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,

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

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

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

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

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

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

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

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38 (1). Zissis. The Network Utility.com Information Technology Supervisor: Prof Dr. 2011. 60 (4).. Tomaz Turk Weil. Future Generation Computer . Addressing cloud computing security issues.L. 2010. Duke Law Journal. K. University of Ljubljana http://www. T H E Journal (Technological Horizons in Education). Werbach. M. Two Schools Turn to the Cloud for Assistance. 2011.Faculty of Economics. D. 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.thinkgrid...

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