Cloud Computing

Introduction Information Technology (IT) has become a vital enabler for the modern global economy. Putting business applications online is no longer optional, but it has become an essential part of every business strategy today. Global commerce as it exists at present seems to be impossible without complex distribution systems with the help of technology.

One can undoubtedly say that business modules are either dependent or going to be reliant on IT tools and techniques. Management of IT resources is one of the most important areas for the organizations and cloud computing is the latest transformation in the same direction, which is basically the usage of computing resources (hardware and software) as a service over a network. This article provides an overview of the same along with its deployment and service models.

In addition, benefits and challenges with reference to cloud computing are explored. Indian as well as International market scenario has also been visualized.

What is Cloud Computing? National Institute of Standards and Technology (NIST) defines cloud computing as a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g. networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. Cloud computing is basically the use of computing resources (hardware and software) that are delivered as a service over a network.

Thus, Cloud Computing is simply IT services sold and delivered over the Internet. Economically, the main appeal of cloud computing is that customer ‘only using what they need’, and ‘only pay for what they actually use’. The cloud is the next stage in the evolution of the Internet. It provides the means through which everything from computing power to business processes to personal collaboration is delivered as a service wherever and whenever we need it.One of the most common example of cloud computing is web based e-mail services offered by various providers like Yahoo, Google etc. E-mail can be accessed on anytime anywhere basis without knowing that where the data is stored.

Deployment Models of Cloud Computing

The cloud computing environment can consist of multiple types of clouds based on their deployment and usage. These are given as follows:

_ Public Clouds – The public cloud is made available to the general public or a large industry group. They are administrated by third parties or vendors over the Internet, and services are offered on pay-per-use basis.

_ Private Clouds - This cloud computing environment resides within the boundaries of an organization and is used exclusively for the organization’s benefits. These are also called internal clouds. They are built primarily by IT departments within enterprises who seek to optimize utilization of infrastructure resources within the enterprise by provisioning the infrastructure with applications using the concepts of grid and virtualization.

_ Community Clouds – This is the sharing of computing infrastructure in between organizations of the same community. For example, all Government organizations within India may share computing infrastructure on the cloud to manage data. The risk is that data may be stored in the data of competitors.

_ Hybrid Cloud – It is maintained by both internal and external providers. It is a composition of two or more clouds (Private, Community or Public). They have to maintain their unique identity, but are bound together by data and application portability. With a hybrid cloud, organizations might run non-core applications in a public cloud, while maintaining core applications and sensitive data in-house in a private cloud.

Service Models of Cloud Computing The service models are dynamically changing as cloud providers come out with new offerings focused on The author is Executive Officer, ICAI ARTICLE January 2013 I The Chartered Accountant Student 11 being competitive, increase market share, each with the aim to becoming one-stop shop. Mainly, there are three Cloud Computing Service based models. These are given as follows:

_ Infrastructure as a service (IaaS) - It is the foundation of cloud services. It provides clients with access to server, hardware, storage, bandwidth and other fundamental computing resources. The service is typically paid for on usage basis.

_ Software as a Service (SaaS) - In this model, cloud providers install and operate application software in the cloud and cloud users access the software from cloud clients. The cloud users do not manage the cloud infrastructure and platform on which the application is running. This eliminates the need to install and run the application on the cloud user’s own computers simplifying maintenance and support.

_ Platform as a Service (PaaS) – In this model, cloud providers deliver a computing platform typically including operating system, programming language execution environment, database, and web server. Application developers can develop and run their software solutions on a cloud platform without the cost and complexity of buying and managing the underlying hardware and software layers.

Enterprises have to select the right service model based on their specific requirements. The selection has to be done considering various factors such as cost benefit analysis, relevant risks, security and controls and the criticality of the data and services. Typically, the enterprises would choose the model, which offers them the best savings with the required security. Benefits of Cloud Computing

Some of the key benefits of Cloud Computing are given as follows:

_ Reducing Capital Costs: By using the cloud technology, capital costs on hardware, software or licensing fees can be easily brought down.

_ Improved Accessibility: As discussed earlier, cloud offers improved accessibility on anytime, anywhere basis, which is the demand of the day.

_ Scalability and Flexibility: Scalability and flexibility are highly valuable advantages offered by cloud computing, allowing customers to react quickly to changing IT needs, adding or subtracting capacity and users as and when required and responding to real rather than projected requirements.

_ Reducing Expenditure on Technology Infrastructure: Cloud computing technology offers less expenditure as its fundamental principle is pay only for actual usage.

_ Improved Resource Utilization: Combining resources into large clouds maximizes utilization by delivering resources only when they are needed.

Challenges to Cloud Computing

Like any new technology, the adoption of cloud computing is not free from challenges. These challenges require immediate attention from research community to properly address them. Although, a little work has been accomplished but still a lot needs to be done in the concerned areas. Some of the most important challenges are as follows:

_ Security and Privacy: The key challenge to cloud computing is how it addresses the security and privacy concerns. As important data of the organization resides outside the organization, security assurance from the cloud services offering company is highly needed. Again, up to which level security is offered by them must be thoroughly examined by the clients.

_ Service Delivery and Billing: It is difficult to assess the costs involved due to the on-demand nature of the services. Budgeting and assessment of the cost becomes very difficult unless the cloud services provider has some good and comparable benchmarks to offer by adapting the related best practices and standards.

_ Interoperability and Portability: Businesses should have the flexibility of migrating in and out of the cloud. In addition, the facility of switching the service providers should also be there without any lock-in period. On the other hand, cloud computing services should also have the capability to integrate smoothly with the other technologies.

_ Legal: As the data in cloud computing may be stored in any part of the world, certain legal issues arise with the cloud computing, including ARTICLE 12 January 2013 I The Chartered Accountant Student trademark infringement, security concerns and sharing of propriety data resources based on various jurisdictions.

_ Reliability and Availability: Based on some case studies, it is found that some of the cloud services providers still lack round-the-clock service; this results in frequent outages. Therefore, it becomes very essential to monitor the services being provided using internal or third-party tools. It is vital to have plans to supervise usage, Service Level Agreements (SLAs), performance, robustness, and business dependency of these services.

_ Performance and Bandwidth Cost: As mentioned in the previous section that businesses can save money on hardware but for utilizing cloud based services, they have to spend more for the bandwidth. Although, there can be a low cost for smaller applications but it can be significantly high for the large database applications. Delivering intensive and complex data over the network requires sufficient bandwidth. All these aforementioned challenges require serious consideration and the possible mitigation mechanisms before adopting the technology.

References [1] Peter Fingar, Andy Mulholland & Jon Pyke: Enterprise Cloud Computing: A Strategy Guide for Business and Technology Leaders, Meghan- Kiffer Press, Florida, USA, April, 2010. [2] Michael Mille: Cloud Computing: Web-Based Applications That Change the Way You Work and Collaborate Online, Que Publishing, USA, 2009. [3] Nick Antonopoulos & Lee Gillam: Cloud Computing: Principles, Systems and Applications, Springer, 2010.

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