Dissertation Report

On
CLOUD COMPUTINGS EFFECT ON ENTERPRISES
in terms of Cost and Security

Faculty Guide: Ms. Kokil Jain

Submitted By: Akhilesh Agarwal A1802010373

Section C/MBA(IB)

OBJECTIVES OF THE STUDY:

1. To study the effect of cloud computing technology on an Enterprise. 2. To study the factors which encourage or discourage an enterprise from opting cloud computing technology, i.e. Cost & Security.

SAMPLE DESIGN & SAMPLE SIZE:

As the survey is about the understanding the Effect of Cloud Computing on Enterprises, the research was specifically designed for technical people who work in IT departments. The sample size was small because of the sensitivity of the topic & security reasons. Therefore only few respondents share their views, suggestions, information and their experience.

LIMITATIONS:
Sample size was small because it was quiet difficult to reach highly professionals technocrats for the survey on this sensitive topic of Cloud Computing. Various statistical techniques as learned have been implemented and conclusions as best possible have been drawn making few assumptions as and when required.

SCOPE OF THE STUDY:

This study refined the factors that will influence an enterprise using cloud computing technology in India and revealed the impact of Cost & Security on an enterprise business. A few paramount implications of the study are outlined here. Findings of this study indicate that the study is quite informative and useful for both general public and companies indulge in cloud technology. They can understand the dimensions reflecting benefits and risk of cloud computing and impact of all these factors on an enterprise. Findings of this study also indicate that it is worthwhile for an enterprise to take note of the results of this study before going for actual implementation of cloud computing technology.

Cloud computing- The Concept

Cloud computing is Internet ("cloud") based development and use of computer technology ("computing"). It is a style of computing in which dynamically scalable and often virtualized resources are provided as a service over the Internet. Users need not have knowledge of, expertise in, or control over the technology infrastructure "in the cloud" that supports them. Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. - U.S. National Institute of Standards and Technology (NIST) Cloud computing means using number of computer servers through a network, which appears as they are one single coherent computer. Cloud computing in recent times is one of the fastest emerging technology trend. The goal behind opting for Cloud computing is to save huge costs on building IT infrastructure. This papers elaborates the evolution of Cloud computing and how the cloud computing has been adopted by various enterprises. Cloud computing has been adopted in almost all the enterprise in todays world. This paper also explores on the technical description of the Cloud computing and its effect on Enterprise in terms of Cost & Security.

Characteristics:

On-Demand:

A basic condition that a cloud computing provider must fulfill is the ability to deliver computing resources whenever the customer needs them. From the customers point of view the available computing resources are nearly infinite (i.e., the customer is not limited the set of servers located at one site and it is the responsibility of the cloud computing provider to have sufficient resources to satisfy the requirements of all their customers). Utilizing computing resources on-demand is one of the most desired capabilities for a large number of enterprises because it eliminates the need for planning ahead, purchasing, and installing the resources they will require at some point in the future. This enables the customer to avoid making an unnecessary upfront investment in servers.

Pay-per-use:

Another new aspect of cloud computing is application of an usage based billing model. The customer pays only for short term use of processors or storage, for example this usage could be metered in increments of hours or days; converting what would have been capital expenses (CAPEX) into operational expenses (OPEX).

Rapid Elasticity:
Based upon the specific of a service level agreement, the cloud provider scales up or down the resources that are provided to meet the customers changing needs.

Maintenance and Upgrading:

Because the cloud provider rather than the customer maintains the computing resource, there is an effective outsourcing of maintenance tasks. Thus the cloud provider maintains and updates the resources, whether the resource is hardware or software.

Cloud Computing service models

Cloud computing can be classified by the model of service it offers into one of three different groups. These will be described using the XaaS taxonomy, first used by Scott Maxwell in 2006, where X is Software, Platform, or Infrastructure, and the final "S" is for Service. It is important to note, as shown in Figure 2.1, that SaaS is built on PaaS, and the latter on IaaS. Hence, this is not an excluding approach to classification, but rather it concerns the level of the service provided. Each of these service models is described in a following subsection.

Figure: Cloud computing service models

IaaS (Infrastructure as a Service):

The capability provided to the customer of IaaS is raw storage space, computing, or network resources with which the customer can run and execute an operating system, applications, or any software that they choose. The cloud customer is not able to control the distribution of the software to a specific hardware platform or change parameters of the underlying infrastructure, but the customer can manage the software deployed (generally from the boot level upward). E.g. Amazon Web Services.

PaaS (Platform as a Service):

In the case of PaaS, the cloud provider not only provides the hardware, but they also provide a toolkit and a number of supported programming languages to build higher level services (i.e. software applications that are made available as part of a specific platform). The users of PaaS are typically software developers who host their applications on the platform and provide these applications to the end-users. E.g. Facebook platform, Google App-engine.

SaaS (Software as a Service):

The SaaS customer is an end-user of complete applications running on a cloud infrastructure and offered on a platform on-demand. The applications are typically accessible through a thin client interface, such as a web browser. The customer does not control either the underlying infrastructure or platform, other than application parameters for specific user settings. E.g. Google Apps, Web-based email, Facebook applications.

Types

Private cloud:
Douglas Parkhill first described the concept of a "private computer utility" in his 1966 book The Challenge of the Computer Utility. Private cloud sometimes also termed as internal cloud are implementations that some vendors use these days to describe Cloud computing on private networks. A private cloud is a system or collection of many systems that provide hosted access to all the systems and applications that are internal to an organization.

Public cloud:
Public cloud or external cloud describes cloud computing in the traditional way, where resources are dynamically provided on a fine-grained, self-service basis over the Internet. It is as termed as pay as you go manner and service is sold as Utility computing.

Hybrid cloud:
The main responsibility of the IT department in a non-IT company is to deliver services to the business. With the growing use of cloud computing (both private and public) and the fact that IT departments must also provide services by traditional, in-house methods, this gave rise to the term called hybrid cloud computing.

Roles
Provider
A cloud computing provider or cloud computing service provider owns and operates live cloud computing systems to deliver service to third parties.

User
A user is a consumer of cloud computing.

Vendor
A vendor sells products and services that facilitate the delivery, adoption and use of cloud computing. For example: Computer hardware (Dell, HP, IBM, Sun Microsystems) o Storage (Sun Microsystems, EMC, IBM) o Infrastructure (Cisco Systems) Computer software (3tera, Hadoop, IBM, RightScale) o Operating systems (Solaris, AIX, Linux including Red Hat) o Platform virtualization (Citrix, Microsoft, VMware, Sun xVM, IBM)

Cost/Economics
Cloud computing users can avoid capital expenditure (CapEx) on hardware, software and services, rather paying a provider only for what they use. Consumption is billed on a utility (e.g. resources consumed, like electricity) or subscription (e.g. time based, like a newspaper) basis with little or no upfront cost. Other benefits of this time sharing style approach are low barriers to entry, shared infrastructure and costs, low management overhead and immediate access to a broad range of applications. Users can generally terminate the contract at any time (thereby avoiding return on investment risk and uncertainty) and the services are often covered by service level agreements with financial penalties.

Key Characteristics:

Cost is greatly reduced and capital expenditure is converted to operational expenditure. This lowers barriers to entry, as infrastructure is typically provided by a third-party and does not need to be purchased for one-time or infrequent intensive computing tasks. Pricing on a utility computing basis is fine-grained with usage-based options and minimal or no IT skills are required for implementation. Device and location independence enable users to access systems using a web browser regardless of their location or what device they are using, e.g., PC, mobile. As infrastructure is off-site (typically provided by a third-party) and accessed via the Internet the users can connect from anywhere. Multi-tenancy enables sharing of resources and costs among a large pool of users, allowing for:
o

Centralization of infrastructure in areas with lower costs (such as real estate, electricity, etc.) Peak-load capacity increases (users need not engineer for highest possible load-levels) Utilization and efficiency improvements for systems that are often only 1020% utilized.

Scalability via dynamic ("on-demand") provisioning of resources on a finegrained, self-service basis near real-time, without users having to engineer for peak loads. Performance is monitored and consistent and loosely-coupled architectures are constructed using web services as the system interface.

Security
The relative security of cloud computing services is a contentious issue which may be delaying its adoption. .

Key Characteristics:
Reliability improves through the use of multiple redundant sites, which makes it suitable for business continuity and disaster recovery. Nonetheless, most major cloud computing services have suffered outages and IT and business managers are able to do little when they are affected. Security typically improves due to centralization of data, increased securityfocused resources, etc., but raises concerns about loss of control over certain sensitive data. Security is often as good as or better than traditional systems, in part because providers are able to devote resources to solving security issues that many customers cannot afford. Providers typically log accesses, but accessing the audit logs themselves can be difficult or impossible. Sustainability comes about through improved resource utilization, more efficient systems, and carbon neutrality. Nonetheless, computers and associated infrastructure are major consumers of energy.

Companies:
Providers including Amazon, Microsoft, Google, Sun and Yahoo exemplify the use of cloud computing. It is being adopted by individual users through large enterprises including General Electric, L'Oral, and Procter & Gamble.

Pros and Cons w.r.t. Cost & Security Pros:

Lower computer costs. Improved performance. Reduced software costs. Instant software updates. Unlimited storage capacity. Increased data reliability. Latest version availability.

Cons:
Can be slow Features might be limited Stored data might not be secure Stored data can be lost Requires a constant Internet connection Does not work well with low-speed connections General Concerns

Risk Mitigation

1. Privileged user accessinquire about who has specialized access to data and about the hiring and management of such administrators. 2. Regulatory compliancemakes sure a vendor is willing to undergo external audits and/or security certifications. 3. Data locationsask if a provider allows for any control over the location of data. 4. Data segregationmake sure that encryption is available at all stages and that these "encryption schemes were designed and tested by experienced professionals". 5. Recoveryfind out what will happen to data in the case of a disaster; do they offer complete restoration and, if so, how long that would take. 6. Investigative Supportinquire whether a vendor has the ability to investigate any inappropriate or illegal activity. 7. Long-term viabilityask what will happen to data if the company goes out of business; how will data be returned and in what format.

QUESTIONNAIRE RESULT
Q1). How many employees does your company have? 1 49 50 249 250 or more 0 1 5 0% 17% 83%

Q2). Which industry sector does your company belong to? ICT Manufacturing Trade Financial Services Government Other 2 1 1 2 0 0 33% 17% 17% 33% 0% 0%

Q3). Company location? Local company Local company with the foreign affiliates Part of an international corporation Q4). Have you used, or are you planning to use Cloud Computing services? Yes No 6 0 100% 0% 2 2 33% 33%

33%

Q5). Is your organization using any of the following Cloud

Computing services? Cloud Computing used in the past, but projects have been discontinued None at present, and not planning within the next 12 months None at present, but planning within the next 12 months Running a pilot project at present Running a production system at present IaaS: Cloud Computing used in the past, but projects have been discontinued. None at present, and not planning within the next 12 months. None at present, but planning within the next 12 months. Running a pilot project at present. Running a production system at present. PaaS: 0 0% 0 0%

0%

17%

3 2

50% 33%

17%

17%

0 4

0% 67%

Cloud Computing used in the past, but projects have been discontinued. None at present, and not planning within the next 12 months. None at present, but planning within the next 12 months. Running a pilot project at present. Running a production system at present. Q6). What percentage of your IT operational expenditure is constituted by Cloud Computing services (i.e. SaaS, IaaS and PaaS together)? 1 25% 26 50% 51 75% 76 100% 6 0 0 0

0%

0%

67%

1 1

17% 17%

100% 0% 0% 0%

Q7). What percentage each Cloud Computing service type (i.e. SaaS, IaaS and PaaS) represents? [NOTE: Answers' total must be 100% ] 10% 20& 30% 40% 50% 60% 70% 90% 100% 0 0 1 3 2 0 0 0 0 0% 0% 17% 50% 33% 0% 0% 0% 0%

IaaS 10% 20& 30% 40% 50% 60% 70% 90% 100% 0 1 1 2 2 0 0 0 0 0% 17% 17% 33% 33% 0% 0% 0% 0%

PaaS

10% 20& 30% 40% 50% 60% 70% 90% 100%

1 2 1 2 0 0 0 0 0

17% 33% 17% 33% 0% 0% 0% 0% 0%

Q9). How many Cloud Computing service providers do you have? - # local service providers 0 1 2 3 3+ 0 0 3 1 2 0% 0% 50% 17% 33%

Q9). How many Cloud Computing service providers do you have? - # global service providers 0 1 2 3 3+ 1 1 0 0 4 17% 17% 0% 0% 67%

IaaS - # local service providers

0 1 2 3 3+

0 0 3 1 2

0% 0% 50% 17% 33%

IaaS - # global service providers 0 1 2 3 3+ 1 1 0 2 2 17% 17% 0% 33% 33%

PaaS - # local service providers 0 1 2 3 3+ 0 0 3 1 2 0% 0% 50% 17% 33%

PaaS - # global service providers 0 1 2 3 3+ 1 1 0 0 4 17% 17% 0% 0% 67%

Q13). What were your main motivations for adopting Cloud Computing? Cost reduction (TCO) Improved ROI Improved support for business processes Better responsiveness to changing requirements Rapid implementation Improved scalability (elasticity) 6 6 6 100% 100% 100%

83%

5 4

83% 67%

People may select more than one checkbox, so percentages may add up to more than 100%. IaaS Cost reduction (TCO) Improved ROI Improved support for business processes Better responsiveness to changing requirements Rapid implementation Improved scalability (elasticity) 5 5 4 100% 100% 80%

100%

5 4

100% 80%

People may select more than one checkbox, so percentages may add up to more than 100%. PaaS

Cost reduction (TCO) Improved ROI Improved support for business processes Better responsiveness to changing requirements Rapid implementation Improved scalability (elasticity)

5 5 5

83% 83% 83%

100%

5 4

83% 67%

People may select more than one checkbox, so percentages may add up to more than 100%. Q14). How did you evaluate the suitability of Cloud Computing for your organization? Using our own research Based on a recommendation of service provider/system integrator 5 6 83% 100%

People may select more than one checkbox, so percentages may add up to more than 100%.

Q15). What were your main concerns before deciding to adopt Cloud Computing? High Cost Security concerns Governance concerns Lack of control over resources Lack of availability of suitable services Concerns about service availability Network speed issues Dependence on external service provider Legal constraints 5 5 5 5 4 83% 83% 83% 83% 67%

83%

4 4

67% 67%

67%

People may select more than one checkbox, so percentages may add up to more than 100%. IaaS High Cost Security concerns Governance concerns Lack of control over resources Lack of availability of suitable services Concerns about service availability Network speed issues Dependence on external service 5 5 4 4 5 83% 83% 67% 67% 83%

83%

5 4

83% 67%

provider Legal constraints 5 83%

People may select more than one checkbox, so percentages may add up to more than 100%. PaaS High Cost Security concerns Governance concerns Lack of control over resources Lack of availability of suitable services Concerns about service availability Network speed issues Dependence on external service provider Legal constraints 5 5 5 4 5 83% 83% 83% 67% 83%

67%

5 5

83% 83%

100%

People may select more than one checkbox, so percentages may add up to more than 100%.

Q16). What are your main concerns now, i.e. after adopting Cloud Computing? High Cost Security concerns Governance concerns Lack of control over resources Lack of availability of suitable services Concerns about service availability Network speed issues Dependence on external service provider Legal constraints 5 5 5 4 4 83% 83% 83% 67% 67%

67%

5 6

83% 100%

67%

People may select more than one checkbox, so percentages may add up to more than 100%. IaaS High Cost Security concerns Governance concerns Lack of control over resources Lack of availability of suitable services Concerns about service availability Network speed issues Dependence on external service provider 4 3 3 4 2 67% 50% 50% 67% 33%

50%

4 6

67% 100%

Legal constraints

67%

People may select more than one checkbox, so percentages may add up to more than 100%. PaaS High Cost Security concerns Governance concerns Lack of control over resources Lack of availability of suitable services Concerns about service availability Network speed issues Dependence on external service provider Legal constraints 5 3 3 4 5 83% 50% 50% 67% 83%

33%

6 4

100% 67%

67%

People may select more than one checkbox, so percentages may add up to more than 100%. Q17). How would you characterize the result of the implementation of Cloud Computing in your organization? Not Applicable Total Failure Partial Failure Success, but limited benefits Success, benefits as expected Success, exceeded expectations 0 0 0 2 0% 0% 0% 33%

33%

33%

IaaS Not Applicable Total Failure Partial Failure Success, but limited benefits Success, benefits as expected Success, exceeded expectations PaaS Not Applicable Total Failure Partial Failure Success, but limited benefits Success, benefits as expected Success, exceeded expectations 0 0 0 1 4 1 0% 0% 0% 17% 67% 17% 0 0 0 2 2 2 0% 0% 0% 33% 33% 33%

CONCLUSION
Companies have to pick and choose and be careful with what data they allow to be out there in a cloud. Cloud computing can be a useful resource to help companies save money but can also have downfalls. The average citizen doesn't want their personal information unprotected and available. As companies perfect their cloud computing services, I think that more companies will be open to using these services. This service will provide new inventive ways to use computers and provide services.

By eliminating the problems of traditional application development, cloud computing technology frees you to focus on developing business applications that deliver true value to your business (or your customers). The platform lets IT innovate while avoiding the costs and headaches associated with servers, individual software solutions, middleware or point-topoint connections, upgradesand the staff needed to manage it all. Cloud Computing Brings Possibilities.. Increases business responsiveness Uses IT resources efficiently via sharing and higher system utilization Reduces energy consumption Handles new and emerging workloads Scales to extreme workloads quickly and easily Simplifies IT management Platform for collaboration and innovation Cultivates skills for next generation workforce

The results states that the utility of the Cloud matches the need of the todays Business. Because of the dynamic changing environments, the workload can shrink or grow very fast which causes a problem for the enterprise to scale up or down immediately. Moreover the features that were used by the Technical giants and not affordable by small enterprises due to heavy pricing can now be made available to them. Cloud does not suit well to the Financial enterprise that have sensitive data and are not willing to disclose it to the third part vendors.

References
[1]. NIST Definition of Cloud Computing v15 [2]. www.infoworld.com/article/08/04/07/15FE-cloud-computing-reality_1.html [3]. www.wiki.cloudcommunity.org/wiki/CloudComputing:Bill_of_Rights [4]. www.davidchappell.com/CloudPlatforms--Chappell. PDF [5]. www.amazon.com [6]. www.thinkgos.com/cloud/index.html [7]. www.salesforce.com [8]. www.google.com [9]. Chip Computer Magazine, December 2008 - Feb 2009 Edition [10]. Larry Ellison, Wall Street Journal, September 26, 2008 [11]. Andy Isherwood, ZDnet News, December 11, 2008 [12]. Richard Stallman, The Guardian, September 29, 2008 [13]. Brad Jefferson CEO - Animoto 2009 [14]. Mark Benoiff CEO - www.Salesforce.com [15]. Vivek Kundra Federal CIO, United States Government [16]. Sys-Con Cloud Computing Journal [17]. www.wikipedia.com [18]. www.iitweb.bloomu.com [19]. www.devcentral.f5.com