Every few years, it seems, a new concept emerges as the next great leap in technology in the world of information technology
Cloud computing is a current concept in the IT world that fits that description. However, before deciding to embrace cloud computing, a company must ensure that it understands all of the implications of this new offering. As with most technologies, there are numerous benefits to be gained; however, in addition to understanding the benefits, the business risks must also be evaluated. When conducting this evaluation, it is critical to consider not only the organization's short-term needs but also its long-term objectives and goals. In recent years, the Obama administration has pushed for all federal agencies to investigate cloud computing to determine whether it will benefit them. "The Federal CIO Council, with help from the Office of Management and Budget (OMB) and the Federal Chief Information Officer (CIO), Vivek Kundra, set up the Cloud Computing Initiative to meet the President's goals for cloud computing."5 With the recent push from the current administration, cloud computing is expected to grow by leaps and bounds over the next few years. According to some studies, "cloud services will reach $44.2 billion in 2013, up from $17.4 billion today, according to research firm IDC." 4 This paper will lay out the factors that an organization should consider before deciding whether or not to use cloud computing at this time.
Cloud Computing Overview:
"Cloud computing is a model for providing easy, on-demand network access to a shared pool of configurable computing resources (like networks, servers, storage, applications, and services) that can be set up and taken down quickly with little management work or help from the service provider." 2 Cloud computing can be thought of as "leasing vs. owning" or "operational expense vs. capital expense."
To better understand the cloud computing concept, consider a more familiar concept: paying for electricity. A household or business uses a certain amount of electricity each month, which is monitored by a company and billed to the consumer based on their usage. Non-cloud computing would be consistent if each household had its own power source; there is no central power source that households use. If, as is typically the case, households obtain their power from a centralized power source (e.g., a power plant), this would be analogous to utilizing a cloud, with many users sharing a resource to meet their independent needs. Using this simple example, the cloud is like a power plant in that customers only pay for the infrastructure or software they use.
Some experts may disagree, but cloud computing is, in many ways, similar to how computers were used when they first hit the market. Computers (and associated facilities) were extremely expensive when they first became available and were only owned by a few select organizations such as universities or the government. Few people had the knowledge to support an in-house computing facility. As a result, businesses would lease time on computing resources provided by a small number of providers, only purchasing what they needed for the project at hand. In a similar model, cloud computing introduces the concept of purchasing resources as needed, and the resources, like in the past, can be accessed from a remote location. The main things that set cloud computing vendors apart are the quality of service and the range of services they offer.
The National Institute of Standards and Technology (NIST) acts as a guide to assist government agencies in achieving cloud computing. "The NIST cloud model encourages availability and is made up of five essential characteristics, three service models, and four deployment models." 2 Each of these parts will be talked about in more detail in this paper.
Models of Development:
Before determining whether cloud computing is a good fit for a specific organization, the general concepts of cloud computing must be understood. A cloud environment is made up of a variety of different deployment models as well as cloud applications. There are four types of cloud deployment models: public cloud, community cloud, private cloud, and hybrid cloud. Each cloud deployment model has advantages and disadvantages depending on the specific case for which it is being considered. This section gives a quick overview of each deployment model so that you can choose one to move forward with cloud implementation.
The Public Cloud
"Made available to the general public or a large industry group and owned by a cloud service provider" 2
A public cloud is owned by a third-party vendor who sells or provides free cloud services to the general public. A public cloud is the quickest to set up within an organization, but it also has limited transparency and customization options.
The Public Cloud
"Used by a number of organizations and helps a certain group of people with similar problems." 2
A community cloud is an architecture formed when a group of organizations join forces to share resources. A community cloud is similar to a public cloud, but only a limited number of organizations will be permitted to use it. In comparison to the public cloud, it will be more expensive because it will be used by a smaller group of organizations and all infrastructure must be established. A community cloud is a great choice for a group of organizations, like a group of federal agencies, that want to share resources but still have more control over security and insight into the cloud itself.
Personal Cloud
"Only worked for one organization."
A private cloud is one that is built to support a single, small organization. Some people question whether a private cloud should even be called a cloud, since its infrastructure and management stay within the organization.
Cloud Hybrid
"A combination of two or more clouds (private, community, or public) that remain distinct entities but are linked by standardized or proprietary technology that enables data and application portability."2
Some resources in a hybrid cloud are managed by a public cloud environment, while others are managed internally by a private cloud. This is typically used by an organization that wants the scalability features of a public cloud but wants to keep mission critical or private data internal to the organization.
Models of Service:
Aside from the platform on which a cloud will be deployed, there are numerous cloud applications. Software as a service (SaaS), platform as a service (PaaS), and infrastructure as a service (IaaS) are the three types of cloud services. The ideas behind the different kinds of cloud models are explained below.
SaaS (Software as a Service):
"delivers software over the internet without the need for customers to install and run applications on their own computers."
Customers can use SaaS applications to complete business processes via the internet. SaaS is not a new concept; for example, "Salesforce.com has been providing on-demand software for customers since 1999." 6 The benefit of SaaS is that the software is run from a single, centralized location, allowing it to be accessed from anywhere via the internet. Another advantage of centralizing software management is that patches and updates only need to be applied once, eliminating the time-consuming need to perform software updates on each machine. Finally, because SaaS is generally "on demand," an organization does not have to commit to enterprise licenses.
PaaS (Platform as a Service):
"Provides a computing platform and/or solution stack as a service, frequently consuming cloud infrastructure, and supporting cloud applications." 2
PaaS is a platform that helps to provide an environment in which a user can use the cloud to develop new applications without having to purchase software or infrastructure in-house. The consumer will have control over the applications running in the cloud, but not over the infrastructure on which they are running. In essence, PaaS gives a company "everything it needs to build and deliver cloud-based Web apps and services."3
IaaS (Infrastructure as a Service):
"Provides computer infrastructure, typically platform virtualization environment, as a service; an evolution of virtual private server offerings."
IaaS makes use of the cloud to provide infrastructure that would otherwise have to be purchased by a single organization to run an organization's IT infrastructure. Servers, memory, and storage are all part of the infrastructure, allowing a customer to scale up or down as needed. Customers can then use the infrastructure to run their own software with only the resources that are required at any given time. Previously, businesses would frequently have to purchase massive infrastructure to support a periodic spike in resource demand, leaving servers and networks idle for the majority of the remaining time. IaaS prevents resource waste by utilizing only what is required at any given time. Customers have control over the operating systems and applications, but they don't manage the cloud infrastructure.
The Benefits and Drawbacks of Cloud Computing:
Now that the fundamental concepts of cloud computing have been grasped, an organization must consider all of the effects that the cloud will have. As you might expect, there are a number of things that an organization needs to think about before deciding if cloud computing is the best way to go.
Advantages:
There are numerous advantages to using cloud computing. The concept of economies of scale underpins cloud computing. The great thing about the cloud concept is the potential cost savings for a small startup, a large company, or even an entire federal agency.
Cloud computing eliminates the typical high up-front cost that businesses often cannot afford, enables "infinite" resources on-demand, and allows companies to pay for resources as they are used. It also gets rid of the need for special facilities and highly trained IT staff, as well as the need to upgrade hardware and software all the time as technology changes and business needs change.
In general, cloud computing should reduce costs by allowing businesses to pay for only the resources they require. Many businesses do not know what the demand for their IT infrastructure will be, which previously meant that businesses either overbought servers or were overwhelmed by demand that could not be handled, resulting in customer loss or service degradation. In either case, there is a negative impact because money was wasted on unnecessary hardware and/or potential sales were lost.
Software maintenance can be just as expensive for businesses as the initial purchase. Software updates and backups are performed using cloud computing, eliminating the need for the organization to spend time and money on these activities. This alleviates many of the technical burdens that are frequently placed on businesses and allows them to focus on their core competencies while still gaining the benefit of having the most up-to-date version of software.
Cloud computing enables a business to operate in an elastic manner. A project, consumer demand, or operational need can cause resources to be scaled up or down. The elasticity provided by cloud computing enables projects to proceed in an appropriate manner without the time-consuming and costly delays associated with the procurement of hardware and software. Resources can be provisioned and de-provisioned quickly, resulting in a lower investment cost.
The use of the cloud is regarded as an environmentally friendly strategy. There are currently a large number of server farms in operation to serve individual organizational needs. Using cloud computing, a single server farm can support a large number of different entities. This could reduce the need for power, lower emissions, and make it easier to get rid of old electronics.
Disadvantages:
A company may believe that cloud computing is unquestionably the way to go, but there are a number of concerns that must be addressed before implementing cloud computing. The main concerns with cloud computing are security, privacy, dependability, and cost.
Security is by far the most common reason given by organizations for not adopting cloud computing. Many organizations wonder, "Who would trust their critical data somewhere?" The amount of security control that an organization has depends on the type of cloud structure that is used: private, public, or community. A private cloud has the most security control, and a public cloud has the least. While a cloud environment may be just as secure as a non-cloud environment, there is limited transparency in the cloud, which heightens security concerns. Along the same lines, many organizations are concerned about the lack of privacy that a cloud environment may provide. The cloud's third-party provider could get access to a company's sensitive information, which could lead to a privacy breach.
Many organizations are concerned about reliability; having a service down for even a few minutes per year could be very costly or even dangerous. The cloud removes reliability control from the organization and places it in the hands of the cloud vendor. Setting up service level agreements with cloud vendors is important to make sure that both parties agree on the requirements for reliability up front.
There are reporting laws in some organizations, particularly the government, that make a cloud option "not an acceptable solution due to government regulations such as Sarbanes-Oxley and the Health and Human Services Health Insurance Portability and Accountability Act (HIPPA)." 1 There are also many regulations that prevent sensitive data from being transmitted beyond a nation's borders. Cloud computing farms are typically built in locations with the lowest possible cost, often outside the borders of the customer's country. Clouds are being set up to solve this problem, but as a result, it will cost more to use a cloud vendor.
While the "benefit" section mentioned how cloud computing can help you save money, this is not always the case. The initial cost of using the cloud will be lower, but the lifetime costs due to the ongoing expense of paying for service may be much higher. Finally, there is always the risk that the company selling cloud services will go out of business. Most cloud applications from one provider don't work with clouds from other providers. This makes it hard for an organization to switch providers if it needs to.
Implementation of the Cloud:
The first step in deciding whether or not to implement a cloud within an organization is to determine whether or not the cloud is the right fit. Cost, time, risk, benefits, and interoperability must all be considered in the proper analysis. The cloud environment can be a game changer for a specific organization, but it is not a one-size-fits-all solution. If an organization's primary needs are flexibility and scalability, the cloud is most likely the best solution. Cloud computing may be a viable IT solution for organizations with high security and privacy concerns, but an in-depth analysis of the tradeoffs is required. The length of time it will take to commission an application or infrastructure should be considered when deciding whether the cloud is an appropriate model. Because the infrastructure does not need to be procured, the cloud is likely an excellent candidate for a short-term project. Because demand fluctuates so much, cloud computing may still be a very viable option for long-term implementations. In this case, if demand is steady, it may be better to buy the hardware instead of using the cloud, since cloud computing usually costs more per transaction.
After determining that a cloud environment is the best fit, the cloud layer to be implemented must be determined: SaaS, PaaS, or IaaS. Each of the various layers raises entirely different questions. After choosing the layers, you have to decide what kind of platform the cloud will run on: public, community, private, or hybrid.
It is critical to consider the entire lifecycle cost of cloud implementation. Without a doubt, the initial cost of implementing a cloud will be lower, but because costs are paid on a per-use basis, the overall cost of a cloud could potentially be higher. When developing a cost estimate for establishing an IT infrastructure without cloud computing, it is critical to consider costs other than the initial purchase of hardware and software. Cloud computing, particularly public cloud computing, reduces costs for updates and patches, maintenance, and staff reductions, all of which must be considered when conducting a fair comparison. Simply put, the opportunity cost of moving to the cloud must be calculated, and a decision must be made based on the needs of the organization.
Summary:
To summarize, cloud computing has the potential to transform how businesses view and address their IT needs. As the private and public sectors look for ways to cut costs, cloud computing is an option that should be considered. In general, the cost of this type of infrastructure will be lower, but at the expense of customization and security control in the organization's IT structure. If an organization looks into all of the options and things to think about in this paper, it will be in a good position to make an informed decision about cloud computing for its current and future needs.