Cloud Computing - Part One

Cloud computing, which extends the enterprise beyond the traditional data center walls is quietly winning over CIOs across the world. Cloud computing not only offers a viable solution to the problem of addressing scalability and availability concerns for large-scale applications, but also displays the promise of sharing resources to reduce cost of ownership. The concept has evolved over the years starting from data centers to present day infrastructure virtualization.  Although Cloud Computing is bringing about major changes in the way traditional IT infrastructure is being managed, it is still not mature enough for wide spread adoption in the IT industry.

We will try and look at a few aspects of Cloud Computing such as:

1.    What is cloud computing?
2.    Advantages of cloud computing
3.    Concerns related to cloud computing
4.    Factors which can accelerate wide spread adoption of cloud computing

In part one of this two part blog post we will cover:

1. What is cloud computing?
2. Advantages of cloud computing

1. What is Cloud Computing?

A commonly found definition of cloud computing is:  

A set of disciplines, technologies, and business models used to render IT capabilities as on-demand services.

A frequently asked question is about the origin of the term ‘cloud’. In most documents related to the internet it is common practice to represent the internet as a diagrammatic representation of a cloud, due to the distributed nature of internet. Cloud computing also has a similar distributed nature and hence the term ‘cloud’ was adopted.

Cloud computing is also often referred to as ‘the cloud’.

The common characteristics of cloud computing includes:

(a) Shared Infrastructure: As per the cloud business model, the cloud service provider invests in infrastructure necessary to provide software, platforms and related infrastructure, as a service to multiple consumers. Hence the service providers have a financial incentive to leverage the infrastructure across as many consumers as possible. 

(b) On-demand self-service: On-demand self-service is the cloud customer’s ability to purchase and use cloud services as per need. For example, as the number of users supported by the customer's application increases, the customer can add more storage space or processing power as per need. When the enhanced computing power/storage is no longer needed, the customer can scale down as well. Thus the cloud computing’s ability to quickly provision and deprovision IT services creates an elastic and scalable IT resource. It is a pay-as-you-go model where the customers pay only for the services that they actually use.

As an added advantage, it is also possible for cloud vendors to provide an application programming interface (API) that enables the customer to programmatically (or automatically through a management application) scale-up or scale down cloud services.

(c) Consumption based pricing model: As explained at (b) above, the customers pay only for the services they actually use, resulting in per hour or per GB (Gigabytes) prices. For example, CPU (Central Processing Unit; refers to computing power) time can be billed in minutes or an hour during which the CPU is actually is in use. Data storage can be charged on the basis of GB stored. Data Transfer also can be billed on the basis of MB (Megabytes) or GB. In practice, it is also common for vendors to vary the pricing model for data storage and data transfer based on the geographic proximity of customers to the vendor’s data centers.

2. Advantages of Cloud Computing

Some of the key advantages of cloud computing can be listed as below:

(a) Simplifies and optimizes IT resources: In the current IT scenario, many organizations own and operate all of the IT resources for meeting their business objectives. Such organizations are often forced to install, maintain and upgrade complex solutions integrating different applications, operating systems, servers, networks and storage, to meet ever growing business needs. This drives up the IT operational costs and prevents IT organizations from focusing on strategic business initiatives. This in-house management of IT resources also results in large capital expenditures which return little value to the business. 

In future, as cloud computing gains acceptance, organizations can reduce the size and complexity of internal IT operations by shifting non-strategic, but essential IT resources to a cloud computing platform. Internal IT resources can then focus on more important, higher level projects which can drive core business initiatives.

(b) Cuts costs and moves CAPEX to OPEX: Complex internal IT infrastructures consume a lot of electric power and also need operational personnel to monitor and manage expensive and underutilized IT equipment on a 24x7 basis. Also, in the case of some business scenarios, highly intensive computing power and storage capacity is required only for a few hours or days per month. Capital expenditure (CAPEX) is often more tightly controlled by finance departments than operational expenditures (OPEX). 

Moving to the cloud helps IT organizations release the work-load on their already strained data centers. Cloud computing’s on-demand, consumption based pricing model can help IT organizations defer large capital expenses or even avoid costs altogether. 

Another classic case is the Test Hub that software development companies employ to simulate real-world scenarios. In Test Hubs, the IT resource configurations are often much larger and complex then typical development environments. Cloud computing provides a quick and cost-effective way to boost computing power and data storage to simulate real world scenarios in Test Hubs.

Since cloud computing expenses get classified as operational expenditure there is less budgetary controls as explained above. 

(c) Improved IT Resource Management: IT resource procurement model in typical organizations is often an inefficient supply chain. The procurement cycle starts with System Administrators predicting and factoring usage patterns into buying decisions to ensure sufficient capacity to satisfy growth over time. The procurement process should also allow for contingencies like delayed delivery of equipment, non-working equipment delivered, slow budgetary approvals and poor forecasting. In effect, more resources than is needed are purchased and the operating resources are underutilized. 
 
Cloud computing’s on-demand, pay-as-you-go consumption based procurement model enables IT organizations to efficiently mange their IT resources and ensure better return on investment.

(d) Inexpensive Disaster Recovery: Building data centers with enough redundancy for disaster recovery can be an expensive proposition. Using an out of the region co-location facility is also difficult with out incurring high costs. Hence many organizations have poorly tested or even non-existent disaster recovery plans.

Here again, cloud computing services provides a viable alternative to increase business continuity by disaster planning without incurring the high costs as mentioned above.

This concludes part one of this two part blog post on “Cloud Computing”. In part two of this post, we will look at:

3.Concerns related to cloud computing
4.Factors which can accelerate wide spread adoption of cloud computing

~ Sunish