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,

Faculty of Economics. According to Godwin-Jones (2008). the user does not have to train in. Other systems include mainframe computer systems and peer-to-peer. p. 2010).169) as the “packaging of computing resources. the idea behind cloud computing is to fulfill the . which is the provision of software-as-a-service. or be in control of. The Challenge of the Computer Utility by Douglas Parkhill (Sobajic 1993). the infrastructure supporting cloud computing. University of Ljubljana Information Technology Supervisor: Prof Dr. In such situation.” Service computing is another one. et al. According to Smith (2009a). One of these systems is autonomic computing. Due to this. the sameness with the theory of electric grid. computation. are well investigated in the title. This is where there exists no central coordination of the connected computers. data. Tomaz Turk 2009b.169) defines this as “a form of distributed and parallel computing. This is any distributed system that distinguishes servers and clients. 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. information access. These companies switched traffic in order to balance use so as to use the whole bandwidth effectively. Locke (2008. cloud computing shares attributes with various wellknown systems. This is where computer systems or resources are utilized for self-management. loosely coupled computers acting in concert to perform very large tasks. 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 users are provided with services without having to necessarily understand the component devices or even the systems that are required in providing these services. In such systems. such as computation and storage.” Utility computing is another system defined by Locke (2008.353). p. software. Gruman (2008) defines the term as the provision of computing as a service rather than a product. Almost all the present attributes of cloud computing. The theory behind the development of cloud computing is borrowed from the one behind electric grid (Kyriazis. p. software. as a metered service similar to a traditional public utility.. Another system that cloud computing shares attributes with is the client-server model. and shared resources are delivered to computer systems in the organization as a utility over a network. and the use of various models in implementing it. such as electricity. Cloud Computing This is a term that has become extraordinarily common in the business world today. Another system with similar attributes is grid computers. This is because organizations providing telecommunication services began to offer Virtual Private Network services. According to Robinson (2010). whereby a 'super and virtual computer' is composed of a cluster of networked. The term cloud originates from telephony.

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

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

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

This infrastructure hardware is often virtualized. resistance to change. Additionally. this is an economic benefit of cloud computing. Besides. the organization is in a position to get to select the server. management and operating system software are also part of IaaS as well. This means that resources are configured and reconfigured to the specific needs of the organization. An example of IaaS is Amazon’s Elastic Compute Cloud (EC2) and Simple Storage Service (S3). Oracle does not offer IaaS cloud services. once the initial training is carried out. University of Ljubljana Information Technology Supervisor: Prof Dr. Despite of the initial cost of implementation. This is because of the idea that with a conventional dedicated server stack managed internally or by a third-party service provider. 2009a). It is also possible to upgrade the memory without affecting the configuration. 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. the elimination of the need for training. Particularly for the private cloud computing model. acquire them and utilize the specific configuration for three to five years. is eliminated (Smith. The company is also saved the need to acquire or train information technology experts to manage computing systems. but Oracle provides hardware and software products to other IaaS providers to enable their public cloud services. storage. with the obscured aspect of cloud computing. Additionally. Tomaz Turk public cloud service providers as well as enterprise customers to build their own public clouds. This enables the organization the flexibility of utilizing the services and applications at its own convenience. and networking hardware delivered as a service. Infrastructure as a Service (IaaS) – Compute servers. 2009a). Oracle calls this the Oracle PaaS Platform (more on this later in this paper). common with implementation of new technologies in an organization. The concept includes any subscription-based or pay-per-use service. networking. cloud computing can be customized to the needs of the organization. and also offers the same technologies to enterprises for private use. the availability of the three models and the flexibility of use is a benefit to organizations (Smith. et al. 2009). 2008). . this is in itself a substantial benefit to the organization. Benefits of Cloud Computing Given the fact that the underlying infrastructure is hidden from the end user.Faculty of Economics. The skills that are necessary in the organization are related to the fundamental principles of cloud computing and how it is used. and storage needs. The need to train employees on the structures and infrastructures that provide services to the organization is eliminated through the implementation of cloud computing.. so virtualization.

The cost of management might be higher as compared to the other three cloud models. Regardless of the fact that cloud computing saves on cost in the long run. 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 role of various personnel in the company changes thus affecting the work of the entire organization. improved control of IT infrastructure. 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. Bernstein. the organization is likely to save remarkably little in terms of cost. Besides the cost of implementing the new strategy. (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. According to Zissis (2010). 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. and processes are necessary in supporting the move to cloud computing. and hybrid cloud-computing models. and improved agility and flexibility in the organization. According to Camarinha-Matos and Afsarmanesh (2008). particularly with the use of public. Because of the benefits offered by cloud computing. In private cloud computing.Faculty of Economics. . The issue of information security is another limitation of cloud computing. technology. it is possible for the company to gain and maintain a competitive advantage. University of Ljubljana Information Technology Supervisor: Prof Dr. This increase in cost makes many companies shy away from private cloud computing. the effects on the organization can be destructive. offering of innovative technology. Tomaz Turk Limitations of Cloud Computing The promise of cloud computing cannot be realized overnight since people. a need for innovative ways emerges. community. Given the fact that with cloud computing it is possible for the employees within the organization to concentrate on the core business purposes. The requirement for new skills and competencies in the organization is an additional cost for the organization. start-up cost could be a lot for the organization. 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. 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. it is becoming extremely attractive to organizations seeking to optimize on productivity.

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

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