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Running head: CLOUD COMPUTING 1

Analysis of Cloud Computing Risks and Benefits

Christopher D. Hartford
Excelsior College

Many normal computer users are familiar with the term cloud computing but
dont know necessarily what it entails. There is yet to be an established definition of the
term, but rather many different facets organized together show what the customer is
provided. Millions of users use cloud based technology on any given day considering
the popularity of social media and other internet based applications. The benefits seen
by businesses are many and varied, but are similar in scope to most out-sourcing
provided. Many businesses have limited or no cloud presence due to various concerns.
Lack of trust, security, and loss of data are some of the reasons. The advancement of
cloud technology has led to increased knowledge of these concerns and more attempts
to put them to rest.
Keywords: Cloud, Online Infrastructure, Business Technology

Analysis of Cloud Computing Risks and Benefits
Watching television commercials and listening to the radio barrages the average
person with many phrases and terms that they may not be familiar with. An up and
coming term used quite often is the Cloud. Many regular consumers have heard of it
but consider it to simply be a fancy term for the internet or maybe a server used by a
company. With it becoming such a common term it is time to define what Cloud
computing is and why it has grown so quickly. Also, the determination needs to be
made of why many businesses are hesitant of using the Cloud and what can be done or
has been done to allay their fears.
What Cloud computing is depends on who is asked and what they use it for. Stair
states that it is a computing environment where software and storage are provided as
an Internet service and accessed with a Web browser (Stair, 2012, p. 178). Kalyvas,
Overly, &Karlyn (2013a) find six different definitions across a broad range of sources.
However the many different definitions lead to confusion about what it really is as
Kalyvas et al. assert. However, since a definition is required in order to sufficiently study
something they decide to attribute the following high level characteristics to a cloud
computing service delivery model: 1. delivery over the Internet (cloud), 2. software,
platform, or infrastructure resources provided as services, 3. scalability on-demand, and
4. utility and/or subscription billing ( i.e. , payment based on the customers actual use
and/or a period of time) (Kalyvas, Overly, &Karlyn, 2013a, p. 9).
The end user is very familiar with what the Cloud provides if they arent aware of
an actual definition. Social media sites make extensive use of Cloud computing.
Facebook, Twitter, and Vine are all examples where the information is held in the Cloud.
The new generation of video gaming consoles allows users to download games off the
Cloud instead of having to go to a store. Virtually all web based email systems used
today use it as well. Individuals can upload files they want to be secure to the Cloud
using applications such as Dropbox, Google Drive, and Microsofts Skydrive.
Cloud computing offers many advantages to businesses as well, including
reduction of cost and flexibility. The customer saves money due to the reduction in up
front investment in new infrastructure, new software licenses, implementation services,
and personnel hiring and/or training (Kalyvas et al., 2013a, p. 9). Less equipment and
manpower also relates to less physical space necessary for the customer to have the
same business, therefore reducing property expenses such as property fees, heating,
water, power, etc. Many customers are also attracted to the fact that since a facet of
business is being handled by outsourced contractors, they no longer have to plan,
purchase, install or otherwise maintain IT infrastructure. They see benefit in the
flexibility of (a) being able to quickly set up and implement an IT solution, (b) being able
to access services from anywhere at any time via the Internet, and (c) being able to
quickly add and remove IT resources on-demand (Kalyvas et al., 2013a, p. 9). This
allows the Cloud customer to respond to their own business needs and market.
Effectively Cloud computing allows the customer to deal with their area of expertise and
leave IT to the IT experts.
Microsoft has entered into the Cloud computing market focusing on small and
medium businesses. cloud levels the playing field for SMBs, helping them compete in
todays quickly changing business environment, by spending less time and money on IT
and more time focused on their most important priority growing their businesses
(Study, 2012, para 2). So, the benefits seen by large businesses are also seen by
smaller ones, but the ratio of benefit is greater for the small business since they have
less capital to start with. Since so many smaller businesses have less capital they want
to be able to do more with what they have. Many buy some smart phones and tablets
and that is their IT department. The Cloud allows these smart devices to operate
multiple services, one vendor (Study, 2012). Now they have a greater potential for
success and expansion.
So, there must be reasons why not every business has leapt onto the Cloud for
all their business needs. The most often quoted roadblock for implementation is security
(Columbus, 2013, para 9). This is what businesses perceive to be the reason not to use
the Cloud; however Kalyvas et al. (2013a) assert that the risk involved depends on the
data sensitivity and criticality of service (p. 11). They continue that the areas where
businesses should look the most closely are Service Availability and Continuity and
Service Levels, both of which can be covered in a contract between the provider and
customer. Availability and continuity relate to the actual ability to retrieve data. Data
could be unavailable due to mechanical malfunction, natural disaster, withholding of
data by provider due to monetary dispute, or the provider ceasing to exist. Service
levels provided concern the actual service paid for. Response to loss of data or
unavailability, downtime for maintenance, and response to errors made. The need to
ensure all of these are up the criteria expected by the customer has kept many
businesses out of the Cloud.
As with any portion of their work, businesses conduct due diligence in the
choice of Cloud computing (Kalyvas, Overly, &Karlyn, 2013b, p. 20). Customers make
contracts for Cloud computing with providers which allow for litigation and culpability for
loss of data or system downtime. Protection against security vulnerabilities, data
backups, use of data, data conversion, insurance, indemnification, liability, fees, and
warranties are all areas which Kalyvas et al. suggest be included on contracts between
providers and customers (2013b). The city of L.A. formed a $75 million contract with
Google for cloud computing which included, penalty if a security breach
occursresponsible for any release of data in violation of a nondisclosure
agreementdata must be encrypted, stored on a dedicated server, and kept in the
U.S. (Stair, 2012, p. 179). While security is mentioned repeatedly by many businesses,
the real issue is trust. All computers can be infiltrated by outsiders and most customers
have the conception that their system is the most secure, the nothing bad could
happen to me mentality. However, many overlook the fact that the provider of Cloud
computing is the system expert, and should therefore have more stringent security on
their servers than the ice cream store they provide service to. Only about 20 percent of
SMBs (small-medium business) believe that data is less secure in the cloud Thirty-six
percent overall and 49 percent of larger SMBs actually think that data is as secure in the
cloud... (Study, 2012, para 7).
Cloud computing is on the rise and will be a $19.5 billion enterprise by the year
2016 (Columbus, 2013, para 3). As it is proven to be even more safe and reliable, trust
will increase. Much as the automobile made the horse and buggy obsolete to all but a
few, cloud computing will make on site IT superfluous and will continue to change the
way business is performed.

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for Managing Cloud Computing Risk--Part I. Intellectual Property & Technology
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Kalyvas, J., Overly, M., & Karlyn, M. (2013b). Cloud Computing: A Practical Framework
for Managing Cloud Computing Risk--Part II. . Intellectual Property & Technology
Law Journal, 25(4), 19-27. Retrieved September 20, 2013, from
Stair, R. M., & Reynolds, G. W. (2012). Fundamentals of information systems (6th ed.).
Boston: Course Technology/Cengage Learning.
Study: Cloud Usage Surging, Leveling Playing Field for Small and Midsize Businesses.
(2012, March 28). Microsoft. Retrieved September 20, 2013, from