Benefits of Cloud Computing
Chapter 3: Benefits of Cloud Computing
The general benefits derived by adopting cloud computing are covered here
General Cloud Benefits: Cloud computing offers a range of benefits, including the potential fo
Rapid scalability and deployment capabilities that provides just in-time computing and infrastructure
· Decreased maintenance/upgrades
· Improved resource utilization- elasticity , flexibility, efficiencies
· Improved economies of scale
· Improved collaboration capabilities
· Ability to engage in usage-based pricing, making computing a variable expense, rather than fixed capital cost with high overhead
· Reduced information Technology ( IT) infrastructure needs- both up-front and support cost
· Capacity for on-demand infrastructure and computational power
· Green friendly – reduced environmental footprint
· Improved disaster recovery capabilities
Three distinct areas of benefits from the business perspective are
· Reduced investment and proportional costs
· Increased scalability
· Increased availability and Reliability
Reduced investment and proportional costs: A wholesaler purchases goods in bulk for lower prices and sells them to a retail customer at a profit. In a similar manner, public cloud providers base their business model on the mass-acquisition of IT resources and make them available to cloud consumers through attractive pricing packages. This opens the door for enterprises to gain access to powerful infrastructure without having to purchase it themselves. The most common economic justification for investing in cloud-based IT resources is in the reduction or outright elimination of up-front IT investment, namely hardware and software purchases and ownership costs.
Example: A startup enterprise cans investment a minimum in procuring hardware and instead avail cloud-based office management and production software.
Example: An educational institution may opt to use cloud-based software model to run its laboratory sessions. By doing so, it can avoid a lot of hardware investment such as buying servers.
One of the characteristics of cloud computing model is Measured Usage. It offers a feature-set that allows measured operational expenditure which is directly related to business performance to replace anticipated capital expenditure. This is termed as proportional costs. The elimination or minimization of up-front financial commitment allows enterprise to start small and accordingly increase IT resources allocation as it grows.
Example: A enterprise that specializes in design can sign-up for a one user cloud based software license to begin with and add additional licenses as and when new designers are recruited. This is also applicable to office productivity software such as Office 365 or Google Docs
In addition, reduction of up-front capital expenses allow for the capital to be redirected to core business investment. For example can invest money saved for hiring talented work force.
At the industry level, in its most basic form, opportunities to decrease costs are derived from the deployment and operations of large scale data centers by leading cloud providers. Such data centers are generally located in destinations where real estate, IT professional, and network bandwidth can be obtained at lower costs, resulting in both capital and operational savings
Example: Major cloud providers such as Google, rather than building a system (hence data center) from a moderate number of very high-performance computers, build their cloud hardware as a cluster containing a much larger number of commodity computers. Since they do not use state-of-the art hardware, they are not using the most expensive hardware. This approach translates in huge savings in building and maintaining data centers.
The contribution of cloud model towards cost reduction is true for software as well. It applies to operating systems, middleware or platform software and application software. Pooled IT resources are created and made available to and shared by multiple cloud consumers, resulting in increased or even maximum possible utilization. Operational costs and efficiencies can be further reduced by applying proven best practices and patterns for optimizing cloud architecture, their management and governance.
General Measurable Benefits to cloud users: Summary
· On-demand access to pay –as-you-go computing resources on a short-term basis (e.g. such as processors by the hour), and ability to release these computing resources when they are no longer need.
· The perception of having unlimited computing resources that are available on demand, thereby reducing need to prepare for provisioning well in advance
· The ability to add IT resources at a fine-grained level, such as modifying available disk space by a single gigabyte increment or modifying available computing power by a set of processors.
· Abstraction of infrastructure so application are not locked into devices or locations and can be easily moved if needed.
· Example: In an educational institution, where labs are traditionally built for separate subjects such as operating system labs, database labs with dedicated machines. This limits the option of students working from different labs. Student has to go to dedicated lab for conducting lab sessions. In a cloud model, this is overcome. Any student can login to any server from any lab and go ahead. This infarct overcomes the very idea of “dedicated” labs and makes every lab a general lab. In addition, students brining their own machines can also be allowed to access server resources and conduct their programming sessions.
· Example: An enterprise that is engaged in a batch-centric tasks can complete them as quickly as possible as their application can scale. Using 100 servers for one hour costs same as using one server for 100 hours. This “ elasticity” of IT resources, can be achieved without requiring steep initial investment to create an ad hoc large-scale computing infrastructure, can be extremely compelling. It is very handy in situation an enterprise a large computation capacity once a while.
Although the financial benefits of cloud model are evident and are there for everyone to see and verify, the actual economics can be complex to calculate and assess. The decision to go ahead with a cloud computing adoption approach will involve much more than a mere comparison between the cost of leasing versus cost of purchasing. For instance, the financial benefits of dynamic scaling and risk transference of both under provisioning and over provisioning need also be accounted for.
Financial benefits through cost saving from another perspective
In the traditional IT set cost of managing included the cost of procurement, installing, and maintaining. However in the cloud model cost saving offered by “ as-a-service’ usage model, where by technical and operational implementation details of IT resource provisioning are abstracted from the cloud consumers and packaged into “ready-to-use” solutions. These service-based products can simplify and expedite the development, deployment, and administration of IT resources when compared to performing equivalent tasks with on-premise solutions. The consequent savings in time and required IT expertise can be considerable and can contribute to the justification of adopting cloud computing.
Scalability Benefits: Cloud provides pools of IT resources bundled with tools and technologies designed to leverage them collectively, enable users to instantly and dynamically allocate IT resources to cloud consumers, on-demand or through the cloud user’s direct configuration.
Figure: Classroom consumption and workshop consumptions are easily and seamlessly met by cloud services
Example: A Gmail user can add additional storage by
This empowers cloud consumers to scale their cloud-based IT resources to accommodate processing fluctuations and peaks automatically or manually. Similarly, cloud-based IT resources can be released as processing demand diminish.
Example: usage demand fluctuation throughout 24 hour period
The inherent, built-in feature of cloud to provide flexible levels of scalability to IT resources is directly related to usage based or proportional cost benefit. The ability of cloud IT resources to always meet and fulfill unpredictable usage demands along with its controlled allocation and its correlated financial gain ensures that no business is lost when usage thresholds are crossed.
Increased Availability and associated Reliability: Outages limit the time an IT resource can be “ available for business” for its users, thereby limiting its usage and revenue generating potential. Run time failures that are not immediately attended to and corrected at once can have a more significant impact during high-volume usage periods.
Example: For passenger interested in travelling by Indian Railways, the Tatkal tickets are available only during certain period of the day. If the online reservation system does not cope up with demand or becomes “not available” – passengers get disappointed and railways loose revenues
Not only is the IT resource unable to respond to customer requests, its unexpected failure can decrease over all customer confidence. A hallmark of the typical cloud environment is its intrinsic ability to provide extensive support for increasing the availability of a cloud-based IT resource to minimize or even eliminate outages, and for increasing its reliability so as to minimize the impact of runtime disruptions.
Practical Benefits for Enterprises:
· An IT resource with increased availability is accessible for longer periods of time, say 24 hours a day. Cloud providers generally offer “resilient” IT resources for which they are able to guarantee high levels of availability.
· An IT resource with increased reliability is able to better avoid and recover from exception condition or disruptions. The modular architecture of cloud environments provides extensive failover support that increases reliability
Practical World
While cloud has inherent quality to offer “ always on” availability of IT resources and hence reliability, it is important to note that enterprises carefully examine the Service Level Agreements (SLA)s offered by cloud providers to check whether such a commitment is made by them. Although many cloud providers are capable of offering remarkably high levels of availability and reliability, it finally boils down to the guarantees made in the SLA that practically represents their contractual obligations.
------------------------------------------
The Business Benefits of Cloud Computing
From business perspective, cloud computing offers the following benefits.
Lower Costs and Less Risk- In comparison to traditional on-premise hardware and software, the upgrade and migration costs are reduced including the time and effort to manage the processes as well as the up-front need to over purchase infrastructure in order to handle the peak demands. Additionally , consumers pay by the user so as a consumer you can adjust the number of users up and down as business needs change versus up-front long-term committed license and infrastructure costs as with on-premise solutions. On-premise upgrade introduce the potential risk for business interruption and will definitely consume valuable resources during the process, which is not the case with cloud computing. You don’t spend time away from running the business to worry about hardware and software issues, performance upgrades, and the need for infrastructure service packs/patches to ward of security threats. This is very applicable if you have made customization to your on-premise solutions because of the need for regression testing against the upgrade as well as integration testing with other systems
Simplification-The cloud computing model is based on standardization which can bring significant efficiencies and lower costs - mainly simplification. This translates into lower implementation time and cost as well as less risk for an extended project implementation
Payment- Many service providers and their channel partners will take payment via a credit card. While purchasing software is not necessarily new, the ability to order the service on-line and having it available ( running) almost immediately is. This payment method is mainly used for standard configurations with the ability to make minor configurations changes to the application
Trials- With cloud computing, some providers offer trials so you can “ test drive” the service for a fixed period of time, some allow you to configure the trial service to meet your specific business requirements and then the ability to migrate your environment to production if you elect to subscribe to the service
Who can use cloud computing: Benefits of Cloud Computing
Cloud computing is a generic resource or utility like electricity or water. Almost anyone and practically everyone can benefit from cloud computing. Here is a suggested list of Cloud Beneficiers
1. Collaborators: These are the days of teams and collaboration. Whether you are part of a software development team or sales team you need to work with other team members. Often you to work from different locations. Cloud computing provides a collaboration tools to help you connected with team members and work without disruption. Google Docs is one well known collaboration tool that helps you create documents, presentations and more in collaboration mode
2. Mobile workers- These days people work from different locations on different days and times. One day you may work from home, another day from office, third day in a hotel and next day on travel. Cloud computing tools help you carry your work documents wherever you go.
3. Cost-conscious User- Cloud computing services start with zero investments. They need no software purchasing, installation or patch updates. Even hardware purchases can be avoided when new versions of software demand additional storage or RAM
4. Cost Conscious Departments - Cloud computing do away with owning expensive hardware and help companies to reduce or even eliminate investments in terms of hardware purchases. Companies can use cloud based services and avoid developing internal services. Even when companies Grow and need to add additional employees cloud services allow that flexibiliy.
5. Parents Can Use Cloud Computing to Help With children's Homework, Cloud Computing is used for National defence Purposes. It may use in cricket for building winning strategies by enabling teams to analyze on-the-ground trends, the behaviour of the pitch, the strategy to be deployed against a particular player, on a particular ground, etc. Data was available for all one-day games, including the domestic ones, whenever required.
6. Bollywood movie maker migrated 80% IT infrastructure to cloud Hungama Digital Media Entertainment, the world's largest developer and publisher of Bollywood pictures, formulated a "cloud strategy” two years ago in order to capture the cost efficiencies that cloud computing brings and to vary its operational expenditure (opex) investments.
7. Cloud Election
But putting all these factors together, there is a case to make Indian elections “cloud-enabled” by 2020. Now, it is common for you to take part in online polls on many websites, and these generate instant results, often showing simple preferences on various themes.