Faculty of Economics, University of Ljubljana

Information Technology Supervisor: Prof Dr. Tomaz Turk

Cloud Computing
Taiwo Korede Aladeojebi, 19511251 Introduction Information technology has come to be one of the most relied upon factor of production in organizations. Different organizations are adopting different kinds of information technology applications for competitive advantage, particularly in the current competitive business environment. Additionally, organizations are seeking ways of optimizing the use of information to optimize benefits. According to King (2008), since the introduction of IT, there have been different changes as well as developments. In the business world, information technology has enabled “almost enterprise” business applications. This refers to the situation where information technology applications are provided remotely by external service providers. This is one of the considerable changes that have taken place in the business world as far as information technology is concerned. Armbrust, et al. (2010) assert that various possibilities for organizations have arisen with the development and increase in use of computers and the internet. These developments have made business processes and applications simpler and less expensive. These have increased competencies in the business world by making it possible for professionals within the organization to concentrate on the core business functions. Smith (2009a) reveals that organizations are choosing to acquire computing as a service instead of a product. This is the rationale behind the development of cloud computing and its introduction into the world of business. This research seeks to bring an understanding of the different aspects of cloud computing. Background Information (History and Trends) The term cloud computing has been used as a metaphor for the internet. Cloud computing is founded on the symbol of the cloud, in the past it is used to represent the telephone network, and later to depict the internet symbolic representations of computer networks. This was utilized as a concept of the basic infrastructure that is represented. According to GodwinJones (2008), cloud computing did not come up as a well-thought-of plan. Rather, it emerged as a standard evolution of the general “adoption of virtualization, service-oriented architecture, autonomic, and utility computing” (Locke, 2008, p.167). Given the fact that it uses the fundamental idea of electric grid, the details are not revealed to the end user. The idea of cloud computing is traced back to the 1960s. This is the time when John McCarthy proposed that “computation may someday be organized as a public utility” (Smith,

The term cloud originates from telephony. the users are provided with services without having to necessarily understand the component devices or even the systems that are required in providing these services. the sameness with the theory of electric grid. University of Ljubljana Information Technology Supervisor: Prof Dr. Tomaz Turk 2009b. Another system that cloud computing shares attributes with is the client-server model. These companies switched traffic in order to balance use so as to use the whole bandwidth effectively.353). data. One of these systems is autonomic computing.169) as the “packaging of computing resources. the infrastructure supporting cloud computing. In such systems. Due to this. 2010).Faculty of Economics. Werbach (2011) asserts that the diagram of cloud was utilized in representing the differentiation between the role of the service provider and that of the user. The Challenge of the Computer Utility by Douglas Parkhill (Sobajic 1993). computation. This is because organizations providing telecommunication services began to offer Virtual Private Network services. such as computation and storage. This is where computer systems or resources are utilized for self-management. Other systems include mainframe computer systems and peer-to-peer. the user does not have to train in. loosely coupled computers acting in concert to perform very large tasks. According to Godwin-Jones (2008). In such situation. software. and shared resources are delivered to computer systems in the organization as a utility over a network. According to Smith (2009a). whereby a 'super and virtual computer' is composed of a cluster of networked. are well investigated in the title. The theory behind the development of cloud computing is borrowed from the one behind electric grid (Kyriazis. or be in control of.169) defines this as “a form of distributed and parallel computing. p. Gruman (2008) defines the term as the provision of computing as a service rather than a product. the idea behind cloud computing is to fulfill the .. Another system with similar attributes is grid computers. cloud computing shares attributes with various wellknown systems. Almost all the present attributes of cloud computing. and the use of various models in implementing it. This is any distributed system that distinguishes servers and clients. software. et al. p.” Utility computing is another system defined by Locke (2008. p. and storage media are made available for the organizational use in such a manner that the end-user does not have knowledge of the location or the structure of the system that is providing such services. Locke (2008.” Service computing is another one. which is the provision of software-as-a-service. Cloud Computing This is a term that has become extraordinarily common in the business world today. This is where there exists no central coordination of the connected computers. information access. According to Robinson (2010). such as electricity. as a metered service similar to a traditional public utility.

The software and data belonging to the organization are stored on servers at remote sites. delivery. and hybrid cloud (Gruman 2008). University of Ljubljana Information Technology Supervisor: Prof Dr. acquiring and training new employees. This is where the resources for computing are secured at remote data-center sites. this is a model of cloud computing that presents the concept from a traditional perspective.Faculty of Economics. private cloud. Google AppEngine. Windows Azure Service and recently iCloud from Apple.g Amazon Elastic Compute Cloud (EC). This paper will discuss four of the commonly used models: public cloud. Sun Cloud. In this model. or acquiring licenses for additional software. Public Cloud According to Farber (2008). and consumption system for IT services that are founded on internet protocols. This provider is usually off-the-site. Information resources and applications are delivered on a fine-grained and selfservice basis. Deployment Models or Types of Cloud Computing There are different deployment models or types of cloud computing. IBM Blue Cloud. This happens as though these services and applications are installed in PCs within the organization. Such services are offered by external providers through the internet that is accessible from Web browsers. This means an increase in the capacity or increasing capabilities without the requirement of investing in new infrastructure. Majority of cloud computing infrastructures are made of services that are offered through shared data center. This concept can be viewed as a by-product and outcome of the ease-of-access to remote services that are provided to the user through the internet. community cloud. legacy applications are offered via a screen-sharing technology. Weil (2011) suggests that cloud computing is an innovative addition. . At times. According to Smith (2009a). delivery of IT resources is done dynamically to the public. Subscriptions are received by a third-party service provider for the services that are then provided via Web-based applications over the internet. It involves provisioning of ardently scalable and generally virtualized services. E. Gruman (2008) defines legacy applications as the line-of-business applications that are currently accessible in slight client windows computing. They appear at a specified point of access in order to meet the needs of the organization. this usually comes in the form of Web-based resources or applications that users can access or consume through Web browsers. Tomaz Turk need for information technology in organizations more effectively.

private and community. build. Farber (2008) says that one of the limitations of the private cloud model is that users are meant to buy.Faculty of Economics. The models used in the integration remain as individual entities and provide the benefits of multiple implementation models (Farber. E. the delivery of information technology services and applications is under the control of a single service provider. different concerns are shared by the community like security. Generally. Any of the previously discussed three models. The management of the infrastructure through which these services and applications are provided can be internal or through the utilisation of a third-party service provider. A hallmark of commercial cloud computing applications is that users never need to purchase expensive software licenses themselves. Tomaz Turk Private Cloud In a private cloud.g Amazon EC2 Community Cloud In this model of cloud computing. Instead. From this perspective. this means that there is a lack of economic benefit behind the use of this model that is the rationale behind the implementation of cloud computing (Schofield. and jurisdiction. public. as Gozzi (2010) suggests. the cost is incorporated into the subscription fee. 2008). hosting and management of the infrastructure can be performed internally or externally. E. Hosting can also either be internal or external. the infrastructure through which the information technology services and applications are provided is used by different companies from a specific community. there is usually an integration of two or more of the previously discussed models. A cloud application eliminates the . effectiveness. Cloud computing can be visualised as a pyramid consisting of three sections: Cloud Application This is the apex of the cloud pyramid. University of Ljubljana Information Technology Supervisor: Prof Dr.g government organization Hybrid Cloud In the hybrid type of cloud computing. can be integrated and utilised in cloud computing based on the requirements of the company. 2008). The integrated model can be used by a single or more firms based on the types of models that are used in the hybrid. where applications are run and interacted with via a web browser. it can be argued that users do not get the actual benefits of cloud computing as far as lower up-front capital and hands-on management are concerned. hosted desktop or remote client. Just as in private cloud computing model. performance. and manage the infrastructures by themselves. In community cloud computing.

thus removing the burden of software maintenance. A cloud computing platform dynamically provides. The platform typically includes databases. depending on the customer’s preference. Three Service (Delivery) Models Software as a Service (SaaS) – Applications delivered as a service to end-users typically through a Web browser. The infrastructure includes servers. Hundreds of ISVs have built their SaaS offering on top of the Oracle Platform for SaaS. Oracle CRM On Demand is an example of a SaaS offering that provides both multi-tenant as well as singletenant options. Cloud Platform The middle layer of the cloud pyramid. Disk and other elements. These are then interlinked with others for resilience and additional capacity (think grid). deploy and manage SaaS applications.Faculty of Economics. configures. Oracle offers a comprehensive PaaS product offering for . which can be scaled in terms of CPU. Oracle also offers enterprise-grade enabling technology to Independent Software Vendors (ISVs) to build their own SaaS offerings. self governed environments. middleware and development tools. Platform as a Service (PaaS) – An application development and deployment platform delivered as a service to developers who use the platform to build. ranging from horizontal enterprise applications to specialized applications for specific industries. ongoing operation and support. such as Java or Python. Cloud Infrastructure The foundation of the cloud pyramid is the delivery of IT infrastructure through virtualisation. Tomaz Turk need to install and run the application on the customer's own computer. reconfigures and de-provides servers as needed to cope with increases or decreases in demand. where many services pull together to deliver an application or infrastructure request. PaaS offerings are often specific to a programming language or APIs. This in reality is a distributed computing model. A virtualized and clustered grid computing architecture is often the basis for PaaS offerings. University of Ljubljana Information Technology Supervisor: Prof Dr. Virtualisation allows the splitting of a single physical piece of hardware into independent. which provides a computing platform or framework as a service. all delivered as a service via the Internet. Oracle calls this enabling technology the Oracle Platform for SaaS. and also consumer applications such as Web-based email. “farms” or "cloud centres". There are hundreds of SaaS service offerings available today. because grid provides the necessary elastic scalability and resource pooling. networks and other hardware appliances delivered as either Infrastructure “Web Services”. RAM.

networking. Tomaz Turk public cloud service providers as well as enterprise customers to build their own public clouds. common with implementation of new technologies in an organization. Particularly for the private cloud computing model. . 2008). is eliminated (Smith. 2009a). Besides. Additionally. It is also possible to upgrade the memory without affecting the configuration. but Oracle provides hardware and software products to other IaaS providers to enable their public cloud services. management and operating system software are also part of IaaS as well. 2009a). the organization is in a position to get to select the server. and storage needs. cloud computing can be customized to the needs of the organization. This is because of the idea that with a conventional dedicated server stack managed internally or by a third-party service provider. This means that resources are configured and reconfigured to the specific needs of the organization. University of Ljubljana Information Technology Supervisor: Prof Dr. et al.Faculty of Economics. Oracle calls this the Oracle PaaS Platform (more on this later in this paper). this is in itself a substantial benefit to the organization. resistance to change. The skills that are necessary in the organization are related to the fundamental principles of cloud computing and how it is used. and networking hardware delivered as a service. acquire them and utilize the specific configuration for three to five years. storage. The need to train employees on the structures and infrastructures that provide services to the organization is eliminated through the implementation of cloud computing. there is no need for the company to keep on training the users even if the aspects of the underlying infrastructure changes (Bernstein. which increases information technology’s prevailing capabilities (Gruman.. this is an economic benefit of cloud computing. Benefits of Cloud Computing Given the fact that the underlying infrastructure is hidden from the end user. Despite of the initial cost of implementation. This enables the organization the flexibility of utilizing the services and applications at its own convenience. An example of IaaS is Amazon’s Elastic Compute Cloud (EC2) and Simple Storage Service (S3). Oracle does not offer IaaS cloud services. the availability of the three models and the flexibility of use is a benefit to organizations (Smith. so virtualization. and also offers the same technologies to enterprises for private use. The concept includes any subscription-based or pay-per-use service. This infrastructure hardware is often virtualized. The company is also saved the need to acquire or train information technology experts to manage computing systems. 2009). Additionally. Infrastructure as a Service (IaaS) – Compute servers. the elimination of the need for training. once the initial training is carried out. with the obscured aspect of cloud computing.

particularly with the use of public. The requirement for new skills and competencies in the organization is an additional cost for the organization. According to Camarinha-Matos and Afsarmanesh (2008). offering of innovative technology. Why Companies Should Adopt Cloud Computing Cloud computing offers organizations a promise of flexibility in services for IT systems that put business at the center of the process. In private cloud computing. the organization is likely to save remarkably little in terms of cost. Any organization that adopts cloud computing without the knowledge of the effects of the transformation can be caught by surprise in terms of performance and IT competencies. community. The role of various personnel in the company changes thus affecting the work of the entire organization. the main factors behind the need for organizations to implement cloud computing are the saving on cost. . a need for innovative ways emerges. improved control of IT infrastructure. Regardless of the fact that cloud computing saves on cost in the long run. Smith (2009a) suggests that it is general knowledge that any new strategy implemented in an organisation brings in new implications and changes how things are conventionally. The move to the use of cloud computing changes the way people operates as well as the skills and abilities required in the organization. and hybrid cloud-computing models. (2009) suggest that when there is no proper planning for the implementation of cloud computing. Tomaz Turk Limitations of Cloud Computing The promise of cloud computing cannot be realized overnight since people. Because of the benefits offered by cloud computing. According to Zissis (2010). it is becoming extremely attractive to organizations seeking to optimize on productivity. it is possible for the company to gain and maintain a competitive advantage. et al. start-up cost could be a lot for the organization. This increase in cost makes many companies shy away from private cloud computing. and improved agility and flexibility in the organization. University of Ljubljana Information Technology Supervisor: Prof Dr.Faculty of Economics. The cost of management might be higher as compared to the other three cloud models. the effects on the organization can be destructive. The issue of information security is another limitation of cloud computing. this is a crucial issue for many organizations because they tend to choose these models as opposed to private cloud computing because of the cost. Given the fact that with cloud computing it is possible for the employees within the organization to concentrate on the core business purposes. technology. Bernstein. Besides the cost of implementing the new strategy. and processes are necessary in supporting the move to cloud computing.

Training is particularly noteworthy in equipping the employees and managers with skills regarding the basic principles of cloud computing (Gruman. Additionally. University of Ljubljana Information Technology Supervisor: Prof Dr. the journey toward the implementation of cloud computing is not a straightforward one. From this study. Conclusion Cloud computing is emerging as the way various companies are moving to maximize on production and obtain competitive advantage.Faculty of Economics. each of the four models has its unique benefits that a company should consider before implementation. Reference List . software and data are delivered to computers and other systems as a utility over a network—is proving to be beneficial to organizations in many ways. This is because of the possible effects of such a move especially without sufficient planning. The training should be carried out by experts who are knowledgeable in the principles of cloud computing. where shared resources. 2008). more research is necessary to address the issue of the general implications of cloud computing on the organization. human. it is unwise for any organisation to implement cloud computing. It is therefore important for organizations seeking to implement cloud computing to realize that this move is not an information technology issue alone. the negative implications that can result require care to be taken before deciding to invest in it. and operations. The four main types of cloud computing implementation models available for companies to choose from allow a kind of flexibility that is tremendously beneficial. The provision of computing as a service rather than a product—that is. 2010). Without proper considerations and planning. Regardless of the benefits of cloud computing. as suggested by Defelice (2010). and managerial IT competencies implications. Tomaz Turk Recommendation on Small IT Businesses Regardless of the benefits offered. 2010). Because of the technical. It is also necessary to prepare the employees and take them along in the journey. care should be taken when deciding on using this technology for business. Investment in cloud computing means investment in the development of information technology competencies in the organisation if the implementation has to be successful (Zissis. It is an investment that requires the involvement of the entire organization (Defelice. its people. Performing a campaign to inform all the stakeholders should be the initial step.

com/8301-13953_3-9977049-80. On reference models for collaborative networked organizations. M.. Bernstein.. R. A Review of General Semantics. 53 (4). University of Ljubljana Information Technology Supervisor: Prof Dr. IEEE Computer Society.50-58. 2008. A. H. Learning & Technology. G. 2008. and Morrow. The Metaphor of Cloud Computing.com/d/cloud-computing/what-cloud-computing-really-means031> [Accessed 16 December 2011]. D. 2008.html> [Accessed 16 December 2011]. Emerging Technologies of Elastic Clouds and Treebanks: New Opportunities for Content-Based and Data-Driven Language Learning. [online] Available at: <http://www. doi:10. D.infoworld. R. Blueprint for the Intercloud – Protocols and Formats for Cloud Computing Interoperability. [online] Available at: <http://news. 12. M.. Defelice. K. E. et al.2453-2469. Communication of the ACM. Language.M. pp. The new geek chic: Data centers.2009. Ludvigson. Farber. . 2008.55. Tomaz Turk Armbrust. Sankar. S. A view of cloud computing. Godwin-Jones. Gozzi.. and Afsarmanesh. Gruman... International Journal Production Research. What cloud computing really means. Journal of Accountancy. 2010.. pp.. 67 (2). 2009.Faculty of Economics. 2010. 210. Diamond. L. 46 (9).cnet. Camarinha-Matos. Cloud Computing: What Accountants Need to Know.1109/ICIW.... 2010.

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thinkgrid. Werbach. Duke Law Journal. 60 (4). Addressing cloud computing security issues. K. 38 (1). T H E Journal (Technological Horizons in Education).com Information Technology Supervisor: Prof Dr.. D. 2010. Future Generation Computer . Managing Assets in the Cloud: Keeping Track of an Ever-Expanding Amount of Technology Assets Can Be a Daunting Task for an Understaffed District IT Department. Tomaz Turk Weil. Zissis. 2011. 2011.. M. University of Ljubljana http://www. The Network Utility.Faculty of Economics.L.. Two Schools Turn to the Cloud for Assistance.

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