charged for what your application uses.
This lets an application start small and
incur only small charges.
This model does not require a commitment. If the experiment does not work
out, the application can be shut down
immediately. If it is a success, it can be
easily expanded by requesting more
resources from the cloud service provider,
making it elastic (scaling up and down).
One good example of this model is being
used in the pharmaceutical industry
where companies are using Cloud Computing to do drug research.
Cloud Computing can make it easier to
start small and then grow as needed. Ideas
that might never get tested have a chance
of being implemented and making a difference for an organization. On the other
hand, an organization’s capacity to accept
failures also increases, improving the odds
of finding successful business innovations.
GLOBAL SCALE AND REACH
Cloud service providers run huge data
centers in multiple locations around the
world. Organizations can take advantage of
this global reach and scale. Applications
can be moved to cloud at multiple locations
to expand the user base and handle a rapidly growing load.
Cloud Computing platforms are elastic in
nature. It means your application can be
scaled up and down quickly to handle the
usage spikes. An application can request more
computing resources when needed and then
release those resources when it is done. Business only pays for the usage consumption.
Risks of Cloud Computing
Like any other technology, Cloud Computing comes with risks as well. Business leaders should fully understand the implications
of adopting Cloud Computing. The main
risks associated with Cloud Computing are:
•Outsourcing your applications to a third-
• Storing data outside your organization
• Vendor lock-in
LET’S TAKE A CLOSER LOOK.
OUTSOURCING TO AN EXTERNAL PROVIDER
When an organization decides to use Cloud
Computing, it is outsourcing (renting) services from an external service provider.
Unlike conventional outsourcing, where
an entire data center or application portfolio is taken over, Cloud Computing platform lets an organization outsource one
application at a time. This enables more
flexibility, but it does not eliminate risk.
Outsourcing means partnering with another company. What if the cloud service
provider does not live up to your expectations? What if they’re not reliable, for instance, and your applications are down for
an extended period of time? What if
they’re hard to work with, failing to provide the support or new features? Or what
if they decide to exit the cloud business?
Creating an outsourcing relationship,
even at the relatively small scale, is like
getting married. You want to choose a
reliable partner that you know well. You
also want to make sure you’re happy
with the terms of your provider’s service
level agreement (SLA) and its enforceability. Minimizing your risk requires
attention and effort, both during the
Cloud Computing vendor selection
process and throughout the time you’re
using its services.
STORING DATA OUTSIDE YOUR FIRM
It is all about data. The biggest concern for
business leaders in using cloud computing
is storing data outside of their organization. How secure the data will be? What
happens if any proprietary information
All these concerns are valid and reasonable. It is important to understand what
types of data the organization would be
comfortable in moving to the cloud. There
might be regulatory data that cannot be
moved to the cloud based on a country’s
regulation. If that is the case, organizations
need to validate that the cloud service
provider meets those compliances (like
PCI, HIPPA, etc.)
It is expected that major cloud service
providers will not let customers conduct
detailed internal inspections of their
cloud data centers as it would not be
good for the long–term security of these
platforms. Hence, it is strongly advised
to build trust with the cloud service
provider. It is good to start small and perhaps move non-critical applications to
the cloud first. Another approach is to
move just the application to the cloud and
leave the data on-premise.
The key point is to identify what risks are
worth taking with your data. Just avoiding
cloud computing based on the fear of the
unknown will hinder the ability to achieve
benefits of this technology.
Cloud service providers come in different
flavors like IaaS, PaaS and SaaS among
others. An application moved to one service provider might be difficult to move to
another service provider later. This vendor
lock-in can lead to issues down the line.
It is good to do due diligence during the
vendor selection process. Organizations
should make sure that the cloud service
provider’s footprint meets the technological guidelines of its current application
portfolio and its architecture. While every
cloud service provider would have some
degree of lock-in, business leaders should
look for a partner that offers greatest flexibility in terms of moving applications between on-premise and off-premise.
Is a Cloud Computing platform right for
every application? The answer, of course,
is clearly no. But can using a Cloud Com-
puting platform sometimes bring real busi-
ness benefits? Yes.Cloud Computing has
moved forward to become a mainstream
technology. All organizations should be
looking into it seriously.
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