Running head: Cloud Computing: A Business Approach 1

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1 Running head: Cloud Computing: A Business Approach 1 Cloud Computing: A Business Approach University of North Texas

2 LTEC Cloud Computing: A Business Approach The US National Institute of Standards and Technology (NIST) defines cloud computing as a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources that can be rapidly provisioned and released with minimal management effort or service provider interaction. More generally, cloud computing is the availability of resources over the internet. The internet itself is a cloud and is used daily by consumers and businesses to complete anything from ordering a meal and making travel arrangements to trading stock and signing contracts. Businesses have used cloud computing for some time to aid in the sharing of resources, but the increasing demand to house and maintain all the required resources for electronic based companies has changed the face of cloud computing in business. Cloud computing has been around since the 1960s when J.C.R. Licklider began development of ARPANET (Advanced Research Projects Agency Network) and was introduced into the business world through service bureaus. Cloud computing has evolved greatly since then and with the introduction of the internet in the 1990s, it has been made widely available to the majority of the population. Salesforce.com arrived on the scene in 1999 and really pioneered the concept of providing enterprise applications and services over the internet. They laid down the foundation for other companies to offer their services and expertise over the internet. Since Salesforce s introduction of the electronic enterprise, huge companies like Amazon, Google, and Microsoft have dominated the business sector of cloud computing. These companies offer several service models of cloud computing including Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS). All provide different portions of cloud computing based on what the business requests.

3 LTEC Infrastructure as a Service (IaaS) is the whole kit and caboodle. The client pays to use computers that someone else owns, manages, and operates. This version of cloud computing was one of the first services offered as companies didn t want to take on the costs of purchasing and maintaining their machines. This paved the way for two improved versions of IaaS: virtualization and the Internet. The internet makes it possible for people to communicate with others over vast distances. Through high-bandwidth data communications, the internet allows users across oceans and continents to communicate in real time. This allows cross team and even multi-company participation on projects and allows businesses to access outside resources they may not have access to on their inside networks. Businesses can take advantage of sites with lower staffing and operating costs. An example of this would be customer service outsourcing. Virtualization is a technology using software that makes multiple operating systems and applications available on the same server at the same time. It provides companies with more flexibility and allows access to applications and services may not run on the base technology used on site. This also allows companies to reduce operating costs as they can have employees sign into virtual environments and house little to no data on individual sites. This reduces overall operating costs and can increase IT productivity as there is less maintenance on site. Platform as a Service (Paas) is similar to IaaS, but allows the client a choice of owning and operating all the hardware needed to maintain the service or just using the platform on their machines. The client doesn t manage the cloud infrastructure, but controls the applications and perhaps some of the hardware. This service allow businesses to have more free reign on the type of hardware they use and makes them responsible for the equipment needed to operate. Although

4 LTEC this is a middle of the road option, this can be an overwhelming task for a small company expanding or a large company downsizing. This option puts run-time operations on the service provider, but requires some middleware application or 3-party to assist in communication between the service provider and the client. The client of course has the option to maintain a middleware team, but allows a bit more control over configuration and access. The last service model is Software as a Service (SaaS.) This choice is used more frequently on a consumer level, but new and established businesses frequently use this to quickly deploy software options to their teams. SaaS allows the service provider to provide applications to clients, generally through an internet environment, or a thin client. An example of this would be web-based . This option is probably the most popular as service providers can offer applications on multiple device platforms and appeal to most any business. Businesses also have the option of getting multiple applications from a variety of vendors if they choose to maintain their own IT team. This may prove to be a more lucrative option for large businesses that deal with several vendors on multiple platforms as well as small starters who need something predefined to make pushing their product or service easily. There are four models of cloud commonly used by businesses as well as consumers: public, private, community, and hybrid. Public clouds are available to the general public and are owned by organizations selling cloud services. Examples of public cloud services would be Dropbox, Amazon Prime, and Netflix. All offer a service to the public free or at cost and can be accessed from any internet connection. There is no requirement to have a VPN tunnel to access these services, but user data is protected from public view.

5 LTEC Private clouds are used by businesses exclusively as they are defined to be behind a corporate firewall to be used and operated solely by an organization. Business can choose if they want to manage their cloud on the premises of the company or if they want a third party to operate, but regardless of operation the only people with access are internal employees. Most businesses have private clouds now without specifically setting them up. There is generally some sector of information within a corporation that shouldn t be released to the public like employee records, internal policies, and financial records. At some point, parts of this data would need to be accessible to employees for reviews, audits, or general management. The network of information and how the information is made available to the employees can be defined as a cloud. If the data is available to other users on the internal company network, it is part of the private cloud. Even if the data is available to employees through VPN, it is still part of the private cloud as it is housed in the company s network. The community cloud is a cloud infrastructure share by organizations and used to support a specific group of consumers or clients. This type of cloud has features of private and public clouds. It can be managed privately and stray from security concerns and bandwidth issues, but it can be easy to set-up and pools resources for a community. An example of this would be a cluster of companies that work together towards a single cause or follow the same policies. They may be able to share a similar software system or database if each company contributed to the cloud on separate levels. For example, a group of health related companies. One company focuses on reading consumers for contact with health management professionals and only needs to see basic information on the consumers and needs access to enter responses to the required questionnaire. Another company uses the same system and database to provide the information

6 LTEC obtained on the consumers to set them up with health management personnel. This company would be able to update consumer information as well and perhaps place specific notes that could be passed on to the consumer s physician. The first level company doesn t need specifics on the consumer s interactions, but still needs to be able to access it. This could be managed through a community cloud as the companies need access to the same information at different depths. The final type of cloud to be used by businesses is the hybrid cloud. This is a combination of two or more of the previous mentioned cloud types: public, private, and community. The cloud types remain intact as separate clouds, but bridge with technology. An example would be a public non-profit organization that is required to report the total amount of donations and some financial records to the general public, but does not have to report each individual transaction or allow the public to see how the transactions are processed, how the company employees are maintaining records, or the internal structure of policies. The complete financial records, internal policies, and individual transactions could be housed on a private cloud requiring internal network authentication through VPN. The financial records that required public display, the software service that allowed donations, and general company information could be housed on a public cloud, i.e. a website, for the general public to view. An example of the merging of these two would be an employee travelling in the field needing to access the general financial information provided as well as some internal reports. The employee would have to log into the private cloud to access the secure information. A few advantages of cloud computing for businesses are the ability to get resources on demand and use them better, less time spent trying to develop standard services, and the ability

7 LTEC to use new business models with less capital expense. Having resources available on demand allows IT projects to move quicker and more efficiently. Businesses can focus on getting a price for their projected needs and having the IT people they would normally use to roll out the project work on other things. Another benefit to cloud services is negating the need to reinvent something that s already being provided by another company. Businesses can focus more on their main goal rather than worry about logistical specifics on how it s going to get there. Companies may also see a decrease in capital expense by shifting to a cloud model. If using something like SaaS, companies would be able to subscribe to a service for an initial project and to get it out into the market and possible switch to a more permanent solution as the project grew or discontinue the product and service if it didn t work out. Cloud computing makes that possible by not requiring the company to make large investments in equipment or software. There are two main setbacks for cloud services: less IT people working on IT things and the increasing need for more security. With outsourcing software services, data housing, and possibly renting equipment, the internal IT department has the potential to decrease rapidly. Although small businesses may be able to afford not having a resident tech guy, most large companies still need someone to bridge the gap of the local users and the cloud services they subscribe to. With new technologies emerging so quickly, this is considered a minor setback as the new wave of technology will usher in the need for a new group of IT professionals. With more cloud services the need for increased security to internal resources grows. Especially in a hybrid cloud environment, companies need to have some sort of security barrier between public access and internal access. Companies could tack on another PaaS or Saas to aid or completely manage the security for their system, but then they are handing over proprietary

8 LTEC information to another company. This is something each company, regardless of size, has to think about when subscribing to cloud services. Who will want to access our information? How will they be able to access it with our current security measures? How can we help prevent security breaches and data lose? All of these things are something to consider when signing up for cloud computing. Businesses are pushing security more than ever and with good reason. As new technology emerges it creates new holes into the internal structure. In short, cloud computing in the business environment has revolutionized how the world interacts. From Amazon Web Services to web based , businesses use cloud computing daily. Cloud computing allows businesses to interact with employees and clients on opposite sides of the world in mere seconds and provide the services requested without leaving the office. With the only major concern being security, the future of cloud computing rests on the ability to make the cloud accessible and safe.

9 LTEC References Columbus, Louis. '55% Of Enterprises Predict Cloud Computing Will Enable New Business Models In Three Years'. Forbes.com. N.p., Web. 30 Nov Martin, James. 'Should You Move Your Small Business To The Cloud?'. PCWorld. Web. 30 Nov html McKendrick, Joe. 'Cloud Computing's Paradox: More IT, But Less IT Management'. Forbes.com. N.p., Web. 30 Nov Mohamed, Arif. 'A History Of Cloud Computing'. ComputerWeekly. N.p., Web. 30 Nov Opengroup.org,. 'Cloud Computing For Business : What Is Cloud?'. Web. 30 Nov The Huffington Post,. 'What Is The Cloud? (And Why Small Businesses Need To Care)'. N.p., Web. 30 Nov

10 LTEC Vmware.com,. 'Virtualization Technology & Virtual Machine Software United States'. N.p., Web. 30 Nov WIRED,. '5 Cloud Business Benefits'. N.p., Web. 30 Nov