BUSINESS MANAGEMENT SUPPORT

BUSINESS MANAGEMENT SUPPORT

© 2010 BM-Support.org Foundation. All rights reserved.

E

XECUTIVE

S

UMMARY

Cloud computing is hot. But severe business risks and challenges are involved to retrieve the promised business advantages of cloud computing.

Conclusions:

 The main disadvantages are: security, loss of control, unstable cost structure , potentially decreased business flexibility, integration problems.

 An adaptive architecture, including a new business model must be developed to retrieve business value

 Organizational changes are needed for adapting the technology (procedures, skills, business model)

 Formulate and maintain an exit procedure to change from CSP (Cloud Service Provider).

O

UTLINE

This presentation is a brief summary of the research on cloud computing performed under supervision of the Business

Management Support Foundation.

The following questions will be answered:  What is cloud computing

 What are the main disadvantages and pitfalls using cloud computing

H

YPE

, F

AD OR INNOVATION

?

Cloud computing is rapidly gaining the interest of service providers, programmers and the public as no one wants to miss the new hype. So the real questions need to be answered:

 What is the real business value?  What’s the innovative part?

 What are keen pitfalls using cloud computing?  Is clustering the same as cloud computing?

 What happened with virtualization, grid computing, the automatic data center and autonomic computing?

A

GENDA

What is cloud computing

 Definition of cloud computing  Is cloud computing new?

 Manifestations of cloud computing  Cloud deployment models

 What should cloud computing be?

The main disadvantages and pitfalls using cloud computing  Security

 Dependency (loss of control)  Cost

 Decreased flexibility  Knowledge

 Integration

D

EFINITION OF

C

LOUD COMPUTING

The lack of an agreed single definition makes answering ‘what’ question hard.

The NIST definition of cloud computing is:

Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing

resources (e.g., networks, servers, storage, applications, and

services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.

I

S

C

LOUD COMPUTING NEW

?

Cloud computing is not a fundamentally new paradigm Cloud computing draws on existing technologies and approaches, such as:

 Utility Computing

 Software-as-a-Service  Distributed computing  Centralized data centers

What is new is that cloud computing combines and integrates these approaches.

Cloud computing can be seen as the logical evolution in outsourcing IT services. The promise is that with cloud computing every

M

ANIFESTATIONS OF CLOUD COMPUTING

 SaaS: Software as a Service  PaaS: Platform as a Service

 IaaS: Infrastructure as a Service

SaaS

• Implementations of specific business functions • E.g. Google Docs, Salesforce CRM, SAP Business

by Design

PaaS

• Provide computational resources through a platform (Operating Systems)

• Dedicated APIs

IaaS

• Resource Clouds (e.g. CPU’s, memory, storage, network)

C

LOUD

D

EPLOYMENT

M

ODELS

To make use of Cloud Computing companies can use services of a CSP

(Cloud Service Provider). But be aware of the different cloud service models that are offered:

 Private Cloud: Internal within a company data center or dedicated

leased;

 Public Cloud: Cloud services provided to many customers from a

single technology stack;

 Hybrid cloud: Offers a possibility to mix private and public cloud services; Deployment Models Private Cloud Public Cloud Hybrid cloud

With a public or hybrid cloud the CSP Uses resource pooling to serve multiple customers using physical and virtual resources that are dynamically

W

HAT SHOULD

C

LOUD COMPUTING BE

?

 Give you extra business value over a long period of time  Ensures that the quick changing business needs can be

supported better than using traditional IT services  Be a technology that enables business innovation Currently cloud computing involves:

 Virtualization

 Automatic Scalability (rapid elasticity)  On-demand deployment

 Internet delivery services  Open source software  Open standards

A

GENDA

What is cloud computing

 Definition of cloud computing  Is cloud computing new?

 Manifestations of cloud computing  Cloud deployment models

 What should cloud computing be?

The main disadvantages and pitfalls using cloud computing  Security

 Dependency (loss of control)  Cost

 Decreased flexibility  Knowledge

 Integration

D

ISADVANTAGES USING CLOUD COMPUTING

Disclaimer:

Cloud computing technologies and business models have not yet reached maturity.

So:

 All major CSP’s are still working on research and development to give customers the level of services and quality required for crucial business processes.

And:

 The processes needed within CSP’s and the IT technology used by CSP is growing towards a landscape of extreme complexity.

D

ISADVANTAGES

: S

ECURITY

 No control over the business assets (data!). The main assets in every company are its data files with valuable customer information.

 A proper security model for cloud computing is not yet

developed. Security, privacy and compliancy is still difficult for cloud solutions. Especially for public cloud services.

 Physical location of hardware and software is unknown. Site inspections and audits are hard.

 Availability. Constant connectivity is required.

 Failure to compliance. E.g. HIPAA, SOX, PCI, SAS 70 and audits.

D

ISADVANTAGES

: D

EPENDENCY

 Quality problems with CSP

 No influence on maintenance levels and fix frequency when using cloud services from a CSP.

 No or little insight in CSP contingency procedures. Especially backup, restore and disaster recovery.

 No easy migration to an other CSP.

 Measurement of resource usage and end user activities lies in the hands of the CSP

D

ISADVANTAGES

: C

OST AND

F

LEXIBILITY

 Special customization not possible.

 Possible lower rate of business IT innovation. The technological innovation pace is dictated by CSP. Cost:

 Hidden cost (e.g. compliancy regulations, backup, restore, disaster recovery and problem solving.)

 Opaque cost structure due to highly flexible usage of cloud services;

 Cost advantages is as hard to get when using outsourcing for IT services in a traditional way.

D

ISADVANTAGES

: K

NOWLEDGE AND

INTEGRATION

Knowledge:

 More and deeper knowledge is required for implementing and managing SLA contracts with CSP’s

 Since all knowledge about the working of the cloud (e.g. hardware, software, virtualization, deployment) is

concentrated at the CSP, it is hard to get grip on the CSP. Integration:

 Integration with equipment hosted in other data centres is difficult to achieve.

A

GENDA

What is cloud computing

 Definition of cloud computing  Is cloud computing new?

 Manifestations of cloud computing  Cloud deployment models

 What should cloud computing be?

The main disadvantages and pitfalls using cloud computing

 Security  Dependency  Cost  Decreased flexibility  Knowledge  Integration

N

EEDED ORGANIZATIONAL CHANGES

When using cloud computing the following changes are needed:  Adjustment on the main business model

 Adjustment on architecture and design for new and current systems

 Adjustment on architecture method used to maximize the advantages of the new technology

 New approach to implement new solutions using CSP services  Adjustment on maintenance model

 Adjustment on cost model

N

EW BUSINESS OPPORTUNITIES

?

Cloud computing can enable new business opportunities. New business models possible are e.g.:

 On demand IT  Self service IT  Pay-by-use

D

ON

’

T GO

?!

Cloud computing is about an automatic data center from a IT perspective. But business and IT are allied.

One of the major changes that comes with cloud computing is that there is a need to:

 Automate the processes around the various tools and

techniques used

So if you did not succeed the last 4 years with e.g.:

 SOA

 Building an automatic CMDB

 Automatic SCM (Software Configuration Management)

 Quality improvement for business and IT processes  Governance

 Security baselines

C

ONCLUSIONS

Cloud computing can give a significant business advantage! To make Cloud Computing successful :

 Understand the risks involved

 An adaptive architecture, including a new business model must be developed to retrieve new business value

 Organizational changes are needed for adapting the technology (procedures, skills, business model)

 Understand the technology used by your CSP (Cloud Service Provider)

A

DVISE

To make Cloud Computing successful :

 Stay compliance : SOX, HIPAA, ISO , NIST e.g.

 Be robust for network failures and network performance issues.

 Stay close to open source and open standard solutions when choosing a CSP (Cloud Service Provider)

 Work from within a defined architecture to retrieve the wanted results using cloud computing

 Be aware of the current lack of standards when using or implementing cloud computing.

 Since long-term experience is lacking with the use of cloud computing real business advantages in relation to

F

UTURE OR PRESENT

?

The cloud computing paradigm is not the future. The technology is already available for a number of years.

The future is about developing innovative business models that use the technological advantages that cloud computing

M

ORE INFORMATION

?

If you want more detailed information about other business research questions regarding cloud computing. E.g.:

 Advantages or disadvantages of different vendor Solutions  Open Source solutions available

 Open standards adaptation (e.g. Open Virtual Format- OVF)  Integration aspects (business and IT systems)

 Organizational changes needed

 Quality systems for cloud computing

I

T

’

S ALL ABOUT COLLABORATION

!

About Maikel Mardjan:

- Msc Business Studies, University of Groningen

- Master Business Management (MBM), TSM Business School - Msc Electrical Engineering, Delft University of Technology

W

HAT DOES THE FOUNDATION

?

BM-S

UPPORT

.

ORG AND YOUR INNOVATION

PROJECT

?

Success of innovation is applying the right mix of knowledge of diverse scientific worlds. The BM-Support foundation provides different services to make innovation projects successful.

Our strength lies in systematic analyzing and solving all

problems which arise during an innovation route. But we also bring together all companies needed to make your innovation project

C

ONTACT

I

NFORMATION

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