Cloud Computing – Economics, Service Model & Challenges

cloudCLOUD computing is the latest way of delivering computing resources. It runs on the established convention of the internet where clients and servers interact remotely and on demand. In fact, the working as well as the revenue model is so similar that it can be referred to as ‘Internet as a Product.’ Cloud computing delivers services ranging from data storage to end-to-end computing; and one can run the entire SAP or kindred application suit, share files, store videos, run email clients or use the platform to collaborate in real time from anywhere in the world through even the most basic computing devices. Cloud computing takes away the task of infrastructural deployment and makes technology, platform or just software readily available commodities just like electricity. One pays as per the usage besides other set up costs, which when combined, are far less than the conventional ways of acquiring technology.

Economics of Cloud Computing – From being free to an on-demand solution, it (cloud computing) has the innate quality of adapting itself to the requirements of the user. Following the 2007-2009 recession, when cost cutting became a prominent part of business best practices, cloud computing offered a new economic model for enterprises to exploit.

According to IDC’s analysis, the forecast for 2013 amounts to $44.2 billion. The reason for such a new economic order is the flexibility and cost efficiency offered by cloud computing. Massive investments are being made to concentrate the hardware and the architecture is being revamped to offer global capabilities.

Cloud Computing Service Model – The real highlight of cloud computing is its versatility and adaptability. One can categorize the service provided by cloud computing in three classes:

Software as a service (SaaS): It is software, available on demand and offered by a third party provider, configurable remotely via the internet. Best examples are online spreadsheet tools, word processing and web content delivery services (SalesforceCRM, Google Docs, etc) and CRM services.
Platform as a service (PaaS): It allows customers to use the platform to develop new applications using APIs, which can be deployed and configured remotely. The platform offers development tools and configuration management. PaaS examples are Microsoft Azure, Force and Google App engine.
Infrastructure as a service (IaaS): This provides abstracted hardware, virtual machines and operating systems, which are controllable through a service API. IaaS examples are AmazonEC2 and S3, Terremark Enterprise Cloud, Windows Live Skydrive and Rackspace Cloud.

Challenges – As cloud-computing is a centralized way of operation, clouds can be easily tracked and attacked. Also, as access remains global, monitoring intrusion becomes a challenge as well. Though deploying safe practices at the client’s ends can check trespassing, the multitude makes the task bigger. Another big challenge is the easy access of cloud computing platforms to the user’s data. Moreover, many public cloud-computing platforms are not open to auditing of their security measures.

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