Research Paper: Cloud Computing as a Business Application{Comments Off on Research Paper: Cloud Computing as a Business Application}


by Clifton
By Clifton Wahlberg

Imagine a world where every laptop, cell phone, and television has unlimited computing power, a world where any electronic device can browse the web, play advanced video games, and calculate pi to several trillion digits. This is the world that cloud computing offers. Cloud computing is the industry name for a new type of computer resource management one which pools all available computing resources and sends information based on demand. It can lower costs in large businesses and increase efficiency of IT departments. However, several arguments have been raised against it, including concerns on legality and privacy. So is it the dream technology of tomorrow, or is it just some interesting yet useless computer system?

Speaking technologically, cloud computing is a very simple concept. In a computer cloud, a large number of computers are networked together and share information, just like any computer network. Cloud computing is different in that it nor only shares information, but system resources; complex, processor heavy tasks on any one computer or terminal are outsourced to other computers to help share the processing load. In this way, computing power and storage space are all shared, and since its unlikely all the computers will be running at full capacity simultaneously, the system is much quicker and powerful. Additionally, since the computing power of the terminal doesn’t matter much, any electronic device that can connect to the internet or any other system can have access to this pool of system resources.

This technology can be used in several different formats in a business setting. A “public cloud” is illustrated in the previous paragraph; its a simple cloud of resource-sharing computers that any user can access. Users access the cloud usually through the internet (though it can be accessed other ways) and are billed based on how much resources they consume. A second format is known as the “community cloud”. The only difference that the “community cloud” has over the public is that a community is comprised of systems in several similar organizations that have entered into a mutual agreement to deploy the system; this may be more expensive since the organizations have to install the underlying computer network. Hybrids of these two systems have been deployed in various formats, one being a small internal cloud that sometimes purchases resources from a third party.

This technology changes the way one has to view an information system in a business. Computing performance is no longer tied to the servers or personal computers the business owns; it can be bought and sold as a utility, such as electricity or water. This paradigm shift illustrates one of the biggest benefits of utilizing this technology, the low cost of implementation. In many small and medium sized enterprises, there is little money for large capital expenditures in information technology; they simply can’t afford to purchase, install, and maintain large information systems. With cloud computing, they don’t have to invest up front just pay for what they use. It lowers the barriers to entry for these organizations and allows them to be competitive with other larger companies. Also, in case of bankruptcy or company dissolution, money is not tied to often non-salvageable technology; users can simply cancel the cloud-computing service with their third party provider. Additionally, the users have gain all the benefits such as extremely quick processing, online data storage, and terminal flexibility that have been outlined above.

This technology has also drawn much criticism in a number of different ways. While cloud-computing seems to be a cost effective business tool, it can be more expensive than purchasing equipment. In a company that has a relatively low need for computing, or requires a small capital investment, it is more expensive to deploy cloud computing services. Also, using cloud computing services increases operating expenditures as opposed to capital expenditures which can affect important financial indicators such as ROI, net income, and operating margin. Finally, due to several laws in the US that dictate internet security standards, some prospective users might be forced to implement community or entirely internal cloud systems which nullifies the benefit of low cost and capital investment.

Cloud computing has also been criticized on the grounds of privacy. The security of these systems and services has been a constant concern for many; data security is of huge importance to companies who want to keep information private. Many companies are wary to rely on a third party to store and manage all of their information technology needs. From an individual’s standpoint, cloud computing ca represent a complete loss of computer privacy; no matter what you do on your computer, you are being monitored, at the very least by the providing company. Since the right to privacy is such an important issue in this country especially, cloud computing has yet to win over the mainstream.

So is this technology useful? Absolutely; it gives the users a large amount of raw computing power and available system resources for a low cost. However, due to the drawbacks of this technology, it is not feasible for many businesses. For some organizations the resource-buying model works, but most organizations don’t require large IT departments or have advanced computer needs, so the benefits of this technology are lost. Also, due to current laws, the low cost benefits have been partially hedged. Though it is a very important technological step for computing, I doubt it will become a widely used business tool in the near future.

Works Cited

Baltzan, Paige, and Amy Phillips. Business driven information systems . 2nd ed. Boston: McGraw-Hill/Irwin, 2009. Print.

Boulton, Clint. “Forrester’s Advice to CFOs: Embrace Cloud Computing to Cut Costs – Enterprise Applications – News & Reviews .” Eweek. N.p., 31 Oct. 2008. Web. 24 Nov. 2010. <http://www.eweek.com/c/a/Enterprise-Applications/Forresters-Advice-to-CFOs-Embrace-Cloud-Computing-to-Cut-Costs/>.

Danielson, Krissi. “Distinguishing Cloud Computing from Utility Computing – SaaS Week.” An SOA, BPM, Decision Management and Cloud Computing Guide for the Enterprise Community.. N.p., 26 Mar. 2008. Web. 24 Nov. 2010. <http://www.ebizq.net/blogs/saasweek/2008/03/distinguishing_cloud_computing/>.

Haff, Gordon. “Just don’t call them private clouds | The Pervasive Data Center – CNET News.” Technology News – CNET News. N.p., 27 Jan. 2009. Web. 24 Nov. 2010. <http://news.cnet.com/8301-13556_3-10150841-61.html>.

May, Raymond. “Cloud Computing Savings – Real or Imaginary? | CIO’s Guide to Cloud Computing and On-Demand | Appirio.” CIO’s Guide to Cloud Computing and On-Demand | Appirio. N.p., 19 Apr. 2009. Web. 24 Nov. 2010. <http://blog.appirio.com/2009/04/cloud-computing-savings-real-or.html>.

Paul, Frederic. “1 Midsize Organization Busts 5 Cloud Computing Myths — bMighty.com | 1 Midsize Organization Busts 5 Cloud Computing Myths.” InformationWeek | Business Technology News, Reviews and Blogs. N.p., 23 Oct. 2008. Web. 24 Nov. 2010. <http://www.informationweek.com/news/smb/services/showArticle.jhtml?articleID=211600030>.