Cloud Computing can be seen as the logical evolution in outsourcing IT services. The promise is that, with Cloud Computing, every company (big or small) can get IT services in a very simple way. Cloud Computing is an epitome of the change in use of IT Infrastructure and Services as the consumers will not have to spend capital of owning or renting the Hardware/Software rather they can use the resources and expense is cut down to usage only.
So, cloud computing would give extra business value over a long period of time along ensuring that the quick changing business needs can be supported better than using traditional IT services. It seems like creating a prospective horizon for changing the Information Technology world into different form than what we perceive it today.
With this change there would be certain pros and cons associated. As of now the visibility on the implications is not very distant and requires a wait and watch strategy to gradually build/change the business models for different domains.
Having the basic idea about Cloud Computing, in this blog we will discuss the pros and cons of cloud computing in general and would try to understand possible impact of these on the different domains.
We would see large range of highly scalable new generation agile products and services to choose from. These would provide abstraction from current process and thereby reduction in the overall cost.We also expect some standardization to come into picture.
Some of Pros are enlisted here:
Reduced Cost: Costing model is incremental i.e. pay only for what you use thus saving the money.
Increased Storage: Since resources provided by the Cloud Service Provider are virtualized and can be scaled up as required gives the consumer flexibility of unlimited storage space.
Highly Automated: Most of the things are responsibility of CSP like Software/Server update, physical maintenance of infrastructure, licensing of software/tools etc
Mobility & flexibility: Information/service is accessible from anywhere seamlessly if cloud is accessible
Currently this seems like dominance of few gig players (Amazon/Google/Oracle) and thus rise of new industry leaders and IT vendors will leave fewer options for small software companies to cope up with the evolving business model.
The other cons that we can list are:
Security: A proper security model for cloud computing is still awaited. Physical location of hardware and software being unknown would make site inspections and audits difficult. There is also risk of data loss due to improper backups or system failures in the virtualized environment.
Dependency (Loss of Control): Most of the critical things are under control of CSP (Cloud Service Provider) like – Quality of Service (QoS), Contingency Procedures, Measurement of resource utilization
Cost: Cost structure would be difficult to analyze during initial setup/migration as there could be associated hidden costs for backup, restore, disaster recovery, issue solving and compliancy regulations. Moreover future changes in the cost should also be taken into consideration.
Decreased Flexibility: Migration to different CSP would not be simple and would require proper planning starting right while developing the applications (making them generic and portable)
Taking specific businesses into account
Telecom: Telecom sector is one of the biggest consumers of IT infrastructure, may it be software or hardware so we can expect it to be affected at all levels viz Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS). Cloud Computing is based on virtualization of the resources much like running multiple VMs on same hardware, we know that there would be some trade-off for this in terms of lag due to network/virtualization. The lag of fraction of second could be fine for data traffic on the network but may not be up to mark for real time voice/video based services. So it looks like some services would still require dedicated resources/hardware to meet up the SLAs.
Healthcare: Quite obviously medical businesses generate huge amount of data like patient records, biomedical research, insurance claims. It is one of the major concerns for hospitals, insurers and researchers to manage this large amount of data. Cloud computing would offer each of these players a potentially more cost-effective alternative to traditional data storage and management solutions. But still there is fear that sharing a platform in a public cloud would compromise privacy regulations, So need of a strong regulatory standard is necessary.
E-Commerce: Cloud computing would be boon to the businesses in e-commerce as they are the ones working in a pretty similar fashion since a long time viz usually these businesses run virtually on the internet only, for this they have to setup virtual infrastructure and services from different vendors. Interaction with various vendors will now be eliminated and limited to a single service provider who can take care of all the requirements. So we expect a substantial growth of e-commerce to be obvious in near future.
Outsourcing: Most of the current business models associated with IT infrastructure and services do include outsourcing of various activities may it be maintenance or labor. With business migrating to cloud the need for these would be decreasing in long run as most of the things would be taken care by CSP. This means that there would be a downfall expected in requirement of traditional outsourcing but on the other hand the increase in specific outsourced services for migration to cloud can be seen. Overall there should be major change/shift in the outsourced services but this would be gradual.
Currently IT costs seem to be quite competitive but still remains inflated as compared to other products and services that we use today. We do see cloud computing as a potential candidate who can play the role of game changer and help to regulate the IT economics. But the side effects and implications are yet to be well totally foreseen and understood. Kindly share your thoughts and understanding on the above topic to have a fruitful interaction.