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,

computation. 2010). are well investigated in the title. the user does not have to train in. data.. cloud computing shares attributes with various wellknown systems. Almost all the present attributes of cloud computing. and shared resources are delivered to computer systems in the organization as a utility over a network. p. et al. Gruman (2008) defines the term as the provision of computing as a service rather than a product.169) defines this as “a form of distributed and parallel computing. This is where there exists no central coordination of the connected computers. as a metered service similar to a traditional public utility. This is because organizations providing telecommunication services began to offer Virtual Private Network services. This is where computer systems or resources are utilized for self-management.Faculty of Economics.353). 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. University of Ljubljana Information Technology Supervisor: Prof Dr.169) as the “packaging of computing resources. Locke (2008. 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. The term cloud originates from telephony. In such situation. such as electricity. Another system that cloud computing shares attributes with is the client-server model. software. The theory behind the development of cloud computing is borrowed from the one behind electric grid (Kyriazis. the infrastructure supporting cloud computing. According to Robinson (2010). such as computation and storage. loosely coupled computers acting in concert to perform very large tasks. Cloud Computing This is a term that has become extraordinarily common in the business world today. This is any distributed system that distinguishes servers and clients. the idea behind cloud computing is to fulfill the .” Service computing is another one. software. information access. According to Smith (2009a). One of these systems is autonomic computing. p. or be in control of. These companies switched traffic in order to balance use so as to use the whole bandwidth effectively. the sameness with the theory of electric grid.” Utility computing is another system defined by Locke (2008. Tomaz Turk 2009b. Another system with similar attributes is grid computers. 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. According to Godwin-Jones (2008). p. which is the provision of software-as-a-service. and the use of various models in implementing it. The Challenge of the Computer Utility by Douglas Parkhill (Sobajic 1993). Other systems include mainframe computer systems and peer-to-peer. Due to this. whereby a 'super and virtual computer' is composed of a cluster of networked. In such systems.

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

Instead. 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. build. Cloud computing can be visualised as a pyramid consisting of three sections: Cloud Application This is the apex of the cloud pyramid. hosted desktop or remote client. A hallmark of commercial cloud computing applications is that users never need to purchase expensive software licenses themselves. From this perspective. In community cloud computing. can be integrated and utilised in cloud computing based on the requirements of the company. A cloud application eliminates the . 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. E. private and community. public. Any of the previously discussed three models. hosting and management of the infrastructure can be performed internally or externally. and jurisdiction. where applications are run and interacted with via a web browser. the delivery of information technology services and applications is under the control of a single service provider. University of Ljubljana Information Technology Supervisor: Prof Dr. 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. effectiveness. different concerns are shared by the community like security. performance. there is usually an integration of two or more of the previously discussed models. Tomaz Turk Private Cloud In a private cloud. Just as in private cloud computing model. and manage the infrastructures by themselves. 2008). Farber (2008) says that one of the limitations of the private cloud model is that users are meant to buy.Faculty of Economics. the cost is incorporated into the subscription fee. 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. E. Generally. as Gozzi (2010) suggests.g government organization Hybrid Cloud In the hybrid type of cloud computing.g Amazon EC2 Community Cloud In this model of cloud computing. the infrastructure through which the information technology services and applications are provided is used by different companies from a specific community. Hosting can also either be internal or external. The models used in the integration remain as individual entities and provide the benefits of multiple implementation models (Farber.

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

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

technology. (2009) suggest that when there is no proper planning for the implementation of cloud computing. particularly with the use of public. The role of various personnel in the company changes thus affecting the work of the entire organization. it is possible for the company to gain and maintain a competitive advantage. The move to the use of cloud computing changes the way people operates as well as the skills and abilities required in the organization. In private cloud computing. Tomaz Turk Limitations of Cloud Computing The promise of cloud computing cannot be realized overnight since people. This increase in cost makes many companies shy away from private 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. et al. . 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. The issue of information security is another limitation of cloud computing. Bernstein. The requirement for new skills and competencies in the organization is an additional cost for the organization.Faculty of Economics. According to Camarinha-Matos and Afsarmanesh (2008). improved control of IT infrastructure. University of Ljubljana Information Technology Supervisor: Prof Dr. and hybrid cloud-computing models. a need for innovative ways emerges. Besides the cost of implementing the new strategy. and processes are necessary in supporting the move to cloud computing. it is becoming extremely attractive to organizations seeking to optimize on productivity. the main factors behind the need for organizations to implement cloud computing are the saving on cost. According to Zissis (2010). community. the organization is likely to save remarkably little in terms of cost. Given the fact that with cloud computing it is possible for the employees within the organization to concentrate on the core business purposes. The cost of management might be higher as compared to the other three cloud models. 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. 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. the effects on the organization can be destructive. and improved agility and flexibility in the organization. Because of the benefits offered by cloud computing. start-up cost could be a lot for the organization. Regardless of the fact that cloud computing saves on cost in the long run. offering of innovative technology.

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

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