How Cloud Computing Benefits Businesses

Published Date: 02 Nov 2017

In the past five years, the "Cloud Computing" has become popular, in both Technological and Business Field of works. The IT guys are fascinating with how the new technology solves the problems of transmitting, processing synchronizing data, etc. all at once; while the businessmen only concentrating on how it helps cut down the cost of maintaining the IT system of the company, probably because of the bad economy (Paul Lubic Jr., 05/04/2012, Paul’s Internet Security Blog).

So, what is the Cloud Computing that everyone are talking about? Basically, in an executive point of view, it is a technology that enable the companies, instead of investing tons of money into the computer systems, with all the expensive hardware and even more expensive software licenses; to purchase, or rent a services that allows the company’s computers to work in a similar manners at a cheaper price.

The main difference between the traditional way of working with computer and the "Cloud" technology was the centralization of software. Instead installing a suite of software for each computer, the computer now only need only one application, which lets the users to log on a Web-based interfaced service that enables all work functions that the employees would need for his or her job (Strickland J., "How Cloud Computing works"). Of course the physical hardware (the computers) are still being needed for each and every workers, but there will be much less cost spent on the software licenses.

Furthermore, since the "Cloud" typical work environment is over the Internet, it allows more flexibility and mobility for all the workers, as they can choose to work remotely from the office, or using alternative connecting devices such as tablets or smartphones rather than sitting in front of the office’s computers all the time. It sounds all bright for any innovative entrepreneur.

How the technology works

IDC analyst Danielle Levitas once said on ABC News, internet users have access to and use of the cloud for a long time, they have shared millions of online photo album, however, they have not acknowledged they are using cloud service.

Why is that? The answer is, before this, the cloud providers often focus only on persuading businesses to move to the cloud computing trend with the promise that the company will no longer have to purchase and maintain hundreds or even thousands of computers and software. The only thing company needs to handle is to concentrate on manufacturing and developing business, they have got others to worry about infrastructure and technology for them. This makes the "cloud" becomes an out of the ordinary concept because many consumers think that "cloud" service is some transcendent service for businesses.

Basically, cloud computing is a concept that appears in 2007 but to talk about a long operation level with the advent of the Internet: data storage and access, remote software over the Internet. Cloud computing system is divided into two ends: front end and back end. Cloud is the central server for both ends.

Cloud Computing has developed from a modular point solution in the form of SaaS deployments (e.g. talent management and expense management) to become an increasingly integral method for leveraging computing resources for IT and business. The rapid adoption of Cloud alternatives by the business has meant that management disciplines, standards and best practices are well behind where most organizations need them to be, in order to manage appropriately both IT and business risks.

A straightforward example is people who like taking pictures always want to keep their memories forever, they do not want to lose their photos and they think that their computers may break down or unexpectedly lose their photo albums. They upload their photos to photo website like Google Picasa or Facebook. These two sites are cloud services, allowing users to archive contains information on an online (cloud) to be able to access from any computer connected to the network, instead of saving the file on your hard computer hardware. Technically, when they upload their photos, they save those photos to an off-site storage system maintained by a third party. Now their photos are online, in other words, in the cloud, and they become the front ends. They can see their photos whenever and wherever they want, at home, at work or multiple location where have internet access. They can use their computer, laptop or even their phone as a back end to access to the data storage systems of Facebook or Google Picasa to see and share their photos by sending their friends the photo's link. At first, cloud is just like magic, except for it is not. Their photo are not hanging out in the sky, they actually live in a storehouse full of computers.

Cloud Computing

Cloud Computing is defined as the set of hardware, networks, storage, services, and interfaces that combine to deliver aspects of computing as a service. Cloud services include the delivery of software, infrastructure, and storage over the Internet (either as separate components or a complete platform) based on users’ demand.

Cloud Computing has four essential characteristics: elasticity and the ability to scale up and down, self-service provisioning and automatic de-provisioning, application programming interfaces (APIs), billing and metering of service usage in a pay-as-you-go model. (Cloud Computing Characteristics discusses these elements in detail.) This flexibility is what is attracting individuals and businesses to move to the cloud.

http://static.ddmcdn.com/gif/cloud-computing-1.gif

A simple demonstration of Cloud Computing

(Jonathan Strickland, "How Cloud Computing works", Howstuffworks.com)

It sounds complicate for most of us, the non-technician people. Fortunately, the end users do not have to know anything about the underlying technology. Business management who needs to take responsibility for the governance of data or services living in a "Cloud". Cloud Services Providers must provide a predictable and guaranteed service level and security to all their constituents. (Find out what providers have to consider in Cloud Computing Issues.)

The Cloud Services Providers are the ones who are responsible for IT assets and maintenance. In other words, the company can also save some more cash by cutting down the IT personnel.

Improvements of Cloud Computing Technology

Since the birth of the technology there have been many improvements in both the innovative techniques used and the fields of appliance for the Cloud Technology. The below figure present a summary of available technologies as well as future expectations of the Cloud:

http://blogs-images.forbes.com/louiscolumbus/files/2012/06/Hype-Cycle-for-CLoud-Computing.jpg

Gartner’s 2011 Hype Cycle of Cloud Computing

(Gartner, Hype Cycle for Cloud Computing, 2011 David Mitchell Smith Publication Date: 27 July 2011 ID Number: G00214915 © 2011)

Types of Cloud Computing

Depends on the needs of the company’s operations, there are many types of the Cloud services available, which are usually abbreviated as something-aaS (stands for "as a service"), such as PaasS (platform as a service), SaaS (Software as a service) or NaaS (network as a service), etc., each serves difference purposes for the business

Also, a Cloud might be either private or public, again depends on how the organization want to communicate with the outside world. A public Cloud is the service offered for free or pay-per-use by a service provider (e.g. Microsoft’s Cloud Office or Google Docs). On the other hand, private Clouds are closed system, solely tailored to fit a single organization only; and can either be kept internally at the organization’s premise, or hosted and maintenance by a third party company such as HP or IBM, etc. There are other models of the Cloud, for example a community cloud to link several organization of the same community, or hybrid clouds which are the clouds combined more than one type of cloud.

Affection of the Cloud Computing over the business

How it can benefit the company

Increased storage capacity (organisations can store more data on their own computer systems, servers etc ).

Reduce complexity in the structure of the enterprise: enterprise producing goods that have both an IT professional for operation and maintenance of the server is too expensive. If this process outsourcing business will only focus on its professional production of goods and reduce the complexity in the structure. 

Increased use of computing resources: One of the painful question of the investment in resources (e.g. servers) is how long it will be fully depreciated, me how profitable investment or not, outdate technology or not. When using resources on the cloud, you do not have to care about this anymore.

Improved automation (IT staff less concerned about software updates).

Flexibility.

Allows IT to shift focus (innovation, R&D etc).

Risks bearing while applying the Technology into the work

Relies totally on network connectivity.

Problem in getting peripheral devices to work (printers, scanners etc).

Dependent on the storage provider.

Possibility that storage provider could close up shop (making it hard for the company to retrieve its data).

Adapting the Cloud Computing Techniques into the business environments

Cloud Computing is suitable for small organisations (Sosinsky, 2011, p17-19). The benefit of being able to access your data from anywhere with an internet connection; and the ability to replace occasional heavy expenditure on IT with regular and predictable operational expenditure (Anderson, 2010). Also, companies can use this technology in their daily operations.

Cost savings for organisations (Cloud service is paid incrementally): Enterprises will be able to cut costs for purchase, installation and maintenance of natural resources. Clearly, instead of having to send an expert to buy a server, server installation and maintenance of this server, you do not need to do anything in addition to accurately determine their resource needs and requirements. When businesses use Cloud Computing services, especially the Public Cloud, a very low initial investment costs. If businesses build a large-scale system for themselves, the huge investment costs (purchase hardware, power management, cooling systems, human resources, operating system, etc.). And such costly projects often need a lot of time to be approved. The construction of such a system also requires a lot of time. Now, thanks to Cloud Computing, everything has been service providers ready, now just rent that can be used immediately without the need to pay for the initial investment. Another factor reducing costs is that customers only pay for what they actually use (Usage-Based Costing). With the resources rented but not used (due to low demand), the client does not pay. This really is a huge benefit for businesses using Cloud Computing.

This disruptive change that is challenging today's organizations to take advantage of Cloud-based services, is proving a difficult pill to swallow for many organizations. They need support and advice to help them with both internal IT and business process transformation, in addition to the contractual advice to ensure they are approaching their Cloud opportunities in the right way to mitigate risk and maximize productivity advantages.

Legal issues – (data control, ownership, data distribution and data disposition).

Monopoly issues – Key players include: Sun, Microsoft, Amazon, Google.

Manageability – Integrating cloud technology with existing infrastructure and platforms.

Security - Possible security and privacy risks (sensitive data, hackers etc).

Conclusion

The improvement of technology offers enhancements for the business management, in term of reducing cost while improving the efficiency of the work. And the Cloud Computing is one of these fabulous technologies.

With the Cloud technology equipped at the organization, the cost for licensing, installing and maintaining significantly reduces due to the centralization of the software used, reduction of the hardware required, and shortening of the IT personnel needed (while relying on the service provider to do their job). In addition, the employees now had more options to work with, in both working location and terminal devices to connect to the Cloud, which increase the flexibility and mobility of the work, and ultimately can lead to the increasing in work effectiveness.

However, there were several factors that might cause serious troubles for the whole system that the management always need to address while deploying the Cloud service at the organization. Since the Cloud’s working environment is based on the network (either Intranet or Internet), a slow connection is the most obvious hindrance to the quality of services. Furthermore, the network nature of the Cloud make it less secured than the traditional computing system, since the chance of the company being attacked over the open network (e.g. the Internet) will be higher…

With all the pros and cons like that, the Cloud Computing is just like a Pandora Box, might either bring prosperity or misfortune to the business. How to use it effectively and efficiency is depend on the wisdom of the company management.