Case Study : Should business move to the Cloud?
Background Information:
Cloud computing has become to take place in the business world today. The biggest player in the cloud computing marketplace as we not expected, its Amazon, yes Amazon,
purchasing books via Amazon website, that Amazon. ‘Cloud’ refers to the internet grid network and ‘Computing’ refers to the uses of technology. National Institute of Standards and Technology Laboratory (NIST) introduced Cloud Computing as for enabling convenient, on-demand network access to a shared pool of configured computing resources.
Under one of its Web Services division (AWS), Amazon has successfully streamlined cloud computing and made it to be affordable and viable option for companies ranging from small internet-start-ups to the more established ones like FedEx (Federal Express, courier).
To make things easier for participating business subscribers, Amazon has made it even simpler by adding automated service named CloudFormation that assist customers to get the right amount of computing resources. Customers were to provide the amount of server space, bandwidth, storage and any other services that they require and AWS will automatically allocate those resources.
What business benefits do cloud computing services provided? What problems do they solve?
There are many benefits that cloud computing services provide. Like AWS by Amazon they cater and support the biggest marketplace for global trade and cloud computing provides customers with abundance of resources that they required for example Zynga, the developer of Facebook applications such as Farmville. Businesses benefits in term of storage and spend less in the maintenance and management of database servers and their IT Infrastructure. This very ideal for small start-ups internet business to a more bigger and well established companies.
Basically, AWS provides subscribing companies with flexible computing power and data storage, as well as data management, messaging, payment and other services that can be all used together or individually depending on the business requirement.
To make things easier for participating business subscribers, Amazon has made it even simpler by adding automated service named CloudFormation that assist customers to get the right amount of computing resources. Customers were to provide the amount of server space, bandwidth, storage and any other services that they require and AWS will automatically allocate those resources.
Amazon cloud computing sales catch is that subscribers don’t have to pay a monthly or yearly fee to use their computing resources and instead, subscribers only need to pay for exactly what they have used and this business strategy is so appealing proposition because it allows AWS to handle all of maintenance and management of IT infrastructures, and leave business subscribers to spend more time on higher-value work. This sounds so convincing.
What are the disadvantages of cloud computing?
Apart from the convenience of cloud computing the two main concerns of companies using cloud computing has always been about its disadvantages in reliability and security.The two main issues remained as the major concerns and a barrier to the widespread adoption of cloud computing. Amazon’s cloud had experienced significant outage resulting in significant ripples across the entire web. A simple network configuration error caused a multiday service outage. A simple error made by human being during network adjustment.
AWS cloud computing provider also suffered outages due to power failures where many popular websites like Netflix, Heroku, Quora, Interest and website of other smaller companies were offline for hours. The outages were proof that the vision of a cloud 100 percent uptime is still far from reality. Even a small amount of downtime can lead to large revenue losses for firms that need 24/7 availability.
How do the concepts of capacity planning, scalability and TCO apply to this case? Apply these concepts both to Amazon and to subscribers of its services.
Capacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its products. Scalability refers to the ability of a computer, product, or system to expand to serve a large number of users without breaking down. Total Cost of Ownership of Technology Assets refers to the actual cost of owning technology resource that include the original cost of acquiring and installing software and hardware and on-going administration costs of hardware and software upgrades, maintenance, technical support, training, and even utility and real estate costs for running and housing the technology.
In this case, all these three concepts fit the case on cloud computing. Certainly these concepts need the technology of cloud computing and the other way round. As being the dominant online retailer, Amazon in need of a huge fixed cost to maintain and supports its massive CRM cloud computing infrastructure. Capacity planning and scalability and TCO is important to Amazon for its managers in decision making as products and customers being the utmost importance. Drastic development change in product and service saw Amazon need Capacity Planning to effective use in processing and position itself well. Use of Amazon’s cloud systems is increasing each and every day, it is wise for Amazon to make full use of Scalability for current and future development in data and cloud infrastructure and at the same time saving cost for implementation as it is planned and monitored systematically. Participating Business entity be it sellers and buyers will also make use of this system as a way for them to reduce cost and TCO can assist in identifying areas that involved cost in order to be cost efficient. All the three components of these system has a vital role in the efficiency and effectiveness of using cloud computing CRM and useful to an organization like Amazon, the customers who subscribed to it and
3. What kinds of businesses are most likely to benefit from using cloud computing? Why?
This cloud computing technology has created a new trend for businesses nowadays, big or small and more and more business has adopted cloud computing technology in their business processes. Small start-ups companies to bigger and established ones like Zynga for their games platforms and servers. In term of cost cloud computing has a profound impact to small internet business as it is cheaper and cost effective where funds can be effectively allocated to other areas of work.
For big enterprises and business giants, cloud computing provide alternative to the issue of storage and data centers technical and housing woes. It is a matter of redesigning their system infrastructure to be compatible with the cloud computing technology for it will remain the main driver in term of virtual system infrastructure management.
