Cloud Computing Benefits
Cloud computing enables a service provider to host multiple applications from a variety of customers (multi-tenancy) while pooling other resources in the DC environment to process different tasks. To the client, they have a DC to themselves. Cloud computing greatly reduces the need for organizations to spend money on expensive systems and staff, due to the fact they can outsource their computing needs to a cloud service provider. A cloud service provider is an organization that provides rapid provisioning and de-provisioning of resources, combined with the pay-per-use benefit. This allows companies to only pay for the time, network utilization (bandwidth) or applications they use.
You may find this analogy for cloud computing helpful:
Imagine a firefighter, and there is a fire that needs to be put out. There are two options for the water resource needed to put the fire out as shown in Figure 1:
Option 1 – There are a million 12 oz. water bottles that you can individually open and pour over the fire until it is out.
Option 2 – There is a water tank which has 12 million ounces of water in it. You can connect a hose to the water tank and use it until the fire is out.
Fig.1: Firefighting Analogy for Cloud Computing
Option 2 is the more efficient option. There is less work to use a hose than to open all the bottles needed to put out the fire, and the results, putting out the fire, would require less time. Cloud computing is analogous to Option 2. When more computing resources are needed, simply flip a switch and more is available. On the other hand, when less computing resources are needed, simply turn on the switch. This functionality can save organizations money and allow resources to be reallocated where needed.
Here is another viewpoint for cloud computing worth consideration: which is better, buying or renting a car?
Benefits of Cloud Computing to Organizations
The business of cloud computing is built upon a sound business model targeting the client with scalability, service, an economy of size, and the flexibility to expand or contract to meet business needs. Cloud computing has the following advantages:
- Cost–Effective – No upfront expenses are required to purchase servers or networking equipment, which significantly reduces capital expenditures. Furthermore, an organization only pays for a number of services used, which is an operational expense, and not a capital expense.
- Flexible – Due to virtualization, the time it takes to plan and bring IT resources online is greatly reduced. Some organizations require testing or development labs, so they can see how an application will function on production systems. A cloud service provider could be used for this purpose, which saves an organization the cost of acquiring test and development equipment. In a cloud environment, once an organization is finished using systems, the organization no longer pays for them.
- Efficient – Based on the resources needed to meet demand, a cloud provider can scale up or down the resources needed by an organization. This provides on-demand scalability to companies who may experience high demand during certain peak times of the year, such as holiday shopping seasons. Also, an organization is free to focus on core business activities without having to worry about operating costs (such as heating, cooling, and electricity) and procedures required if they owned the data center.
Organizations that Benefit from Cloud Computing
While it might appear that most companies would benefit from cloud computing, companies that would benefit the most have some of the following characteristics:
- Companies with limited staff and/or financial resources, including startups
- Companies which are highly mobile and geographically distributed (e.g., Accenture Consulting)
- Companies with limited capacity to store or maintain back-ups onsite (e.g., small business owner)
- Companies with traditional DCs whose operational cost and capacity planning are reaching thresholds
- Companies which need highly scalable systems to meet business demand (e.g., Macy’s website during holiday season)
- Companies that need new and experienced IT staff to manage its growing IT needs
Organizations Less Likely to Benefit from Cloud Computing
As with any service, not everyone has the same needs. Companies with the following characteristics are less likely to benefit from cloud computing:
- Large companies with significant investment in IT infrastructure
- Companies with legal or regulatory procedures that must be followed, including healthcare and financial institutions
- Companies with poor network connectivity
- Companies with excess capacity to accommodate additional data and grow without needing new hardware
- Organizations with relatively steady business demand such as power companies with billing cycles consistent from month to month
Cloud Computing Characteristics
While cloud computing has many of the characteristics of a traditional DC or computes utility with virtualization, what differentiates the approach is the array of dynamically provisioned resources and services. Keep an eye out for the evolving definition of “service” and “resource”. Here is a list of characteristics associated with cloud computing:
- Virtualization allows service providers to manage jobs/workloads across a massive pool of resources (servers, storage array nodes, etc.).
- Data centers should be located as close to the end users as possible to ensure the quality of service. Data centers are connected via networks. This allows DCs to be geographically dispersed. This satisfies disaster recovery and business continuity planning requirements.
- Cloud applications and infrastructure are designed to detect, diagnose, and recover a service after a failure.
- Security is essential to any software and/or network environment, as potential attack targets; denial of service and other attacks must be mitigated by cloud providers and their customers.
- Cloud deployment where systems are able to communicate effectively leads to efficient and successful deployments. A large variety of hardware dependencies, software platforms, policies, and infrastructures should be avoided when deploying a cloud environment.
- Utility computing is how cloud providers charge for services delivered to their customers. Metered billing is based on the CPU cycles, storage space, and network data/transfer utilization.
- Grid computing involves individual computers working together to complete highly complex computational and resource-intensive tasks.
- You May Also Read: How Cloud Technology Enables New Business Models