloud platform can collaborate between employees, partners, businesses and customers in different locations. Social business collaboration is quickly gaining popularity. This service enables companies to collaborate with the right experts at the right time to achieve business goals.
The services mentioned above are broad in nature and available with any cloud service. Companies that rely heavily on the internet to expand their business and retain customers require better performing IT systems where cloud computing service is an ideal option. SMEs derive many attractive benefits by using the cloud service because adopting an appropriate model for their business is proved to drastically reduce their IT infrastructure and resource costs. An SME can simply deploy an application in the cloud and avoid the costs of managing the application (namely IT staff, storage, hardware, network, etc). Further, the application running on a cloud is highly efficient and available 24×7 without break downs, resulting in customer retention and a happy user experience.