ABSTRACT

Table Of Contents

1. Introduction.

2. Cloud Computing.

2.1 Impact of Cloud Computing on Business.

2.2 Impact of Cloud Computing on Society.

3. Data Centre

3.1 Impact of Data Centers on Business.

3.2 Impact of Data Centers on Society.

4. Conclusion.

5. References.
 1. Introduction

The “Cloud” stands for internet based computing resources, as often portrayed in
network diagrams. So, what is cloud computing? , Is it a new technology? As the name suggests it is a
computing, or to be more specific, a networking model, where data or applications are hosted on the
internet by different vendors or service providers and users can access and use it as long as they are
connected to the web .It is a new way of thinking or a new business model where everything is a service
and gives a whole new spin to the Service Oriented Architecture (SOA) [Dr. Paul Sant, 2010] of internet .
The best part of cloud computing is that the service offered is more vital than the underlying or
supporting hardware or infrastructure. The services can be in the form of Software, Platform,
Infrastructure or a combination of the three on a pay-as-you-go basis .The service models employed on
the cloud can be any of the following three.

 Software As A Service (SaaS) : is about providing software solutions to the clients over the
internet or cloud on a pay-per-use-basis.[ Wei SUN, ChangJie Guo, Zhongbo Jiang,2010].The
client is not interested in knowing where the applications are executed or stored. Some examples
include online webmail services like Gmail,Hotmail,etc, Customer Relations Management
applications hosted by SalesForce.com and document editing software like GoogleDocs. [Leonard
Francis, 2009]

 Platform As A Service (PaaS) : Cloud service providers offer clients a platform as a service where
they can use the available development tools to create their specific applications and deploy or run on
it. Examples include Google App and Microsoft Azure. [Leonard Francis, 2009].

 Infrastructure As A Service (IAAS): As the name suggests computer hardware

infrastructure is offered as a service, where clients can buy computing power and storage
resources as per their demand. At this level, clients can run any operating system, the
 Infrastructue supports and can create their own applications based on the operating
system selected .Amazon EC2 and Flexiscale are examples of similar service providers.
[Leonard Francis,2009]

Organizations migrating to cloud can choose to deploy their applications on a Public Cloud
Environment or Private or Public or Community Oriented. A private cloud is build and managed by an IT
department of a company, whereas a public cloud as the name suggests is run by a vendor. Community
oriented is where the platform is shared by a community of companies who serve a similar customer
base and share common business model. [Leonard Francis,2009]

Source: www.financialexecutives.org

2.1 Impact of Cloud Computing on Business.

 Over the past few years, there has been a surge in businesses migrating their business to
cloud. It is estimated that by 2020,almost 15 percent of consumer and business data will reside on the
cloud and nearly one-third of all internet data will pass through the cloud infrastructure.[World
Economic Forum,2010].So what are the reasons for this paradigm shift in business model or how does
cloud computing affect businesses?.

 Cost

According to Nicholas G. Carr [ Nicholas G.Carr ,2003] ,half of the capital

investment of modern companies is Information and communication technologies(ICT)
related. A 2006 e-Business survey conducted by e-Business Watch of the European
Commission gives a better picture of the average contribution of ICT budget against total
cost ,by sector (figure 2).[ Federico Etro,2009]

Figure 2 : Average share of ICT budget per sector.

Source: http://www.ebusiness-watch.org/key_reports/documents/EBR06.pdf

Cloud computing can effectively reduce ICT expenditure required to compete in the ever
growing and every demanding competitive economy. Organizations need not worry about
the huge up-front costs involved to acquire expensive IT infrastructure. It can be a great
technology leveler for new and existing SMEs(Small And Medium Enterprise) where they
can just hire storage facilities and expensive and high performance computing power so
as to give them an opportunity to rival even those Fortune 500 companies. Add to that
 the cost of maintaining a local IT infrastructure and you need a fortune. Another
advantage of such a business model is that the companies can invest more on their core
business functions and concentrate on what they best do.

 Cloud And The Value Chain

Cloud services can contribute better to the value chain of a company, where ICT is
not a core business.Here is a figure illustrating a classic value chain of a company (without
ICT as a contributor) as suggested by M.E.Porter.
[Porter, 1985]

A Classic Value Chain as described M.E.Porter

Source:https://www.os3.nl/_media/2009-
2010/students/alain_van_hoof/icp/cloud_and_value_chain.pdf?id=2009-
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In this age of Information,the classic value chain obviously has its short comings,so it is
been given a new dimension by M. Holweg and F.K. Pil [Holweg and Pil, 2006].where ICT
plays a huge role by contributing a lot to the value chain of a company.The use of internet or cloud
allows a standalone ICT resources of a company a competitive edge. So here is an extended or
modified version of a value chain where cloud services play a huge role.[ Alain van Hoof,2010]
 An extended value chain by Alain van Hoof

Source:https://www.os3.nl/_media/2009-
2010/students/alain_van_hoof/icp/cloud_and_value_chain.pdf?id=2009-
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 Scalability or Elasticity

It is a business model which allows scaling computing resources according to

the demand and makes it easy to manage these resources. For example, in case of a
retailer like Tesco, they do not have to worry about running out of computing resources
during the Christmas season when they sell most .If they have a cloud centric business
model, they can easily meet the demand by just running a few applications to scale their
resources as and when required and offers better economy of scale. In a traditional
model, scaling the existing hardware resources can be time consuming and expensive.

 Utility Computing
 This is the best part of the story called Cloud Computing. Paying for the
computing resources is as easy as paying electricity bills. You can turn on or turn off your
IT resources like an electric switch and you need to pay only for the services used.

 Multi-Tenancy and Virtualization

Cloud computing owes a lot of its success to the virtualization

technology.Virtualization allows for abstracting the hardware layer so that multiple applications can be
run on the same hardware or a single application on many machines.You do not have to worry about
hardware and software compatibilities when you have virtualization software running an abstraction
layer.It is this phenomenon which gives the service orientation to cloud computing.A service provider
can provide clients with a customized virtual application instance and effectively utilize its resources and
better economies of scale. [Leonard Francis,2009]

 Fault-Tolerance

Cloud vendors can provide better fault-tolerence and redundancy than in-
house IT department and clients can afford .From a client point of view,they do no have to
invest in RAID arrays and expensive storage racks and server space.

 Ease and Speed Of Deployment

The cloud business model can reduce product development cycle and help
deploy applications easily and rapidly. It also allows adjusting to ever changing market demands and
being helps to explore new markets cost effectively.

2.2 Impact of Cloud Computing on Society.

 Cloud Computing in Health Care

Healthcare can borrow a lot from the cloud .The way cloud computing operates
 and its benefits can change the way health care system operates across the world.Hospitals
need not invest in buying expensive and latest IT infrastructure to maintain patient medical records.The
records could be saved on the cloud and make all the information available at the point of care.It can be
a huge blessing for improving healthcare across poor nations who cannot afford the huge investment in
ICT. Cloud helps in exchanging information effectively and can help improve mobility in healthcare
systems.

It can also bolster drug research which requires huge computing power.Companies involved in drug
research can access high performance computing on the cloud at much reduced cost.

 Cloud Computing can transform Education

Cloud with its dynamic scalability, virtualized resources and service oriented
architecture can be a real boon for educational institutions, especially those in the
developing world who have budget constraints, in providing a quality and level of
education only best in the world can offer. They can make use of the free cloud based
applications offered (like Google docs or the online version of Adobe Photoshop), and free
online storage resources (like Microsoft SkyDrive) for computer intensive studies. They do
not have to buy expensive IT equipment to provide advanced and technical courses to
their students. Even a netbook which costs one-fourth of the price of an expensive
computer can do the trick.[ Tuncay Ercan,2010][ Douglas R. Holschuh, David C.
Caverly,2010]. Students at Computational Intelligence Research Group at the University
of Pretoria, South Africa, rely on cloud for their research in pursuit of drug for Africa-
based serious illnesses.[ Nir Kshetri,2010].

 Cloud and Developing Countries

Cloud computing is definitely breaking down barriers between the rich and
poor nations in terms of IT infrastructure and is giving an opportunity for those in the
third-world countries to dream and aspire big. Here is a case study of how cloud is going
creative in providing jobs to refugees in Kenya.A U.S based company,CrowdFlower has a
new IPhone application which helps organizations looking for temporary workers link
them to those without jobs in Kenyan refugee camps.The app helps companies outsource
simple tasks like finding phone numbers in US for marketing purpose and storing them in
spreadsheets.158,000 similar tasks have been outsourced and they earn as much as U.S
$28 per week, which is about eight times more than they ever earned.[ Samuel
Greengard,2010].Another instance of Cloud for the masses comes from China,where a
majority of the population do not have access to computers.China has been investing
heavily in the cloud to provide its masses with basic services like messaging and access to
information through mobile phones.[ Mark A. Goodburn,Steve Hill,2010]
 Here is another success story,as reported by New York Times, Wilfred Mworia, a
22-year-old developer in Nairobi, Kenya, developed an iPhone application using only an
online iPhone simulator ( there are no IPhone services available in Kenya) and can sell all
over the world through cloud.[ Samuel Greengard,2010].Let us hope that this is just a
beginning and there will be more success stories to follow.

4. Conclusion

It is hard to flip a page through a business or IT magazine without spotting the word
“Cloud Computing” these days. There is so much hype about this phenomenon that
everyone wants to join the bandwagon. There have been just too many instances in
history when something new comes up,have so much hype built around it and then it just
fades out into history.It is true that cloud can transform businesses but will it be limited to
a handful of companies.IT revolution in the late 1970’s and early 1980’s created
companies like Microsoft,Apple,Intel,etc and they still enjoy an unprecedented monopoly
over the market to the extent that they can even control a country’s economy.I hope
Cloud does not end up creating another batch of Microsofts and Intels .Let it be a great
leveler to the industry as many hail it and does not disappear into vapour someday..
5.References

1 . Dr. Paul Sant (2010), Service Oriented Architectures, SOAP, WSDL and UDDI [Online]
Available at : http://breo.beds.ac.uk (Accessed on : 18-1-2011).
2 . Wei SUN, ChangJie Guo, Zhongbo Jiang (2010), Design Aspects of Software as a Service
to enable e-Business through Cloud Platform [Online]
Available at : http://www.computer.org/portal/web/csdl/doi/10.1109/ICEBE.2010.52
(Accessed on : 18-1-2011).
3.Leonard Francis (2009),Cloud Computing:Implications for Enterprise Software Vendors (ESV)
[Online]
Available at : http://dspace.mit.edu/handle/1721.1/47862
4. World Economic Forum (2010), Maximizing Cloud Computing,[Online]
Available at: http://www.weforum.org/sessions/summary/maximizing-cloud-
computing?fo=1
5. Federico Etro(2009),The Economic Impact of Cloud,[Online]
Available at : http://www.intertic.org/Policy%20Papers/CC.pdf (Accessed on : 18-1-2011).

6.Nicholas G. Carr ,2003, IT Doesn’t Matter, Harvard Business Review,[Online]

Available at : http://hbr.org/2003/05/it-doesnt-matter/ar/1 (Accessed on : 18-1-2011).

7.Tuncay Ercan,2010, Effective use of cloud computing in educational institutions

Available at : http://www.sciencedirect.com/science
(Accessed on : 18-1-2011).
8.Douglas R. Holschuh, David C. Caverly,2010, Techtalk: Cloud Computing and Developmental
Education
Available at : http://www.ncde.appstate.edu/publications/jde/document
(Accessed on : 18-1-2011).

9. Samuel Greengard,2010, Cloud computing and developing nations

Available at :
 http://www.scirus.com/srsapp/sciruslink?src=web&url=http%3A%2F
%2Fwww.informatik.uni-trier.de%2F~ley%2Fdb%2Findices%2Fa-tree%2Fg%2FGreengard
%3ASamuel.html
(Accessed on : 18-1-2011).
10. Mark A. Goodburn,Steve Hill,2010,

Availableat:http://www.kpmginstitutes.com/financial-reporting-network/insights/2010/pdf/fei-
reprint.pdf
11. Nir Kshetri,2010,Cloud Computing in Developing Economies,[Online]
Available at: http://www.computer.org/portal/web/csdl/doi/10.1109/MC.2010.212

12. Michael E. Porter. Competitive advantage: Creating and sustaining superior

performance. Free Press, New York and London, 1985.
Michael E. Porter and Victor E. Millar. How information gives you competitive
advantage. Harvard Business Review, 63(4):149{162, 1985.

13. M. Holweg and F. K. Pil. Evolving from value chain to value grid. MIT Sloan
Management Review, 47(4):72{80, 2006

14. Alain van Hoof,2010, Cloud services and the value chain
Available at :

https://www.os3.nl/_media/2009-

2010/students/alain_van_hoof/icp/cloud_and_value_chain.pdf?id=2009-

2010%3Astudents%3Aalain_van_hoof%3Aicp%3Aassignments&cache=cache