Hi all, below is my draft of my topical paper. Feel free to give any comments about it, thank you so much! =)
I. Executive Summary
This paper will examine the impacts of the emergence of cloud computing, particularly on the IT industry. This paper aims to identify the potential of transformation it brings, as well as the new concepts it develops for the industry. The impacts and influences to businesses and consumers will also be discussed briefly.
The paper focuses on these key points:
1. Issues at hand before such technology existed, challenges in adopting such technology, and the opportunities brought about from this technology.
2. New concepts that are brought upon the IT industry.
3. Impacts and influences to general business processes and consumers.
With the rapid developments and adoptions of this technology, it is important to look forward towards the future, and identify the possible technologies that will soon turn obsolete. This is crucial especially for businesses to strive for a more effective information system platform to drive their business processes towards effective productivity. Future concerns of legal issues should also be taken into consideration with the disadvantages of cloud computing in mind.
The paper will then conclude on the possible attitudes and mindsets businesses should adopt so as to embrace such technology more effectively. The balance between the risks and advantages of adopting any technology, especially for cloud computing, should be evaluated very carefully before any implementation.
1. Introduction
Cloud computing is the new concept of changing computing into a service rather than a product. This happens by providing resources such as software and information, through technological devices, being shared across a network, of which the Internet is a great example. These resources are stored in data servers, where their physical location may not be known to end-users.
The idea of “cloud” was evolved from the drawing of clouds that used to represent the Internet in various diagrams. The concept already sprouted in the 1960s, when opinions were raised about how computation may evolve into a public utility as well.
There are mainly 4 different avenues where cloud computing can be applied to, for easier access and sharing of information and services regardless of your location.
1. Client
A cloud client would be the most familiar for the majority, as most electronic gadgets that are part of our lives make use of cloud computing to deliver applications locally on your hard drive. The iPhone app store or the Android market is a clear example of delivering applications to phones.
2. Application
Cloud application services, otherwise known as Software as a Service (SaaS), provides the application services through the internet, without the need of installation packages on user’s own hardware. This helps to cut down complications of maintenance and support by the service provider. Google Docs is a perfect example of SaaS.
3. Platform
Platform as a service (PaaS) would be the deliverance of a computing platform that helps sustain applications that are being submitted to the service provider. This would help reduce the costs and complexity significantly, in terms of purchasing and management of hardware and software issues in-house. Google App Engine is one example of such platform to provide an avenue for the public to upload their applications for the world to use.
4. Infrastructure
The last type of cloud computing would be infrastructure as a service (IaaS), where the entire computer and network infrastructure for an organization could be outsourced to a service provider. Such services would usually be billed according to the utilization of the service, which may serve a better purpose for start-up organizations. One example of this would be Amazon web services, where the company provides all the hardware required for hosting a website.
One of the obvious features of cloud computing is its ability to reduce operational costs. Cloud computing services are considered as a viable option for outsourcing when technological infrastructure will not be utilized fully in an organization. With cloud computing, resources can be shared across large pool of users, allowing the centralization of the hardware infrastructure and remove the problems of full utilization of such resources.
2. Evolution of Cloud Computing
Storage in the past …
Even before the emergence of cloud computing, data storage was of a major concern, as many needed devices to store their personal files as backup. Things were mostly backed up by manual hard copies, which were hard to manage due to tedious paper work and physical storage space constraints.
The floppy disk was the first invention by IBM to help answer these problems of data storage. This then slowly evolved to the usage of diskettes, CD-ROMs, and finally at our current stage of using thumb drives and portable hard disks.
Despite vast improvements over the years that helped increase storage space in CD-ROMs, and decrease physical sizes of thumb drives, the problem still exists where a physical object is still needed to be carried around. This may harbor certain inconveniences as people have to keep a conscious effort to bring it along for important events, as well as creating extra weight for baggage.
This lack of convenience has driven the rise of cloud computing, where an internet connection is all one needs to have, to be able to access your files.
Cloud Computing as a Dominant Player
With cloud computing technologies and services growing at a phenomenal rate, it is apparent that such technologies are slowly integrating into our personal and working lives.
The appearance of cloud computing has increased rapidly for businesses, with more adoption of SaaS and PaaS as an outsourced solution to support their technology infrastructure. Such features could help optimize business processes as they can better allocate resources towards other areas, especially if IT is not under their core functions.
Consumers have also benefited hugely from the evolution of cloud computing. Many services have sprouted for consumers for free usage, with the most widely used DropBox and Google Docs. This has helped eradicate the need to bring physical hard disks/ thumb drives to enable file sharing m a totally new manner. Files are now stored in a server at a remote location, which its utilization is at an optimum level to justify its costs.
With such an increasing demand and usage of such services, this has spurt the growth of the IT industry, by revolutionizing the services provided by the IT professionals, as well as creating a bigger job markets for them.
3. Challenges
Adoption of any emerging technologies would of course, come with its fair share of problems. With cloud computing, the main challenges lie within the technical and legal aspects that arise from the efforts in keeping such technology as sustainable as possible.
Obstacles to the growth of Cloud Computing
As cloud computing is a service that needs to be run continuously and provided throughout the world, there is a need to provide 24/7 support services to cater to the time zones of various consumers and businesses due to geographical locations. Furthermore, huge amounts of data will be pouring in from everywhere, increasing the difficulty in sustaining the continuous support services and managing the stored data safely and efficiently. This may very well shape the future of IT jobs, whereby majority will turn into shift allocated jobs to cater to such evolved demands.
Secondly, to be able to gain decent and sustainable profits from providing such a service, one must be enough physical space to have the data centre. Not only should it be big enough, its location risks should also be considered to prevent any possible accidents. The various factors intermesh to create a difficult situation to start-up such a service provision.
Obstacles to the adoption of Cloud Computing
One common concern most businesses first think of when considering the adoption of cloud computing would be its performance. With cloud computing providing services over the internet, latency could very well be a very big issue that could instead lower efficiency and productivity. A proper weighing of these cons over lowering costs through technological outsourcing would then take place to assess the real feasibility of engaging such services.
With cloud computing being relatively new in the world, many companies would also consider the costs of migrating existing data over to the cloud. For bigger organizations, such costs may not be ideal, as there are the hidden risks of lost or corrupted data during the migration phase.
Policy and business obstacles to the adoption of Cloud Computing
With files now being stored on the internet on a remote server at unknown locations, trust issues would definitely be of concern, especially for businesses with sensitive and confidential data. The privacy of the data is one key factor that deters businesses away from cloud services, despite significant cost savings. This is due to the importance placed on having the control over their own data in-house.
Legal issues would also be another grey area arising from the adoption of cloud computing, when dispute arises. The jurisdiction from the conflict can be very vague when the location of your cloud service provider is in another continent, which may then incur unnecessary costs for you to settle the conflict in another nation instead.
4. Opportunities
Widespread of mobile applications for cloud clients
With cloud computing, this has help spur the growth of smart phones, with respects to mobile applications. This has created a new market platform for many aspiring programmers. With the clear benefits of portable applications on smart phones, demand for such applications rise rapidly due to the conveniences such technology has brought about. These two phenomenons work hand in hand together to bring the IT industry to a status of higher quality and diversity of technology products.
Rise of demand for business analytics
With the rise cloud computing, many enterprises have turned to this alternative for database solutions. This has caused the demand for transaction processing in the database industry to slowly dwindle in growth. On the other hand, decisional roles in IT are growing in numbers, where a better understanding of customer requirements is needed for application development. This frees up much human resources away from transactional processes, and slowly shifts towards a demand of analytical skill sets.
New business ideas of providing data integration
With cloud platforms on the rise, complications may arise during data migration from an organization’s legacy application into the cloud platform. This can be due to the complexity and out-datedness of the software, which can lead to significant efforts and costs in migrating. As such, this has also brought about new changes to the IT industry, where business opportunities are generated by companies that provided such services of data integration.
5. Observations from past and current trends
Rise in adoption rates of the cloud platforms
1. Economies of scales
As explained in the introduction, cloud computing provides various technological services that will be shared across its clients. With such resources pooled together into one centralized location, this helps achieve greater economies of scales by service providers, largely through the more efficient use of hardware. It is said that increasing in scale would save these providers up to five to seven times more compared to a smaller scale. This allows them to push selling prices even lower to attract businesses to adopt such services.
With lowered costs, this makes great incentive for many companies to jump on the bandwagon of cloud computing. This is especially so when their network infrastructure is highly under-utilized. Furthermore, the remote location of these data centres would also equate to significant power utility savings for organizations.
2. “Pay-as-you-go” model
“Pay-as-you-go” is a term that refers to consumers paying for what you use, and stopping payment when the services are not required. One such example would be the mobile phone services that most people are subscribed to.
This concept has proven to be popular especially amongst start-up businesses with little capital to invest in advanced systems. With such a model, businesses can start small, and slowly increase their capacity of hardware resources. Small and medium enterprises also stand to gain from this, especially when their core competency does not lie in IT. This model would allow them pay for such resources only when it is required, saving huge costs in the long-run.
3. Shifting risks through elasticity of resource utilization
The key idea of elasticity benefits would be the transference of risks of under utilization of purchased hardware away from the company. Cloud applications would be able to help serve fluctuating demands of user services for web applications, as hardware resources and be re-allocated with much more flexibility as compared with in-house purchased. This addresses the problem of under-provisioning of resources during peak periods of user traffic, as well as over-provisioning during lull periods, thus eradicating the loss of potential revenues from constant new user counts throughout the year.
Shifts in demand for IT administrators to IT business analysts
With the emergence of cloud computing, much of the job demand for on-site maintenance has been reduced for many organizations. Thus, these jobs are slowly shifting towards the cloud service providers instead. With popularity dwindling for these jobs that mainly require hard skills, the trend now shifts towards soft skills of business analytics. Based on the Global Knowledge/TechRepublic 2010 Salary Survey, business analysis was one of the top 10 skills employers are now looking for again, especially when it comes to the integration of information systems to bring about positive changes to business processes. This revolutionizes the job market for IT professionals, creating both opportunities and disadvantages for fresh graduates and working professionals.
With such changes in demand for jobs, this trend may well affect the way educational institutions will deal with their syllabuses for IT courses. Gone were the times where an impressive array of technical skills will get you the job. Hiring managers now want more of a graduate, which has to equip themselves with the business know-how so as to reduce the amount of human resources required, together with the provision of efficient solutions to the company through the use of information systems.
Increase in dependency on the cloud: A cause for concern?
With the trend of adopting cloud technologies spreading on the worldwide scale, this places additional stress on service providers to sustain quality service with little downtime. With such huge dependencies, it is crucial that service providers do detailed risk assessments with regards to the location of data centers.
Proximity to areas prone to natural disasters is the first factor for consideration for choice location, as recovery costs will burn out profits fast for service providers. Frequent downtime caused by such disasters will only decrease consumer satisfaction, which will only decrease the company’s sustainability in the long run. The second factor would be the primary customer base, as latency issues is of another concern when it comes to consumer satisfaction.
With such unpredictable factors in place when careful considerations are to be made during the adoption of cloud services, it is eminent that organizations should not place all their eggs in one basket. A full dependency on cloud services increases the risk of serve downtime, or loss of important data, due to the absence of self-control over such issues.
Therefore, organizations need to be more aware on the importance of business continuity plans, so as to recover fast from such setbacks. This is especially so when more and more companies are increasingly reliant on technology to provide their services.
However, without a fully dependent model, organizations may feel the contradiction of redundancy by keeping part of the IT infrastructure in-house. It is therefore necessary to invest in risk assessment professionals to clearly evaluate the impacts of a technical failure, and make decisions on how much finances to allocate to business continuity plans.
6. Taking things forward
Phasing out of PCs
With the popularity for cloud services going up, not just for businesses but public consumers as well. This could slowly drive conventional PC producers out of business. Typical desktops in every household would soon find themselves obsolete, when SaaS and PaaS take a more dominant share of the IT product market. Furthermore, the emergence of portable mobile smart phones has set the pathway for many simple applications to convert to the mobile phone application market, and therefore driving a cyclic effect on both the supply of IT products for desktop use, and demand for desktop hardware itself.
Change in product prices for technological products.
Due to a more efficient utilization of technological resources, this could help bring demands of such products to a more justifiable level to reduce resource wastage. Working together with the rapid technological advancements in our current era, prices of IT products may very well decrease to a more favourable level where such products will be more accessible to a wider range of people. This once again creates a cyclic effect on the demand for portable devices that adopt cloud services, and the lower costs of technological gadgets derived from a better utilization hardware resources.
Possibility of cyber warfare
With an increased worldwide dependency on cloud services, this makes it a very potential target by cyber terrorists. One example of such cases was the cyber attack on Google in April 2010, where it was revealed that certain information has been stolen from their data centres. Although the intruders did not appear to have stolen vital user information, this occurrence has sprouted debates on security and privacy issues, especially for companies like Google that are so established with millions of personal and corporate information.
With much of our private information plastered all over the web (Facebook, Google, Blogs etc.), who knows what cyber terrorists can use to leverage on. Constant security has to be enforced on such systems to sustain continuity and trust by consumers and businesses.
Improvement of privacy issues for increased adoption
In accordance to the cyber terrorist problems, the issue of privacy should always be of utmost concern to service providers as consumer expectation rises. This is not only to gain trust, but to deter possible attacks on systems by cyber terrorists. One way to address that is to revise on the legal aspects of cloud computing, to tackle problems of personal data privacy, and deterrence through harsh punishments for cyber offenders.
7. Conclusion
Based on the detailed discussion of the emergence of cloud computing in this paper, it is evident that the world should embrace the conveniences that technology advancements have brought about.
Through the benefits and issues raised throughout the paper about the emergence of cloud computing, it can be concluded that businesses should strike a balance during the adoption of cloud services. Companies should treat such adoptions like any other, and recognize the need to do a proper risk assessment to determine the viability of such services. In other words, companies should identify non-core business processes, and evaluate the consequences of outsourcing such processes into the cloud.
8. References
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